Project Details
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SFB 884:  Political Economy of Reforms

Subject Area Social and Behavioural Sciences
Humanities
Term from 2010 to 2021
Project identifier Deutsche Forschungsgemeinschaft (DFG) - Project number 139943784
 
Final Report Year 2022

Final Report Abstract

The SFB 884 was established to better understand why reforms often are not implemented although it is widely believed that they would benefit society. For example, experts regularly provide reminders of the need to address the worldwide challenges of inequality, climate change, aging population, (youth) unemployment etc., but reforms that address these issues were rarely carried out. One explanation is that reforms are no static, discrete events, but result from complex decision-making processes over time in an institutional environment that involves area-specific actors. Thus, to better understand reform processes, the SFB 884 applied a more fine-grained perspective that considers the dynamic nature of reform processes, the involvement of a multitude of actors within specific areas and different institutional environments. The research activities of the SFB 884 were divided into three project groups: Project group A focused on the micro-foundations of reforms and examined the formation of reform preferences and attitudes that determine the feasibility of reforms. Project group B studied the empirical evaluation of reforms in different area-specific environments and developed new econometric methods. Project group C studied the role of different types of actors by examining procedural characteristics of reform-making processes. These research groups were connected via a joint data center that hosted the German Internet Panel (GIP) which served – in addition to quantitative text analysis – as the main data generator for the research activities of the SFB 884 and allowed for experimental and causal analysis of reform processes. Research output of the SFB 884 includes theoretical and empirical analyses that help understand individual and collective decision-making on reforms as well as the development of methodological tools that help quantify and analyze complex reform processes. The SFB’s research findings confirm the initial claim that a more fine-grained analysis is necessary to understand reform processes. There are many factors that prevent reforms that would benefit society. However, if we better understand the necessary conditions and dynamics of these processes, it is more likely that reforms take place. For example, politicians are responsive to public opinion, and we found that public opinion varies significantly over time and areas, which affects reform feasibility. Perceptions of compliance with the rule of law, distributional and fairness concerns, or potential compensation of reform losers are major hurdles for reform feasibility. Furthermore, it is important to consider the whole chain of reform-making processes and their implementation. Depending on the area, there is a need for fine-tuning to guarantee that reforms have the intended effects. For example, while coalition governments need to compromise on reforms at the outset of coalition formation, the conditions for implementation can change over time, in particular when election day approaches. Methodologically, the SFB not only implemented the GIP as a new tool for data generation of reform processes, but it also developed quantitative text analysis, automated video analysis, digital trace data from social media platforms, online browsers, and smartphones to provide high-quality data which, together with novel econometric techniques, allows for a better measurement and understanding of reform processes.

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