Comparative Politics

The Institutional Sources of Economic Transformation: Energy Policy from the Oil Crises to Climate Change

Authors

Abstract

Why are some governments more effective in promoting economic change than others? We develop a theory of the institutional sources of economic transformation. Domestic institutions condition the ability of policymakers to impose costs on consumers and producers. We argue that institutions can enable transformation through two central mechanisms: insulation and compensation. The institutional sources of transformation vary across policy types—whether policies impose costs primarily on consumers (demand-side policies) or on producers (supply-side policies). Proportional electoral rules and strong welfare states facilitate demand-side policies, whereas autonomous bureaucracies and corporatist interest intermediation facilitate supply-side policies. We test our theory by leveraging the 1973 oil crisis, an exogenous shock that compelled policymakers to simultaneously pursue transformational change across OECD countries. Panel analysis, case studies, and discourse network analysis support our hypotheses. The findings offer important lessons for contemporary climate change policy and low-carbon transitions.

Content

Thumbnail image of Manuscript_Oil crises.pdf

Comments

Log in or register with APSA to comment
Comments are not moderated before they are posted, but they can be removed by the site moderators if they are found to be in contravention of our Commenting Policy [opens in a new tab] – please read this policy before you post. Comments should be used for scholarly discussion of the content in question. You can find more information about how to use the commenting feature here [opens in a new tab] .