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We explore the impact of institutional design on the distribution of changes in outputs of governmental processes in the United States, Belgium, and Denmark. Using comprehensive indicators of governmental actions over several decades, we show that in each country the level of institutional friction increases as we look at processes further along the policy cycle. Assessing multiple policymaking institutions in each country allows us to control for the nature of the policy inputs, as all the institutions we consider cover the full range of social and political issues in the country. We find that all distributions exhibit high kurtosis values, significantly higher than the Normal distribution which would be expected if changes in government attention and activities were proportionate to changes in social inputs. Further, in each country, those institutions that impose higher decision-making costs show progressively higher kurtosis values. The results suggest general patterns that we hypothesize to be related to boundedly rational behavior in a complex social environment.

P olitical institutions translate inputs-in the form of changed preferences, new participants, newinformation, or sudden attention to previously available information-into policy outputs. In the process they impose costs on this translation, and these costs increase institutional friction. We argue that the "friction" in political institutions leads not to consistent "gridlock" but to long periods of stasis interspersed with dramatic policy punctuations. As political institutions add costs to the translation of inputs into outputs, institutional friction will increase, and outputs from the process will become increasingly punctuated overall. We use a stochastic process approach to compare the extent of punctuations among 15 data sets that assess change in U.S. government budgets, in a variety of aspects of the public policy process, in election results, and in stock market returns in the United States. We find that all of these distributions display positive kurtosis-tall central peaks (representing considerable stability) and heavy tails (reflecting the punctuations, both positive and negative). When we order institutions according to the costs they impose on collective action, those with higher decision and transaction costs generate more positive kurtosis. Direct parameter estimates indicate that all distributions except budget data were best fit by the double-exponential probability distribution; budgets are Paretian.

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Political dynamics are likely to proceed according to more general laws of human dynamics and information processing, but the specifics have yet to be outlined. Here we begin this task by examining public budgeting in comparative perspective. Budgets quantify collective political decisions made in response to incoming information, the preferences of decision-makers, and the institutions that structure how decisions are made. Most models to date stress preferences (organized by political parties) almost exclusively. We suggest a quite different approach.We begin by noting that input distributions for complex information-processing systems are Gaussian, providing a standard for comparing outputs against inputs. Next we examine public budget change distributions from a variety of countries and levels of government, finding that they are invariably distributed as double Paretians-two-tailed power functions. We find systematic differences in exponents for budgetary increases versus decreases (the latter are more punctuated) in most systems, and for levels of government (local governments are less punctuated).Finally, we show that differences among countries in the coefficients of the general budget law are probably explained by differences in the formal institutional structures of the countries. That is, while the general form of the law is dictated by the fundamental operations of human and organizational information processing, differences in the magnitudes of the law's basic parameters are country and institution-specific. 2 A General Empirical Law of Public Budgets 1Political systems, like many social systems, are characterized by considerable friction.Standard operating procedures in organizations, cultural norms, and all sorts of facets of human cognitive architectures act to provide stability of behavior in a complex world. In politics, ideology and group identifications provide stable guides to behavior in complex circumstances. In politics, however, a second source of friction exists: institutional rules that constrain policy action. In the United States, policies can be enacted only when both houses of congress and the president reach agreement on a measure. In parliamentary democracies, action may be constrained by the necessity to put together multi-party governing coalitions.Institutional rules 'congeal' preferences (Riker 1980), making it difficult for new policies to enter the political arena.In the past, scholars characterized these systems using comparative statics, a method of analysis that concentrated on equilibrium processes based on the preferences of decisionmakers. (Shepsle and Weingast 1987, Krehbiel 1998). Change was admitted primarily though the replacement of governing parties through elections, which established a new preference-based equilibrium to which the policymaking system quickly adjusted. But comparative statics ignores the on-going information-processing needs of an adaptive system, and political systems are clearly adaptive systems. They dynamically respond to incoming i...

In this introduction to the Policy Study Journal's special issue on punctuated equilibrium, we provide an overview of the approach, how it evolved, some of the major critiques directed at it, and some of the major developments it has spawned. We argue that the most important aspect of a theory or framework is not whether it is right or wrong, but the extent to which it is fruitful; that is, the extent to which it stimulated further research. Finally, we review the articles in this issue and put them in context.

▪ Abstract  Findings from behavioral organization theory, behavioral decision theory, survey research, and experimental economics leave no doubt about the failure of rational choice as a descriptive model of human behavior. But this does not mean that people and their politics are irrational. Bounded rationality asserts that decision makers are intendedly rational; that is, they are goal-oriented and adaptive, but because of human cognitive and emotional architecture, they sometimes fail, occasionally in important decisions. Limits on rational adaptation are of two types: procedural limits, which limit how we go about making decisions, and substantive limits, which affect particular choices directly. Rational analysis in institutional contexts can serve as a standard for adaptive, goal-oriented human behavior. In relatively fixed task environments, such as asset markets or elections, we should be able to divide behavior into adaptive, goal-oriented behavior (that is, rational action) and behavior that is a consequence of processing limits, and we should then be able to measure the deviation. The extent of deviation is an empirical issue. These classes are mutually exclusive and exhaustive, and they may be examined empirically in situations in which actors make repeated similar choices.