The Diffusion of Policy Innovations. An Experimental Investigation
University of St. Gallen Department of Economics Discussion Paper No. 2003-14
29 Pages Posted: 5 Aug 2003
Date Written: May 2003
What causes a government to adopt a new program or policy? Despite a large number of empirical studies available to date, the relative importance of various determinants remains obscure because of difficulties of statistical identification. We present an experimental setting to study the diffusion of policy innovations in the laboratory. Our approach discriminates between experimentation, experience, and emulation as determinants of policy adoption. The policy innovation we study is an internalization tax to mitigate a local market externality. Our results demonstrate the importance of information about innovations in other states in the diffusion of policy innovations.
Keywords: Policy emulation, policy experimentation, innovation
JEL Classification: C9, D7, H7
Suggested Citation: Suggested Citation