why adopting seemingly ineffective policies? :the case of maternity subsidy program

Why Adopting Seemingly Ineffective Policies?:The case of maternity subsidy program

HeungSuk, Choi , Professor. Korea University

Howon, Suk , Ph.D . Candidate , Korea University

Background

• The low fertility rate has been a national issue in Korea: The total fertility rates were 1.19 in Korea, 1.96 in the U.K, 1.99 in the France in 2008. In 2009, the fertility rate of South Korea was recorded 1.15, which was the world-lowest.

• Responding to such a low fertility rate, the Korean government has implemented vari-ous childbirth encouragement policies at the central and local level. One of the key program is the maternity subsidies(M.S.P) at the local government.

• With the M.S.P., local governments provide money to the households that give birth to a child.

• Each local government has a full discretion about whether to adopt the M.S.P. However, the M.S.P has been frequently criticized for its ineffectiveness. Nevertheless, an in-creasing number of Korean local governments have adopted M.S.P since 2001.

M.S.P adoption and Survival Ratio

2001 2002 2003 2004 2005 2006* 2007 2008 2009 2010* total

Adoption 5 8 2 8 32 25 43 29 30 14 196

percentage 2.55 4.08 1.02 4.081 16.32 12.75 21.93 14.79 15.30 7.14 100

cumulative 2.55 6.63 7.65 11.73 28.06 40.81 62.75 77.55 92.85 100 100

<Table 1> M.S.P Adoption Year and Percentage0.

000.

250.

500.

751.

00

0 2 4 6 8 10analysis time

Kaplan-Meier survival estimate

Research Question

• Despite pervasive skepticism of M.S.P effectiveness, why did increasing number of

local governments adopt M.S.P. ? – While more local government were adopting

M.S.P., the fertility rates in Korea were keeping on slipping. Moreover, interviews

with local government officials reveal that they themselves did not think M.S.P. was

effective by any means.

• Can government’s programs be adopted and diffused irrespective of their effec-

tiveness? If so, why? What are some factors and mechanisms working behind

such a phenomenon?

Theoretical basis: Unified theory

• The unified theory explains policy diffusion in terms of internal, as well as external determinants: the internal determinants are political, economic, and social char-acteristics of the local government unit, while the external factor represents the influence of nearby local government units (Walker,1969; Gray,1973; Berry&Berry,1990; NamGung,1994; Mintrom,1997; Lee,2004; etc.).

Theoretical basis: Sociological institutionalism

• Institutionalization is both a “phenomenological process by which certain social relation-

ships and actions come to be taken for granted’ and a state of affairs in which shared cog-

nitions define “what has meaning and what actions are possible (Zucker,1983:2).

• If the organizations are institutionalized, they can gain legitimacy in society and enhance

stability in environmental turbulence; organizations can be survived or at least take an ad-

vantageous position to survive (Meyer&Rowan,1977). Institutionalized products, service,

techniques, policies, and programs function as powerful myths and organizations adopt

them ceremonially (Meyer&Rowan,1977: 340).

Theoretical basis; Sociological institutionalism

• Institution theory presumes that the effect of environment is so strong, i.e. Iron cage. Un-der this circumstance it suggest that organizations have a tendency to mimic the most seemingly legitimate structure, so every organizations take similar form. Dimaggio&Powell (1983) called this phenomenon isomorphism, and Meyer & Rowan (1977) named it myth and ceremony.

• Isomorphism results from seeking legitimacy, not technical efficiency. (Dimaggio&Powell,1983; Meyer&Rowan,1977).

• For instance, Meyer and Rowan (1977), Meyer, Boil and Thomas (1994), Scott and Meyer (1994) argued that the reason why the structures such as bureaucracy have been widely diffused is not that they are the useful means to solve problems but that the environment encompassing the formal structure acknowledge them as valuable and legitimate.

Theoretical basis; Integrated Framework

• Unified theory seems likely to be the main stream of policy diffusion research. While it delineated the influential factors on policy adoption and diffusion, it cannot explain sufficiently why government organizations often show technically irrational behav-iors.

• Though Institutional theory gives good insight to articulate motivation of the policy diffusion, it doesn’t show other various dynamics which can effect on policy diffusion and moreover, empirical studies in this vein have some limitation to suggest the dy-namics of various factors which should be considered.

• An integrated theoretical framework which includes both theories is required to ex-plain the policy diffusion. This integrated theoretical framework seems likely to be useful to broaden the prospect in the field of policy diffusion research.

Theoretical basis

• To identify the influential factors on seemingly ineffective policy diffusion, three analysis models will be established. Model 1 is for testing policy adoption fac-tors; unified and institutional, and their relative power on policy adoption. (Event History Analysis)

• Model 2 is for identifying the relationship between the policy package and envi-ronmental, institutional pressures. (Logit, Multiple regression Analysis)

• Model 3 is for specifying the relationship between the adoption year and envi-ronmental, institutional pressures. (Multiple regression Analysis)

• Although three models are complementary, Model 2 and 3 are for explaining the

degree of effort for gaining legitimacy in more detail.

The Local Government Structure in Korea

Metropolitan Government (16) Local Government (230)

Metropolis (7) Gu (69)

Province (9) City (75) , Gun (86)

Model 1: Analysis Framework for Testing Policy Diffusion Factors; Hypothe-ses Type of variable Explanation

Dependent variable YM.S.P adoption

dichotomous variable (adoption: 1, otherwise : 0)

Independent variables

Political factors

Election Election year: dichotomous variable (previous or election year: 1 otherwise : 0)

conflict

Local government institutional conflict

dichotomous variable

(unified government : 1 otherwise : 0)

Institutional factors

Coercive

Coercive isomorphism

Apparatus: 1, otherwise : 0 (dichotomous variable)

Subsidy: 1, otherwise: 0 (dichotomous variable)

Uppermsp: 1, otherwise: 0 (dichotomous variable)

Mimetic

Mimetic isomorphism

Adoption Number of Nearby government

(previous year)

Environment pressures

Aged Aged population ratio (previous year)

Cbr Crude birth rate (previous year)

LocationThe type of government

Gu(1), City(2), Gun(3); dummy variable

Control variables Socio Economic factorsSrr self-reliance-ratio of local finance (previous year)

Population (previous year)

Model 1: Analysis Framework for Testing Policy Diffusion Factors; Hypotheses

1. Political Factors

1) Election Year 2) Local governments' institutional conflict

• Hypothesis 1-A: M.S.P is more likely to be adopted in an election or previous year of election

than two years between election.

• Hypothesis 1-B: M.S.P is more likely to be adopted under unified government than divided

government.

2. Institutional Factors

1) Coercive isomorphism(Hypothesis 2) 2) Mimetic isomorphism(Hypothesis 3)

• Hypothesis 2-A: M.S.P is more likely to be adopted, if upper-tier-government established ap-

paratus to address only low-fertility-rate problem.

• Hypothesis 2-B: M.S.P is more likely to be adopted, if upper-tier-government issues M.S.P

subsidy.

• Hypothesis 2-C: M.S.P is more likely to be adopted, if upper-tier-government adopts M.S.P pol-

icy.

• Hypothesis 3: The likelihood that a local government will adopt M.S.P is positively related to

the number of nearby governments that are newly adopted M.S.P in provincial jurisdiction.

• 3. environmental Pressures• Hypothesis 4: If the environmental pressure is high, the likelihood of adopting M.S.P in-

creases.

Model 2: Analysis Framework for Testing the Effort for Gaining Legitimacy ; Policy Package

• Local governments facing higher environmental pressures are likely to make policy pack-age more generous than other governments as they try to gain legitimacy by giving resi-dents the impression that they try to do something.

• M.S.P has been adopted by local governments under the technical uncertainty. Besides, each local government has discretion of making policy package. Under this circumstance, each local government adopted M.S.P is likely to make policy package in proportion to en-vironmental pressures to which they are faced.

• On the other hand, the policy package can be the function of institutional variable to take continuous support of upper-tier government and to gain legitimacy from them.

• Furthermore, if we assume that legitimacy comes as being compared with others, local governments are likely to make the policy package more generous as the number of nearby governments adopting M.S.P increase.

Model 2: Analysis Framework for Testing the Effort for Gaining Legitimacy ; Policy Package

Type of variable Explanation

Dependent variables Y

Policy Package:

1) The scope of recipients (recipients); Logit regression model

2) Cumulative payment from first child to third child. (payment); Multiple regression model



Coercive





Mimetic

Mimetic isomorphism


(previous year)






Control variables

Political factors

ElectionElection year: dichotomous variable

(previous or election year: 1 otherwise : 0)

Conflict

Local government institution conflict


(Unified government : 1 otherwise : 0)

Socio Economic factors

Srr Self-reliance-ratio of local finance (previous year)


Year Adoption year

Model 3:Testing the Effect of Coercive Isomorphism and Environmental Pressures on M.S.P Adoption Year

• Model 3 is for more explanation of the Coercive isomorphism, and environmental pressures on M.S.P. If the upper-tier-government issued subsidy to support M.S.P policy of lower-tier-governments, or implemented M.S.P policy in ones’ own name, it represent the extent of the upper-tier-governments’ effort to gain legitimacy from the regional constituents under technical uncertainty.

• In the view of Coercive isomorphism, the lower-tier-governments will adopt M.S.P to gain resources from upper-tier government, so the policy diffusion can be promoted. In the same vein, the concern of upper-tier-government on M.S.P can have an effect on policy adoption year of lower-tier-government to secure sustaining supports from upper-tier-gov-ernment.

• From this point of view, to identify the relationship between coercive isomorphism factors and policy adoption year can also suggest another aspect of Coercive isomorphism. On the other hand, the adoption year of M.S.P is likely to a function of environmental pressures. As the environmental pressures increase, there is a big need to cope with these pressures to gain legitimacy from the institutional environment, thus we can assume that the adop-tion year can be varied according to the degree of environmental pressures.

Model 3:Testing the Effect of Coercive Isomorphism and Environmental Pressures on M.S.P Adoption Year.

Type of variable Explanation

Dependent variable Y Adoption year



Coercive





Mimetic

Mimetic isomorphism


(previous year)






Control variables

Political factors

ElectionElection year: dichotomous variable

(previous or election year: 1 otherwise : 0)

Conflict

Local government institution conflict


(Unified government : 1 otherwise : 0)

Socio Economic factors

Srr Self-reliance-ratio of local finance (previous year)


Model 2,3: Hypotheses

Model 2: Analysis Framework for Testing the Effort for Gaining Legitimacy

from the Environmental Pressures.

Hypothesis 5-A: The more the environmental pressures increase, the more M.S.P

policy package is generous.

Hypothesis 5-B: Institutional factors are closely related to the generosity of M.S.P

policy package.

Model 3: Analysis Framework for Testing the Effect of Coercive Isomorphism and Environmen-tal Pressures on M.S.P Adoption Year.

Hypothesis 6-A: The adoption year of M.S.P of lower-tier-governments is likely to be

earlier, if upper-tier-governments established apparatus, or issued M.S.P sub-

sidy, or implemented their own M.S.P

Hypothesis 6-B: The adoption year of M.S.P is likely to be earlier, if the environmen-

tal pressures are stronger.

Data and Method

• The data on M.S.P adoption, the scope of recipients, amount of M.S.P money, and subsidies were collected by requesting information to each 230 local government from 2001 (the first adoption year) to 2010. The election and conflict data to build political factors were drawn from The Republic of Korea National Commission (NEC) and each local government assembly homepage. Apparatus, environmental pressures, and socioeconomic capacity data were collected from Korean Statistical information Service (KOSIS) and each local government homepage. Concerning fertility rate which are constructing a part of environ-ment pressures, total fertility rate has been generally used to measure the degree of fertil-ity. However the data on total fertility rate does not exist at local level; this data has been announced since 2005 at local level. For this reason, this study used crude birth rate in-stead of total fertility rate. Fortunately, these two indexes (total fertility rate, crude birth

rate) are showing similar fluctuation. • The analysis period is 10 years (2001-2010), the number of local government to analyze is

230, and total observation cases are 1651.

Data and Method

• To test each hypothesis, three analysis methods will be suggested; event history analysis, logit regression, and multiple regression analysis. The method utilized is contingent on the hypothesis to be tested. To test hypothesis 1, 2, 3 and 4 event history analysis will be em-ployed. The advantage of using event history analysis is that it takes into account of both the occurrence and timing of event while estimating the effects of exogenous factors (Ya-maguchi, 1991; Ko,2004). This model can analyze the independent variables' effects on dependent variables’ probability change under the assumption that the observed unit ex-periences only one event, so we can test the impact of each independent variable on the M.S.P adoption probability of each local government.

• On the other hand, multiple regression analysis (payment, adoption year) and logit regres-sion analysis (recipients) will be employed to test hypothesis 5, 6. Multiple (logit) regres-sion is used to analyze the net effect of each variable on the condition that other explana-tory variables are fixed

Testing Result

Model 1 Model 2-1: recipientsModel 2-2:

Payment

Model 3

Adoption year

Variables Coef Haz. Ratio Coef. Odds Ratio Coef Coef

Election 1.7624132 5.826481 -.41473218 .6605172 9.009696 _

conflict1 .05585296 1.057442 -.27541627 .759256 49.719111 _

apparatus -.26233757 .7692513 .86702323 2.37981 -40.660816 1.7587626***

Subsidy 2.3891335*** 10.90404 -.10436794 .9008938 -21.397766 -2.909337***

uppermsp .29861886 1.347996 .46871493 1.597939 49.481376** .113311

Mimetic .18213745*** 1.199779 .17866223* 1.195617* -1.2427796 .03365666

Aged -.02473094 .9755724 .13006106 1.138898 8.8711438** .04763988

Cbr -.08784725 .9159008 -.1224921 .8847129 -6.7519117 .00850506

Location

2 .41685342* 1.51718 -1.014926 .3624293 -11.48663 -.90544581**

3 .44832678 1.56569 -.1019478 .9030767 -60.82359 -1.2725766**

Srr .00789903 1.00793 .0134047 1.013495 1.8746477** -.00331141

Pop -2.959e-07 .9999997 -2.32e-06* .9999977* -.00007063 1.024e-06

Year - - -.6042736*** .5464712*** -.81176993 -

Cons _ _ 1213.8687*** _ 1672.5978 2006.5041***

Testing Hypotheses (1,2,3)

1. Political Factors

1) Election Year 2) Local governments' institutional conflict

• Hypothesis 1-A: M.S.P is more likely to be adopted in an election or previous year of election

than two years between election. Statistically insignificant

• Hypothesis 1-B: M.S.P is more likely to be adopted under unified government than divided

government. Statistically insignificant

2. Institutional Factors

1) Coercive isomorphism(Hypothesis 2) 2) Mimetic isomorphism(Hypothesis 3)

• Hypothesis 2-A: M.S.P is more likely to be adopted, if upper-tier-government established ap-

paratus to address only low-fertility-rate problem. Statistically insignificant

• Hypothesis 2-B: M.S.P is more likely to be adopted,

if upper-tier-government issues M.S.P subsidy. Accept

• Hypothesis 2-C: M.S.P is more likely to be adopted,

if upper-tier-government adopts M.S.P policy. Statistically insignificant

• Hypothesis 3: The likelihood that a local government will adopt M.S.P is positively related to

the number of nearby governments that are newly adopted M.S.P in provincial jurisdiction.

Accept

Testing Hypotheses (4,5,6)

3. environmental Pressures Hypothesis 4: If the environmental pressure is high, the likelihood of adopting M.S.P in-

creases. City gov is more likely to adopt M.S.P than Gu gov; Partly accept

Model 2: Analysis Framework for Testing the Effort for Gaining Legitimacy from the Environmental Pressures.

Hypothesis 5-A: The more the environmental pressures increase, the more M.S.P policy package is generous. Aged, *(Year); Partly accept

Hypothesis 5-B: Institutional factors are closely related to the generosity of M.S.P policy package. Uppermsp, mimetic; Partly accept

Model 3: Analysis Framework for Testing the Effect of Coercive Isomorphism and Environmental Pres-sures on M.S.P Adoption Year.

Hypothesis 6-A: The adoption year of M.S.P of lower-tier-governments is likely to be ear-lier, if upper-tier-governments established apparatus, or issued M.S.P subsidy, or im-plemented their own M.S.P. subsidy ; Partly accept

Hypothesis 6-B: The adoption year of M.S.P is likely to be earlier, if the environmental pressures are stronger. City, Gun government; Partly accept

Conclusion

• According to the test results, political factors are not associated with policy adoption prob-ability but M.S.P subsidy of upper-tier-government (coercive isomorphism), the number of nearby government adopting M.S.P (mimetic isomorphism) and location (environmental pressure) are positively related to the M.S.P adoption.

• The test results suggest, though not all factors, that the policy package tends to be more generous, when the environmental (aged), and the institutional (uppermsp) pressures are stronger; moreover, the adoption year of M.S.P also tends to be earlier in proportion to en-vironmental pressures (location), and in case of existence of upper-tier-government’s M.S.P subsidies.

• Conclusively, M.S.P has been widely diffused irrespective of its untested effectiveness on enhancing fertility rate. The technical uncertainty and environmental pressures forced lo-cal governments to adopt M.S.P. Behind this phenomenon, coercive isomorphism, mimetic behavior of local governments and motivation for gaining legitimacy facilitate M.S.P adop-tion and diffusion.

Implication

• This study focused on the political, institutional, and environmental factors to identify the behind story on why adopting seemingly ineffective policy.

• In the real world, policies are not always adopted due to their effectiveness (ex-pected effectiveness) on social problems as normatively suggested.

• On the contrary, the policy adoption can be the function of political motivation or le-gitimacy under the technical uncertainty. In most cases, policy makers have to adopt certain policies under numerous constraints such as restricted time, information, po-litical, environmental pressures, and technical uncertainty, which says that policy adoption does not always depend on the effectiveness (expected effectiveness) of such policies. Political motivation or intention to gain legitimacy from institutional circumstance or to evade environmental pressures can be much more plausible rea-sons that are able to explain adopting certain policies. To understand the dynamics encompassing policy adoption more precisely, these factors behind the policy adop-tion need considering.

Thank you!

M.S.P

• The maternity subsidy program (M.S.P) means that the local gov-ernments give money for one time to the households which give birth to a child to influence the fertility rate directly since 2001.

• Each local government has full discretion about whether to adopt the M.S.P in its jurisdiction, and also the amount of payment and the scope of recipients (i.e. some local governments give the money from first child, some from the second child, and the others from the third child) are quite different according to the local gov-ernments.

• In 2010, 196 local governments adopted M.S.P among 230 local governments.

why adopting seemingly ineffective policies? :the case of maternity subsidy program

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