Cycles of polarization and settlement: diffusion and transformation in the macroeconomic policy field

Abstract

Innovative theories and policy proposals originating in the economics profession have diffused globally over the past several decades, but these models and policy programs transform as they spread. Existing models of change based on the concept of “paradigm shifts” capture the transformation of the economics profession at a high level of abstraction, but analysis of more concrete policy changes and associated ideas requires developing theory at a lower level of abstraction. I propose a field theoretic model of change based on the concept of cycles of polarization and settlement. According to this model, settlements are characterized by multiple cross-cutting axes of competition and debate in a professional field. Moments of contention emerge when field entrepreneurs successfully build professional movements, resulting in polarization. However, contention is episodic and followed by the emergence of “centripetal forces” which lead a gradual return to the center. I develop this model by examining the case of monetary economics and policy in Latin America, a critical case for studies of the policy influence of economic ideas and experts.