Policy diffusion as empowerment: domestic agency and the institutional dynamics of monetary policy diffusion in China

Abstract

ABSTRACTThe policy diffusion literature has often focused on external pressures on domestic policy. However, by analysing the evolution of China’s monetary policy regime, we demonstrate a pattern of highly selective diffusion that is largely shaped by domestic political and institutional dynamics. We use an historical institutionalist approach to probe how the most relevant institutionally embedded agents, in this case, those within the Chinese central bank, have strategically engaged with this process. We show how selective diffusion has been shaped by epistemic policy learning through international engagement by China’s central bankers, and, in particular, how they have strategically used imported policy ideas as an institutional empowerment strategy, furthering the interests and agenda of the People’s Bank of China.