Policy Experiments Research Articles

Investigating climate adaptation in semi-arid pastoral social-ecological system: A case in Hulun Buir, China

Covering 15% of the Earth's land surface and home to 14% of the global population, semi-arid pastoral regions are characterized by high climatic variability and ecological vulnerability. Inner Mongolia, especially, is one of the regions that are most affected by climate change. In this study, we develop an integrated GIS and agent-based model of semi-arid pastoral social-ecological system (SAPSES) to simulate system responses to various policy and climate situations, using the traditional pastoral areas in Inner Mongolia, China, as a demonstration. Three herdsmen's adaptation strategy experiments and three adaptation policy experiments are designed, each of which is stress-tested under three climate scenarios SSP1-2.6, SSP2-4.5 and SSP3-7.0 to simulate the policy-climate interactive effects on SAPSES. The results show that, under SSP1-2.6 scenario, it is more conducive to sustainable livelihood of pastoral households, improving economic benefits and reducing ecological risks. While under SSP2-4.5 and SSP3-7.0 scenarios, purchasing forage is not an effective way for herdsmen to adapt to climate disasters, which causes grassland degradation, increase ecological risk and reduce economic benefits of SAPSES. For assessing the adaptation policies, herdsman suffers the severest ecological loss and the highest bankruptcy rate under policy experiment a. Privatization, undergoes the medium ecological loss and medium bankruptcy rate under policy experiment b. Privatization with carrying capacity control and subsidy, and experiences the smallest loss and the lowest bankruptcy rate under policy experiment c. Common property management with carrying capacity control and subsidy. The results help inform more robust policy for building climate resilience in semi-arid grassland regions.

Disentangling potential causal effects of educational duration on well-being, and mental and physical health outcomes.

Extensive research has focused on the potential benefits of education on various mental and physical health outcomes. However, whether the associations reflect a causal effect is harder to establish. To examine associations between educational duration and specific aspects of well-being, anxiety and mood disorders, and cardiovascular health in a sample of European Ancestry UK Biobank participants born in England and Wales, we apply four different causal inference methods (a natural policy experiment leveraging the minimum school-leaving age, a sibling-control design, Mendelian randomization [MR], and within-family MR), and assess if the methods converge on the same conclusion. A comparison of results across the four methods reveals that associations between educational duration and these outcomes appears predominantly to be the result of confounding or bias rather than a true causal effect of education on well-being and health outcomes. Although we do consistently find no associations between educational duration and happiness, family satisfaction, work satisfaction, meaning in life, anxiety, and bipolar disorder, we do not find consistent significant associations across all methods for the other phenotypes (health satisfaction, depression, financial satisfaction, friendship satisfaction, neuroticism, and cardiovascular outcomes). We discuss inconsistencies in results across methods considering their respective limitations and biases, and additionally discuss the generalizability of our findings in light of the sample and phenotype limitations. Overall, this study strengthens the idea that triangulation across different methods is necessary to enhance our understanding of the causal consequences of educational duration.

State of the European Union’s early notification obligation for drug shortages: enforcement and compliance in eight European countries (2020–2022)

BackgroundEarly notification of impending drug shortages is essential for mitigating or preventing shortages. Since 2019 pharmaceutical companies in the European Union (EU) and European Economic Area (EEA) must notify authorities of drug shortages at least two months in advance. This study’s aim was to investigate how advance notification of pharmaceutical shortages is functioning in EU/EEA countries and factors possibly associated with differences in notification times.MethodsThis was a retrospective register study using data from publicly available drug shortage registers of all national authorities in the EU/EEA area having such a register. Actual notification times for all drug shortages during January 2020–November 2022 were calculated and included in the descriptive quantitative analysis.ResultsData from eight countries (Belgium, Croatia, Finland, Germany, Norway, Slovakia, Slovenia, and Sweden) were available (18,987 notifications in total). Only 5.2% of all shortage notifications were made at least 60 days in advance and 56.2% of all notifications were made on the shortage’s starting day or even later. Data on production-related shortages were available in Belgium, Croatia, Germany, and Norway (n = 2097 showing that 3.9% of those shortages were notified at least 60 days in advance, but 74.3% were made on the starting day or even later. The longest advance notification times for drug shortages were found in Finland during a 12-month period in June 2021–May 2022 when progressive notification fees were in effect. During this national policy experiment, 20.0% of the shortages (n = 1754) were notified at least 60 days in advance, while 24.9% of the notifications occurred on the starting day or even later. Data on notification times for permanent market withdrawals of drugs were available in three countries (Belgium, Slovenia, and Slovakia, n = 1737): 21.2% of these notifications were made at least 60 days in advance, while 45.5% of the notifications occurred on the starting day or even later.ConclusionsThe EU regulatory requirement adopted in 2019 for early notification of drug shortages was unsuccessful in the eight countries having openly available statistics for follow-up. The national policy experiment in Finland with a progressive notification fee seemed to increase compliance with early notification.

Bringing Order to the Literacy Development of Black Boys in the Elementary Grades

AbstractDiscussions and practices focused on Black boys' literacy development and equity in U.S. classrooms require serious thought and interrogation if the aim is to move these boys toward advanced levels of reading, writing, intellectual development, and human development. Sorely, Black boys have become subjects of educational, programming, and policy experimentation endorsed by school boards that lead to instructional and curricular shortcomings in elementary classrooms. In this article, I call for a need to bring order to the literacy development of Black boys in the elementary grades by focusing on advanced literacy outcomes and the intellectual tradition. Order is needed to counter the random nature of literacy development that results in chaos and disorder as evidenced by reading outcomes and many Black boys, both high‐academically performing and low‐academically performing, being underserved in U.S. classrooms.

City street experiments and system change: Identifying barriers and enablers to the transformative process

City street experiments continue to be employed as a tool to improve urban mobility and liveability. Despite growing popularity, understanding of this transformative process, and more specifically, the barriers and enablers that exist for street experiments aiming to cause system change, remains an important knowledge gap. By way of a systematic search and review of 17 empirical studies, barriers and enablers to the transformative process are identified. Enablers include embedding experiments in long-term policies including stakeholders, active promotion and institutional support. Barriers include those within the experiment’s control (a lack of required resources, unconducive design, lack of clear vision and low frequency) as well as those out of the experiment’s control (opposition from stakeholders and institutional regulations and processes). The relationships between these enablers and barriers are recounted, revealing concrete recommendations for experiment organizers as well as two dilemmas for consideration.

Moved to Poverty? A Legacy of the Apartheid Experiment in South Africa

During the South African apartheid, Black people were forced to move to homelands during the 1960s and 1970s, resulting in one of history’s largest segregation policy experiments. We examine how and why relocation to the homelands affected human capital attainment. Exploiting the staggered timing of homeland establishment in a cross-cohort identification strategy, we find that moving to the home-lands during childhood significantly reduces educational attainment, labor earnings, and employment rates in adulthood. The data suggest an important role for place effects. Moving to the homelands in childhood implies greater exposure to poorer neighborhoods, and it disproportionally reduces human capital attainment. (JEL I26, J15, J24, J31, N37, O15, R23)

Evaluating transformative innovation policy in a formative way: Insights from Vinnova’s food mission experiment

Abstract This article presents the insights from an evaluation of a transformative policy experiment, in the food domain, conducted at the Swedish Agency of Innovation (Vinnova). To be consistent with the principles and objectives of these policies, it was necessary to implement a formative evaluation approach developed in the Transformative Innovation Policy Consortium (TIPC), that is supportive of experimental policies designed for highly complex and uncertain environments. The article presents the main characteristics of this approach and its differences and similarities with other proposals to assess transformative innovation policies. Next, the article describes how the evaluation was conducted in Vinnova during a 2-year engagement. Subsequently, the main insights gleaned from the process are highlighted in terms of (1) understanding the expectations of actors; (2) what has been learned by doing, from a technical and organizational point of view; and (3) the constraints that emerged during the engagement. It is then argued that the TIPC- formative evaluation approach challenges the role of evaluators, stretching them, and requires different attitudes from those that are common in evaluation practice.

Child Abuse Prevention in a Pandemic—A Natural Experiment in Social Welfare Policy

Child Abuse Prevention in a Pandemic—A Natural Experiment in Social Welfare Policy

How does the environmental performance assessment promote pollution reduction: An analysis of the first obligatory pollution reduction target plan in China

Environmental performance assessment (EPA) is vital in environmental governance and green development. Based on the policy experiment of the Action Plan for the Prevention and Control of Air Pollution in China, this paper analyzes the impact of EPA in reducing pollution using the difference-in-differences (DID) model and data from 108 cities in the Yangtze River Economic Belt (YREB) (2008–2020). The study finds that EPA significantly reduced PM2.5 emissions, which means that the implementation of EPA is conducive to improving the effectiveness of pollution reduction. After parallel trend tests and robustness tests by three methods, the results are still stable. The mechanism analysis finds that enhancing local government competition will weaken the pollution reduction effect of EPA. The heterogeneity analysis shows that compared to the upper and middle reaches of the YREB, EPA significantly reduces downstream pollution. In the context of global sustainable development, this study attempts to provide policy references for developing countries to formulate environmental policies and local governments to optimize environmental performance evaluation.

Electronic gaming machine accessibility and gambling problems: A natural policy experiment.

Electronic gaming machines (EGMs) are one of the most harmful forms of gambling at an individual level. It is unclear whether restriction of EGM functions and accessibility results in meaningful reductions in population-level gambling harm. A natural policy experiment using a large (N = 15,000) national dataset weighted to standard population variables was employed to compare estimates of gambling problems between Australian residents in Western Australia (WA), where EGMs are restricted to one venue and have different structural features, to residents in other Australian jurisdictions where EGMs are widely accessible in casinos, hotels and clubs. Accessibility of other gambling forms is similar across jurisdictions. Gambling participation was higher in WA, but EGM participation was approximately half that of the rest of Australia. Aggregate gambling problems and harm were about one-third lower in WA, and self-reported attribution of harm from EGMs by gamblers and affected others was 2.7× and 4× lower, respectively. Mediation analyses found that less frequent EGM use in WA accounted for the vast majority of the discrepancy in gambling problems (indirect path = -0.055, 95% CI -0.071; -0.038). Moderation analyses found that EGMs are the form most strongly associated with problems, and the strength of this relationship did not differ significantly across jurisdictions. Lower harm from gambling in WA is attributable to restricted accessibility of EGMs, rather than different structural features. There appears to be little transfer of problems to other gambling forms. These results suggest that restricting the accessibility of EGMs substantially reduces gambling harm.

New sustainable product adoption: The role of economic and social factors

Sustainability has become a global issue of widespread concern and renewable energy sources are among the most important areas of sustainability research. The solar photovoltaic panel, as a new product, has shown promise but is far from reaching its market potential. This is partly because installation of solar panels requires substantial upfront investment, a critical factor especially for households who want to install them on their rooftops. We use a micro modeling approach to study the adoption of rooftop solar panels among households. We model household adoption as a forward-looking investment in a new sustainable product. Since rooftop solar panels are easily observable in the neighborhood, they enable potential adopters to infer about the investment return of new installations without explicitly asking anyone. We build this social learning mechanism in our model and estimate it using a rich household-level data set on the adoption timings of the solar panels in Germany. Besides, an aggregate version of our micromodel has been proposed to estimate the parameters of adoption using aggregate data. We have contrasted the results of the two models. Through a series of counterfactual policy experiments, we demonstrate the effectiveness of different incentive policies including Feed-In Tariff (FIT). Through policy experiments we show that by understanding the underlying adoption mechanisms policy makers can choose the most efficient incentive policy to accelerate the adoption of solar panels. Our proposed models (micromodel and aggregate model) are general enough to be adapted to other new sustainable products by incorporating economic and social factors.

Policy Experimentation as Communication with the Public: Social Policy, Shared Responsibility and Regime Support in China

AbstractResearch on policy experimentation has mainly focused on central–local relations; scholars have paid little attention to the interaction between policy experimentation and the public. We argue that policy experimentation can be used by decision makers as an instrument to communicate with the public, facilitating the building of a social consensus regarding controversial policies. We evaluate the effects of the Chinese government's policy experimentation efforts to promote shared responsibility between the state and individuals for the urban pension system on the public's regime support. Evidence from two rounds of a nationwide survey conducted before and after the policy experiment indicates that the policy experimentation has significantly contributed to citizens’ acceptance of their individual welfare responsibility. Moreover, the image-building of governmental responsibility via official news, with varied intensity across regions, consolidates the political trust of residents while posing a challenge to local government credibility in the long run.

Policy experimentation with repeated elections

When is an incumbent incentivized to experiment with risky reform policy in the presence of future elections? We study a dynamic game between two political parties with heterogeneous preferences and a voter. The voter elects a party that then chooses a policy from a status quo and two risky reform policies. Under infrequent elections, the incumbent party experiments with its preferred reform policy even if its outlook is not promising. In contrast, with overly frequent elections, the incumbent prematurely stops experimentation because an imminent election increases the danger of losing power. While infrequent elections are suboptimal, inefficiency from overly frequent elections is severe enough that voter is worse than under a dictatorship. We also show that the voter's ‘incumbent advantage’ behavior could lead to an efficient outcome in the frequent elections limit. Our results suggest that leaders engage in risky reform when the surrounding political environment allows them to fail.

Poor Substitutes? Counterfactual Methods in IO and Trade Compared

Abstract Constant elasticity of substitution (CES) demand for monopolistically competitive firm-varieties is a standard tool for models in international trade and macroeconomics. Inter-variety substitution in this model follows a simple share proportionality rule. In contrast, the standard toolkit in industrial organization (IO) estimates a demand system in which cross-elasticities depend on similarity in observable attributes. The gain in realism from the IO approach comes at the expense of requiring richer data and greater computational challenges. This paper uses the data generating process of Berry, Levinsohn and Pakes (1995), BLP, who established the modern IO method, to simulate counterfactual trade policy experiments. We use the CES model as an approximation of the more complex underlying demand system and market structure. Although the CES model omits key elements of the data generating process, the errors are offsetting, allowing it to fit BLP-based predictions closely. For aggregate outcomes, it turns out that incorporating non-unitary pass-through matters more than fixing over-simplified substitution patterns.

Corporate sustainability policies and corporate investment efficiency: Evidence from the quasi-natural experiment in China

This paper studies the impact of green disclosure on firm investment efficiency, leveraging a policy experiment in China. Since 2012, the Chinese government has begun to implement the Ambient Air Quality Standards (AQS), which have strengthened the requirements for green disclosure throughout the country. We exploit the rollout of the AQS and find that tightening the green disclosure requirements significantly increases corporate investment efficiency. This increase is primarily driven by a reduction in underinvestment among non-state-owned firms and firms with low institutional ownership. Further analysis suggests that the alleviation of agency problems and the reduction of financial constraints are the two main mechanisms through which green disclosure influences firm investment efficiency. Our findings provide valuable policy implications, indicating that strengthening green disclosure standards can have a substantial positive impact on firm investment outcomes.

Universal Basic Income: The Foreseeable Future of Social Welfare Systems in the Post-Pandemic Era

The unconditional and regular payment of a certain amount of cash income to the entire population is a claim to universal basic income and a system that is distinct from the existing social welfare systems. Policy experiments on universal basic income have been going on since the end of the 20th century and have been seen by some scholars as a solution to major social problems such as technological development, economic downturn, and poverty. Especially under the impact of the 2020 pandemic, the world's development is once again hampered, and how to better solve the problems of low-income people is an important issue to be addressed by the social welfare system. It is worth noting that the policies introduced by governments under the pandemic have some degree of universal basic income characteristics. This article will analyze the merits and importance of universal basic income in the context of the welfare policies introduced by governments under the pandemic. Considering the economic difficulties in the post-pandemic era, it is worthwhile for countries to explore universal basic income as a basis for new social welfare systems, despite the potential difficulties in implementation.

The effect of untargeted naloxone distribution on opioid overdose outcomes.

Opioid overdose has claimed the lives of over 340,000 Americans in the last decade. Over that same period, policymakers have taken steps to increase the availability of naloxone-an opioid antagonist used to rescue overdose victims-to people in the community. Previous studies, most of which have examined the effects of state laws designed to facilitate access to naloxone, have reached mixed conclusions about the effects of naloxone access on fatal and non-fatal overdoses. This paper exploits a unique policy experiment provided by two naloxone giveaways intended to increase naloxone possession among the general public in Pennsylvania to estimate the causal impact of naloxone distribution on fatal overdoses and opioid-related emergency department (ED) visits. Using a difference-in-differences design, I find evidence that opioid overdose deaths fell immediately following the first giveaway but increased following the second giveaway and discuss these apparently contradictory findings in the context of the changing composition of the opioid supply. I also find some evidence of a decline in opioid overdose-related ED visits following the giveaways. This study is the first to examine the effects of untargeted naloxone distribution and has implications for other novel, naloxone distribution efforts currently underway.

Does the liberalization of stock market optimize firm's debt? Evidence from a policy experiment in China

This paper studies the impact of capital market opening on firm's financing in a typical developing market, China. We introduce the policy shock of China-Hong Kong Stock Connects to examine the mismatching between firms’ debt and investment. Our results show that the opening of capital market significantly reduces the mismatch between firms’ debt and investment. One possible mechanism is that the increase of information transparency with the China-Hong Kong Stock connects, which is confirmed by the moderating role of analyst coverage on the main effect. These findings enrich our understanding on the economic consequences of the stock market liberalization.

Exchange rate and inflation under weak monetary policy: Turkey verifies theory

SUMMARY For the academic audience, this paper presents the outcome of a well-identified, large change in the monetary policy rule from the lens of a standard New Keynesian model and asks whether the model properly captures the effects. For policymakers, it presents a cautionary tale of the dismal effects of ignoring basic macroeconomics. In doing so, it also clarifies how neo-Fisherian disinflation may work or fail, in theory and in practice. The Turkish monetary policy experiment of the past decade, stemming from a belief of the government that higher interest rates cause higher inflation, provides an unfortunately clean exogenous variance in the policy rule. The mandate to keep rates low, and the frequent policymaker turnover orchestrated by the government to enforce this, led to the Taylor principle not being satisfied and eventually a negative coefficient on inflation in the policy rule. In such an environment, was the exchange rate still a random walk? Was inflation anchored? Does the “standard model” suffice to explain the broad contours of macroeconomic outcomes in an emerging economy with large identifying variance in the policy rule? There are no surprises for students of open-economy macroeconomics; the answers are no, no and yes.

Policy transfer and policy experimentation in China: the case of state-sponsored student loans

ABSTRACT As part of efforts to mass higher education, China introduced state-sponsored student loans around the turn of the century, a progressive social policy reflecting the country’s move toward increased marketization and decentralization in delivering educational services. The loan scheme, open to low-income students, is a voluntary policy transfer that draws on lessons from abroad. Unexpectedly, it stalled soon after implementation. Subsequent local experimentation brought it back on track. This article uses the Dolowitz and Marsh policy transfer framework to identify and explain the unsuccessful transfer. It also uses Heilmann’s model to examine the local experimentation that brought about institutional change nationwide. The article argues that policy transfer, in conjunction with policy experimentation, provides practical frameworks for capturing the subtleties of China’s hierarchical governance and the different complications experienced throughout the policy process. The article thus contributes to the integration of policy transfer and experimentation as a broader toolbox for policy analysis.