Yardstick Competition and Policy Learning in Multi-level Systems

Abstract

Social scientists widely agree that intergovernmental competition can stimulate policy learning and can motivate governments to emulate innovative and successful practices. However, this assumption has to be qualified. Rather than market forces driving governments to compete for mobile tax payers, procedures known as ‘yardstick competition’ promise to achieve policy learning and transfer. In this case, governments participate in comparative evaluation of their performance and try to improve their relative position in rankings or come closer to best practices. While theoretical reasoning provides convincing reasons for this assumption, in practice different conditions have to be met to make governments learn. Yardstick competition has to be organized, but procedures and evaluations are often disputed. Governments have to be willing to participate, which cannot be taken for granted unless we know what motivates them to compete. According to theory, parliaments or voters can drive executives to meet best practices. But members of parliaments or voters are regularly guided by party competition or by media debates inside their jurisdiction and less interested in what other governments do. The article discusses conditions that can impede or promote successful yardstick competition and policy learning. Empirical evidence is based on studies of inter-regional policy competition in Germany.

Keywords:

• Benchmarking
• competition
• multilevel governance
• policy learning

Notes

I follow the usual terminology, although the denominations do not clearly indicate what is meant. In institutional competition, governments compete as “institutions”, providing packages of policies they offer to attract tax payers. While individual tax payers may be interested in particular policies, competition affects governments in most of their activities, i.e. as institutions. In yardstick competition, particular policies are at stake, and governments compete through decisions of policy-makers.

The differentiation of institutional and yardstick competition has analytical purposes and refers to ‘ideal types’. In reality, modes of competition are not always clearly distinct.

These findings are gained from network analyses of all 18 regions selected in the programme “Regionen aktiv”, a competition for best practices in rural development policy.

A. similar strategy can be observed in the EU. Here yardstick competition appeared under the label of the Open Method of Coordination. At first, the European Commission tried to foster competition by ‘naming and shaming’ low-performing national governments and by ranking member states. After member-state governments expressed their dissatisfaction with this approach, the Commission turned towards a more co-operative approach (Borràs, 2008).