Discussion paper series

on the

Coherence between institutions and technologies in infrastructures

WP0801

Exploring Policy Entrepreneurship

Marianne van der Steen

Twente University

John Groenewegen

Delft University of Technology

Edited by

Matthias Finger Management of Network Industries

Ecole Polytechnique Fédérale de Lausanne, Switzerland

Rolf Künneke Economics of Infrastructures

Delft University of Technology, The Netherlands

Managed by

Marc Laperrouza Management of Network Industries

Ecole Polytechnique Fédérale de Lausanne, Switzerland

Recent papers

2008

WP08-01 : Exploring Policy Entrepreneurship – Marianne van der Steen and John Groenewegen WP08-02 : Does liberalization increase systemic risk in the railway sector? – Marc Laperrouza

Exploring Policy Entrepreneurship

Marianne van der Steen1 and John Groenewegen2

Paper prepared for the EAEPE Conference, Rome, November 2008

Draft paper. Please do not quote without permission of the authors

Corresponding author: Dr. Marianne van der Steen University of Twente School of Management and Governance P.O. Box 217 7500 AE Enschede The Netherlands m.vandersteen@utwente.nl Abstract This paper explores the role of policy entrepreneurship and policy innovations in knowledge-based economies. This main purpose is to contribute to a better understanding of why and how policy makers can become entrepreneurial in the sense that they identify new policy issues and new instruments and learn over time about how to develop innovative policies. Keywords: Institutions, reflexive deliberation, technology- research- and science policy, public Entrepreneurship 1. Introduction This paper explores the role of the entrepreneurial policy maker, the role of policy makers who are innovative in terms of addressing policy issues and in developing new policy instruments. More general, the paper is about the

1 Twente University, The Netherlands. Corresponding author at: m.vandersteen@utwente.nl 2 Delft University of Technology, The Netherlands

1

issue of agents (policy makers) and structures (laws, regulations, organizations). The paper is structured as follows. In section 2 we make some remarks about the relationship between agents and structures in general and about the policy maker in particular. In section 3 we discuss the notion of the entrepreneurial policy maker. Section 4 presents the research site, methodology and the institutional and historical context of our case. Section 5 describes our analytic narrative based on policy innovations of policy makers in the Netherlands. Based on our analytical narrative, section 6 discusses features, conditions and types of policy entrepreneurs we have encountered in our case. Conclusions follow in section 7 2. About agents and structure In the approach based on Original Institutional Economics (OIE) (Rutherford 1994), the agent performs habitual behaviour. Institutions defined as systems of social rules, result after regular application in habits. The principle of “reconstitutive downward causation” (Hodgson, 2002) implies that institutions through habits strongly influence the actions of agents. “Strongly influence”, not determine. The habits do not only constrain, but also enable agents. In that sense agents also create institutions, like laws and organizations. Agents and structures interact, but in the OIE the focus is on the habitual behaviour of agents related to the institutional structures they operate in. This is an important insight to understand the role of policy makers, because these agents operate in a specific institutional context of values, norms, laws, and organizations, which ‘structure’ their mental maps with which they perceive problems, their role and the interaction with the others agents in the system. In short: policy makers perform habitual behavior based on their institutional environment. The issue of agent and structure is also prominent in sociology. Fleetwood (2008) discusses the contribution of Archer (2003), in which the process of ‘internal deliberation’ of the agent is central. Agents have first of all a ‘mental privacy’ and are capable of ‘reflexive deliberation’. This capacity of reflexive deliberation is part of human nature. Agents use that capacity in an environment of ”natural, physical and social structures”. The deliberation can be about the desirable actions within a specific context of structures, or about the desired change of the structures themselves. Interaction with other agents is often important to reach a decision about the actions the agent

2

perceives as right and effective: so-called ‘communicative reflexivity’. In this approach the agents can change their intentions and behavior based on reflexive deliberation. This is an important insight to understand the role of the entrepreneurial policy maker, because these agents show independent behaviour breaking habits. They have ‘internal conversations’ and communicate these with agents in their environment. In order to be effective an entrepreneurial policy maker should have some specific internal characteristics and operate in an environment with conditions that allow him or her to introduce and develop the innovative ideas and instruments. In our analysis of the entrepreneurial policy maker we make use of the insights offered by the two approaches outlined above. On the one hand policy makers will show habitual behaviour caused by institutions. Then policy is of a non-deliberative nature. On the other hand policy makers can break with the habits and explore new issues and new instruments. Then policy is of a deliberative nature. Both approaches are relevant to understand the role of policy makers in a specific institutional context (Fleetwood 2008). In this paper we try to understand the characteristics of entrepreneurial policy makers that are able to break with habits and initiate new policies and explore under what conditions these policy makers can be effective. The layers of institutions and the role of the agents being both creative and habitual in their behaviour is shown in figure 1.

3

Informal Informal institutions: - Culture - Values - Norms

Technology: - Trajectories - Artefacts - Operationalisation

- Socio-political system, in which policies are developed. - Role of government and policy makers - Business - Universities and other institutes

Formal ‘rules of the game’: - Laws (property rights) - Regulations

Institutional arrangements between the agents in the system: - Contracts - Organisations (i.e. regulatory agencies - Hybrids like networks

Agents: - (Shared) mental maps - Habits and routines - reflexive deliberation, human creativity and learning - Power , resources, authority

Layer 1

Layer 2

Layer 3

Layer 4

Layer 5

Figure 1: Layered institutional model

3. Who is the policy entrepreneur3? In this section, we discuss the evolutionary economic view on the entrepreneurial policymaker.

3 In this text we use ‘policy maker’ and ‘government’ interchangeably. Likewise we interchange actor and agent.

4

The policy entrepreneur in institutional theory Traditionally, literature on entrepreneurship focuses on (capabilities and resources of) entrepreneurial private agents and their networks. More recently, some scholars have shifted their attention to the broader institutional environment, such as legal and political conditions, that reinforces or impedes entrepreneurial and innovative behavior (Powell and Huang). Although the importance of institutional renewal in terms of political and policy conditions is recognized, government is seldom associated with entrepreneurship. Traditionally mainstream theory divides institutional arrangements between the market and the state. Policymakers are part of the state and therefore are by definition perceived as a top-down hierarchy with little room for problem-solving and renewal. Intuitively, there is a great potential of perceiving policymakers as policy entrepreneurs as an alternative for neoclassical optimal policy interventions (e.g. Ostrom, 2005). The literature on the evolutionary learning policymaker or policy entrepreneur proposes instead on the adaptive, satisfying behavior of (policy) actors who are bounded in their rationality but undertake actions in attempt to leverage resources to create new institutions or to transform existing ones (e.g. Metcalfe 1995; Witt, 2003; Wohlgemut, 2000, Groenewegen and Van der Steen 2007). This opens the potential for policy entrepreneurship and learning. So far, the literature on policy entrepreneurship is still in its infancy.4 It is argued that the research on institutional, public and policy entrepreneurship is still a rather disorderly and scattered body of research (e.g. Leca et al, 2006). There are several different definitions used in the literature (see figure 2 for some examples) based on literature on institutional entrepreneurship (e.g. Di Maggio, 1988; Campbell, 2004; Fligstein, 1997, 2001), political entrepreneurship (Lopez, 2002; Francois, 2003; Wohlgemut, 2000), public entrepreneurship (e.g. Dahl, 1961; Ostrom, 2005; Schnellenbach, 2007) and policy entrepreneurship (e.g. Edwards et al, 2002; Kingdon, 1984; Schneider and Teske, 1995; Roberts and King, 1991). 4 Recently, scholars have (re)attended to associated notions such as institutional entrepreneurship as introduced by Di Maggio (1988), public entrepreneurs (e.g. Ostrom, 2005), policy entrepreneurs (e.g. Kingdon, 1984; Schneider and Teske 1992) and evolutionary policy maker (e.g. Witt 2003).

5

Figure 2 Some definitions on institutional and policy entrepreneurship Institutional theory

Examples of definitions

Institutional entrepreneurship

The generation of new organizational and regulative models and policy shifts initiated by either an individual or organizations in this broader institutional environment. The behavior of institutional entrepreneurs deviates from the established institutional norms and routines and their actions may eventually change the institutional arrangements (e.g. Garud et al 2007) Actors that actively mobilize resources to create new institutional logics or transform existing logics or frameworks. These actors spread knowledge about the innovation and ensure that key stakeholders accept it as appropriate. The define agenda’s as well as ally, lobby, co-opt or contest other constituents in order to succeed in their institutionalization projects (Scott, 2006, Maguire and Hardy, 2006, Jain and George, 2007).

Political entrepreneurship

Individuals whose creative acts have transformative effects on politics, policies or institutions (Sheingate, 2003) Individuals who change the direction and flow of politics (Schneider and Teske 1997) The introduction of a new combination into the policy process. This can be a new political program or a proposal for institutional reform (Wohlgemut 2000; Francois, 2003)

Policy entrepreneurship

Person’s willing to use their own personal resources of expertise, persistence, and skill to achieve certain policies they favor (Weissert, 1991: 214)

Some contributions focus on the personal traits and characteristics of the policy (or political) actors that enhance policy entrepreneurship such as their social position (e.g. Fligstein, 1997), risk taking behavior (e.g. Schneider and Teske, 1995), discovery and mobilization of political preferences and support (e.g. Kingdon, 1984; Francois, 2003; Wohlgemut, 2000) and autonomous reflexive behavior (Mutch, 2007). Others focus instead on the conditions in the institutional structure under which circumstances policy makers (or politicians) are more likely to undertake learning and entrepreneurial behavior such as institutional pressures (Cooper et al, 2008) contradictions among institutional logics (e.g. Seo and Creed, 2002, new technologies (Garud et al, 2002) and precipitating jolts or crisis (e.g. Greenwoord, 2002; Fligstei 1997, 2001).

6

As the literature on policy and institutional entrepreneurship is still rather scattered, we focus and discuss policy entrepreneurship within the framework of the evolutionary policy maker. The evolutionary entrepreneurial policy maker According to institutional evolutionary economics, policy makers are not only bounded in their rationality and confronted with information asymmetries, but the uncertainty agents face is of a radical nature. Agents are part of an ongoing process, where no end states can be formulated and rationality is contingent and procedural. Satisfying behavior holds for all actors including policy makers. Economic processes co-evolve with technological, cultural and institutional processes. Such an approach provides insights into path dependencies and irreversibilities. The effectiveness of policy is local; it depends on the situation at hand: in one case government should only offer options and facilitate and in other cases it should guide or even direct technological development. An effective government is aware of its limitations (and those of the other actors) and of the danger that processes can be captured by powerful interest groups and can become locked into undesirable paths of development. An effective government is also aware of the possibilities of the necessity to explore and to learn and of the necessity to create opportunities. Based on their picture of the evolutionary world, institutionalists conclude that the state should “foster learning, enhance human capabilities, systematically incorporate growing knowledge and adapt to changing circumstances” (Hodgson 1999). Others add that government should allow for experimentation (Hodgson 1999, 248, 262; Groenewegen and Künneke 2005), and create variety (Metcalfe 1995). Such a entrepreneurial policy maker can only be effective under specific conditions and with policy agents that have specific characteristics. In other words: the analysis should be context specific (what are the conditions at hand?) and explore the ‘mental maps’ and ‘mental privacy’ of the agents. 4. Research site and methodology

7

This section discusses the methodology and the institutional and historical context of our case to demarcate the evolutionary institutional environment, in which the policy makers interacted and learned over time Given the complexity of the unfolding processes of policy entrepreneurship, we use the methodology of a longitudinal case study (Yin, 1994). As suggested by Wilber and Harrison (1978) we induce insights from the case through interpretive means and generalize from the case “themes” and a typology of characteristics of the entrepreneurial policy maker and conditions that makes such policy effective. We explore the case of policy innovations of Science, Technology and Innovation policy in the Netherlands since the 1980s, leading up to the establishment of the Technological Top Institutes (TTI). This particular instrument was the first cornerstone of the current technology policy of the Netherlands. Moreover, this particular approach and policy instrument was adopted by many other governments afterwards (European Commission, 2004). Our analytic narrative reveals the different features, characteristics and roles of entrepreneurial policy makers, the conditions that enable or constrain policy actors to behave entrepreneurial and their learning processes. Research Site Sampling in theory building studies relies on choosing “strategic research sites” (Bijker et al, 1987) that capture integral aspects of the theoretical phenomena being examined. The research site for this study is the Ministry of Economic Affairs in the Netherlands in the period 1984-1994. There are several other policymakers involved as well in the development of science, technology and innovation policy (Ministry of Science and technology, Ministry of Agriculture, Ministry of Finance, advisory boards and political parties). The Ministries have various functions in the path leading towards the (instrument of the) TTIs. The Ministry of Economic Affairs (EZ) is the main technology policy maker with regard to science and business. The Ministry of Economic Affairs is charged with the co-ordination of technology policy with the other Ministries. The Ministry of Education, Culture and Science is primarily responsible for science policies, as well as the co-ordination of these policies among the various Ministries. The Advisory Council on Science and Technology (AWT) gives general advice to the government in the various areas of science and technology policies. Based on the expenditures figures for science and technology policies around that time, The Ministry of Economic Affairs and the Ministry of

8

Education account for almost two-thirds of all expenditures (MERIT, 1997). Other Ministries spent significant amounts on science and technology in the fields of health care, agriculture, transport and water regulation. Each Ministry is responsible for research policy in its own field (Second Chamber, 1992). In our study the focus is on the Ministry of Economic Affairs, which is responsible for the co-ordination of all technology policies, and the Ministry of Education, Culture and Science, which is responsible for the science policies. Methodology To trace the actions of the Ministry of Economic Affairs aimed at establishing the policy instrument of the Technological Top Institutes, we integrated data from different sources using multiple methods to increase reliability and validity of our findings. We employed five sources of information: government policy papers (white papers, press releases), parliamentary documents, media coverage, archival documents and interviews with policymakers (and other representatives). We conducted detailed interviews with 8 individuals closely involved with the project teams responsible for the design of the new policy instruments to deepen our understanding of their personal features, characteristics and personal motivations behind their actions. In order to address the ‘how’ question, one requires a story that narrates the sequence of events that unfolds over time (Poole et al, 2000). In preserving a chronological flow, a narrative enables the researcher to gain a better grasp on events and processes that lead to the specific consequences. Proceeding from this principle, we have constructed a time line of events from the sources described above. The timeline was then employed to develop a qualitative account that described the flow of events related to the role of the individual policy entrepreneurs at the Ministry of Economic Affairs. Institutional, historical context of the research site 1979-1997 Historically, the Netherlands is characterized by a consultation economy in which government and “social partners” (representatives of employers and employees) negotiate about “National Agreements” on wages and price developments at the macro level; on collective labor agreements at the sectoral level; and at the micro level, stakeholders consult and negotiate on all kinds of labor conditions (Visser and Hemerijck 1997). Industrial and

9

later technology policy is also embedded in the Dutch consultation model, or so-called tri-partite consultation structure. We observe that until the 1970s, this interactive style of policy-making developed in a relatively stable environment of an economy in which national policies and instruments were effective. However, in the 1970s and 1980s, this strongly institutionalized consultation structure increased the rigidity of the Dutch economy, especially with respect to the labor market. Economic crisis (first and second oil shocks) forced Dutch government in the beginning of the 1980s to introduce a severe and unpopular austerity policy and to implement institutional changes in the economic system, including the rules of hiring and firing labor and the relatively generous social security system. Government was desperately looking for effective industrial policy instruments to save employment. The pressure of the economic crisis opened the possibility to renew government policy in a fundamental way: a shift from a defensive industrial policy to an offensive technology policy was made. This was reinforced by the changing economic vision of science and technology policy in the early 1980s. Influenced by new scientific insights on innovation, the Innovation Paper (1979) entailed a more business-oriented vision on innovations (Van der Steen 2006). This Innovation Paper, followed by three additional White papers marks the evolution in the new technology policy of the Dutch government from the 1980s onward. After the publication of the Innovation Paper, the division of labor between the various Ministries changed and a new directorate was created at the Ministry of Economic Affairs. Before, the Ministry of Education, Culture and Science was primarily responsible for science and innovation policy, whereas in the new vision on innovation, the Ministry of Economic Affairs was the primary innovation policy maker. Within the new setting of the Ministry of Economic Affairs and the adopted mental framework of the Innovation Paper, new policy routes evolved in the 1980s. The core of technology and innovation policy in the nineties was epitomized in the second white paper, “Economy with Open Borders” (1990). This paper reflected the increasing importance of globalization for the performance of the Dutch economy and the consequences for technology policy. Internationalization of technology, competition and finance made national industrial policy obsolete. National policy instruments were also limited, especially by the developments at the European level, marked in 1989 by the

10

Maastricht Treaty. There was a deeply felt need for a new policy focus and a new toolbox for technology policy. This was formulated in terms of “industrial clusters,” which became the central approach in the 1990s. In the Netherlands, this new approach evolved into a collective awareness about new potential roles of government to adapt technology policy instruments into a more pro-active style of policy making. 5. The process of development towards the Technological Top

Institutes In this section we explore the policy innovations of Science, Technology and Innovation policy in the Netherlands since the 1980s leading up to the policy instrument of the Technology Top Institutes (1997). Each of the main policy-makers in this process have a different focus and different policy networks. The Ministry of Education, Culture and Science is also responsible for education policy with its specific networks. The Ministry of Economic Affairs is more focused on the interests of business. The Ministry of Agriculture, Nature and Fisheries deals with one particular sector of the economy, while the Ministry of Finance is mainly concerned with controlling budget deficits. Thus, the Ministries involved have different habits and mental frameworks in determining the most promising and desirable policy routes. In addition, they have different knowledge networks; for instance, the network of the Ministry of Education, Culture and Science is dominated by the public research sector and universities, while that of the Ministry of Economic Affairs is mainly a business network. Consequently the habits of identifying problems (what is really the issue?) and instruments (more market?) differs strongly between the actors involved. The identification of the pressures for change is important to understand the causes of policy mutations and the type of learning that might take place over time. Towards the Globalization Debate (1990-1994) In the process of policy change, the new Minister, Koos Andriessen a former businessman, and a small group of policy entrepreneurs in the Minister’s inner circle, played a crucial role. As a political “outsider,” he was able to introduce the new mental map for the Ministry. His political term resulted in the “Globalization Debate” (1994), an open debate, in which leaders from government, business and academia expressed their concerns and discussed

11

solutions to the central question: “What is the competitive position of the Netherlands in the world and how can we increase its economic performance?” On the one hand this Debate reflected the typical Dutch consultation and cooperation between all parties involved. On the other, the debate broke with the tradition of long time-consuming negotiations and discussions via tri-partite consultative bodies in different layers of society. Because of the commonly felt sense of urgency, it “was allowed” to question and change the traditional Dutch consultation framework and to move to concrete measures quickly. One of the central outcomes of the debate was that the Netherlands needed “Technological Meccas” – centers of scientific excellence useful for innovation in industry. Policy paper “Economy with Open Borders” (1990): Personal vision of Minister The development towards the Globalisation debate took place in several steps that were not designed or planned, but rather evolved spontaneously, adapting to the circumstances in the period 1993-1994. The first step was the initial and personal vision of Minister Andriessen, who set the tone with his 1990 policy paper “Economy with Open Borders” (in Dutch: “Economie met open Grenzen”). This Porter-oriented paper shifted the focus of economic policy from defensive industrial policy – i.e. protection of the existing (sunset) industry – to innovation policy. The ideas of the Minister were strongly based on his own experiences as a business men. Policy paper ‘Globalisation, a certain trend’ (1993) The second step was the policy paper “Globalisation, a certain trend” (May 1993 in Dutch: “Globalisering, een zekere trend”), in which the vision and discussion topics related to globalisation were laid down. The main concern is the development that firms, in their effort to increase their cost-efficiency, were trying to find the most efficient combinations. Therefore, industrial firms were relocating more and more of their production abroad because of lower labour costs. It has been argued that in those days three thousand jobs disappeared each month because of these restructuring processes. So in line with the vision of minister Andriessen and his initial policy vision in “Economy with Open Borders” (1990), the policy paper “Globalisation, a Certain Trend” was initiated by a senior policy advisor at the Minister’s economic bureau (the policy directorate General economic Policy). This policy directorate was responsible for coordination of the main political economic themes in the whole Ministry. It resides directly under the Minister. At that time, this directorate was perceived as the ‘top’ economic

12

advisory body of the Ministry. They functioned rather autonomously from the rest of the Ministry. The policy paper “Globalisation, a certain trend” was initially written by a senior policy advisor at this directorate. According to this advisor, his ideas were based and inspired by a lecture of Michael Porter. He attended a scientific conference where Porter lectured on global competition based on his 1990 book 5. This policy advisor discussed his ideas in a personal meeting with the Minister. The Minister was enthusiastic about the paper and considered it to be an important follow-up of his 1990 vision. Policy paper in Parliament: legitimacy for the new approach (1993) The second step was the inclusion of the Globalisation Paper in the National Annual Budget 1994 (in Dutch: “Miljoenennota”), which meant that globalisation had been recognised as an important issue. The third step was the Parliamentary Debate on Globalisation (November 1993) on the basis of the policy paper “Globalisation a Certain Trend”. During the budget negotiations in relation to this policy paper, Parliament proposed to explore the globalisation trend and its economic consequences. The Minister on the other hand, proposed to organise a broad societal discussion about the future of industry. This was the personal idea of the Minister. Thus, it was agreed upon to set up a platform where the various players were invited to discuss the topic and to develop together the policy agenda. The Globalization debate (1994) The third step, the Globalisation Debate itself was an important catalyst for new ideas and projects. It set out the idea for the TTIs, mentioning the mutually felt need for ‘Technological Meccas’ (Report of the International Globalisation Platform, March 1994). The globalisation debate was the idea of the Minister, particularly the idea to talk directly to the firms instead of establishing consultative bodies. Again, it was the Minister’s background of a businessmen that he had trust in business people and in business-like manners of ‘getting the job done’ instead of talking and negotiating for years’. The Minister felt close to business people and preferred to talked to them directly. Moreover, time was

5 The understanding of the importance of Globalisation as recorded in the above-mentioned policy paper was developed during an international Economic Science Conference on Productivity, Sweden. During this conference, the advisor laid down his first ideas for the 1993 policy paper.

13

running out for the Minister as the elections were approaching and he wanted to get the job done before he was probably replaced. The process of design of the TTI policy instrument 1994-1997 Policy paper “Competing with Knowledge” (1994) This idea of “Technological Meccas” would later develop into the policy instrument of the Technological Top Institutes (TTIs). The new Minister of Economic Affairs, Hans Wijers, installed in 1994, placed the “Technological Meccas” high on the policy agenda. The third white paper, “Competing with Knowledge” (1994), is the first official document that referred to the TTI policy instrument. The paper provided a refinement of the policy problem, but the new policy instrument was not yet defined. The decision about the content of the new policy instrument was the result of separate policy learning paths (policy variety) of the Ministry of Economic Affairs, the Ministry of Education, Science and Culture, and the Ministry of Agriculture, in conjunction with their separate policy networks. Policy paper “Knowledge in Action” (1995) Parallel with the interactions in the three separate policy networks, a small interdepartmental project group was established to define the policy instrument. This resulted in the fourth white paper, “Knowledge in Action” (1995), in which the TTIs were defined. Therefore, the final definition of the TTI instrument was a compromise between the policy makers of the different ministries concluding that a TTI should be established within the existing knowledge infrastructure, should execute excellent scientific research that is flexible, interdisciplinary and important for the Dutch industry. Changes in the institutional environment (1994-1997) Within the separate policy networks of the Ministries involved in the policymaking process, the actors experienced various pressures for change. These pressures in the institutional environment influenced the particular policymakers of the Ministries to undertake certain actions (either content-wise or to speed up the process of developing the policy instrument). We discuss four central institutional pressures for change around that particular time.

14

• Pressures for change from business As we have discussed earlier, there was a perceived need in business and industry for a more transparent knowledge infrastructure. This was reinforced by the increased tendency of ‘outsourcing’ R&D to technological knowledge infrastructure. These trends increased the importance of interactions in knowledge network and so on. The pressures for change from business were picked up by the Ministry of Economic Affairs in particular, as reflected in their concept of ‘Centres of Excellence’.

• Pressures for change from University Universities are subjected to an increased pressure for change by the government, society and industry: they are called upon to add to the competitiveness of industry, and as such are given increased importance in the general drive towards the production of knowledge. Various interests played a role and the universities tried to limit the impact of change by presenting a new policy vision of a ‘Technological Mecca’. Particularly the Ministry of Education, Culture and Science, which mainly communicated the views of the established research community wished to focus only on the existing knowledge infrastructure. There are differences between the research culture in business and that in a university, which are reflected e.g. in their perception of 'fundamental research’, or what ‘multidisciplinary’ means. It will be obvious that the research culture, and the related habits of thought and action within an academic community, are very different from that of business. This often hampers communication between these two sectors of society, as can also be seen from the problems in communication between the various policy-makers (i.e. Economic Affairs, Education, Culture and Science, Agriculture, Nature and Fisheries), all of which are clearly operating from different mental frameworks.

• Agricultural sector

The Ministry of Agriculture, Nature and Fisheries constitutes a special case here, because it is responsible both for the agricultural business sector and for the Research Institutes and universities that are concerned with agriculture. There is a very tight and informal policy network between government, business, and Research Institutes. Also in this sector the competition from the agricultural industry and food-processing firms, often operating internationally, is increasingly being felt.

• Pressures for change Government for interactive learning

15

The new policy instrument required the building of new habits and routines by the technology policy maker, who was forced to combine a research-oriented with a business-oriented perspective. Since there was no script available to develop such a policy instrument, technology policy makers were forced to co-operate within a rather fragmented technology policy structure. The fact that particularly the Minister of Economic Affairs was very committed to the idea of the establishment of TTIs has been an important factor for the relatively rapid establishment of the TTIs already in 1997. Moreover, Minister Wijers’ personal qualities definitely helped in three ways: his commitment to the idea, his vision of the future TTIs, and in particular the fact that business and industry had a lot of confidence in this Minister. 6. Personal characteristics of the policy entrepreneur and additional

attributes From the above it seems important that the entrepreneurial policy maker combines autonomous reflexive behavior with skilled social action (Fligstein, 1997, 2001) and an influential social position6. The policy maker should be able to relate to situations of others and in doing so provide them with reasons to cooperate (Fligstein 1997, 2001). They need to be endowed with sufficient authority and legitimacy and have open and confidential links with the community involved. Moreover, the entrepreneurial policy maker should be able to create tension around the legitimacy of the existing institutional arrangements so the need to replace these is widely felt. (Seo and Creed 2002). Then the policy maker is able to mobilize allies (Leca, 2007) and to develop alliances and cooperation. It is particularly important to convince in a discourse the key agents in the network (business, universities, political players, unions). In that respect it is crucial to apply the ‘principle of minimal dislocation’(do not question highly valued objectives of the structures that will be replaced). Finally, do not stretch the cognitive distance with the other key agents to far (stay within their mental maps). The case also shows that so-called multiple embeddedness (being member of different policy networks like business, unions, universities and politics) of

6 Examples of autonomous reflexive behavior: Andriessen, Wijers, senior policy advisor Van Esch (main senior policymaker during all the policy papers discussed) and Twan Maes.

16

the policy entrepreneur facilitates his role. Both ministers were for example strongly involved in the business networks. At the level of senior policy advisors, it helped that directors were employed before at other ministries (for instance Vijlbrief of the Ministry of Economic affairs was formerly employed at Ministry Education and Twan Maes visa versa). The multiple embeddeness is important to build bridges between different spheres. 7. Discussion and conclusions Our analytic narrative reveals the different features, characteristics and roles of entrepreneurial policy makers, the conditions that enable or constrain policy actors to behave entrepreneurial and their learning processes. The case study also reveals the relevance of both the institutionalist and the sociologist perspective on the issue of agent and structure. Fleetwood (2008, 200) clarified that the perspective of (…..) structures, reflexive deliberation, and the internal conversation operate jointly with institutions, rules and habits”. The insights of the institutionalists that habits are the linking pin between institutions and individual behaviour are as relevant as the insights of the sociologist that individual action is also caused by reflexive deliberation. The entrepreneurial policy maker operates in existing structures and his or her behaviour is based on habits. This connects to the first type of lerning we can distinguish among policy makers. The so-called “normal” learning (Denzau and North 1994) takes place within a well-defined institutional framework, with harmonious relationships between the hierarchy of the institutional layers (figure 1) and based on clear and stable shared mental maps of the actors involved. The learning process is one of incremental change toward perfection. It is the situation of stable preferences of actors, including government, of clear signals that actors can code and decode with certainty. Imitation, experimentation, and trial and error are all possible within the existing policy trajectory, but without disturbing its basic features; in other words, a novelty is absorbed and molded so it fits well in the system and can contribute to further perfection. The main condition for this type of learning is stability in the sense of no external shocks and stable preferences. This requires long-term relationships

17

based on trust and reputation, continuous interactions that facilitate stable policy learning. Government as well as other actors should have clear-shared mental maps. The policy maker in this world of “normal” learning does not need particular entrepreneurial skills or possess particular entrepreneurial characteristics. The policy maker needs to be well-embedded in the organizational and socio-political environment, needs sensitivity towards developments in the policy environment, empathy to ensure cooperation from other policymakers, elaborates in an existing framework (policy trajectory) and organizational setting, position (formal and informal) is not decisive for normal learning (can be at all levels) t as long as the task has been assigned clearly to the policymaker. The enabling conditions for normal learning are stability of institutions (Beckert, 1999), no external pressures, clear widely accepted rules of the game and no disagreement about the important policy issues and effective instruments. The entrepreneurial policy maker can also operate in less stable structures, in which habits are less strongly embedded in institutions and because of increasing tensions habits and rules of the game are questioned. Then the type of so-called “direct” learning (Denzau and North 1994) becomes relevant: the policy maker can “re-describe” the situation. New cognitive models and new habits of thought develop in the process towards the new “logic”. Crisis is often the pressure to change and for political and institutional entrepreneurs to invest in new ways of thinking. What are the conditions under which such a type of policy learning, a switch towards a new path, can be made? Next to individual action of entrepreneurship, there should also be a trigger to “collective action.” There must be access to resources, and economic and political pressure should exist that moves the system into the new direction. A careful balance between exploitation (making more efficient use of existing structures) and exploration (initiating and implementing new structures) should exist, as well as an awareness that cognitive distance should not be too large (Nooteboom 2000). Preferably, the new vision should be materialized in projects with a clear “demonstration effect” so actors see the benefits of the changes. The policymaker should have a sufficient level of autonomous reflexive deliberation. There is a need for the capability of social action (social sensitivity and emphatic; discursive strategies). There is a need of a sufficient level of political legitimacy.

18

Conditions that favour ‘direct learning’ are institutional pressures resulting from a certain degree of heterogeneity of rules. Critical external events, scarcity of resources and emerging new fields or demands, can provide the conditions that facilitate the entrepreneurial policy maker. References Archer, M., (2003), Structure, Agency and the Internal Conversation, Cambridge University Press. Bush, P.D. “The Methodology of Institutional Economics: A Pragmatic Instrumentalist Perspective.” In institutional Economics: Theory, Method, Policy edited by Marc R. Tool, 59-107. Boston: Kluwer Academic Publishers, 1993. Dahl, R. (1991), Who governs? Democracy and Power in an American City. New Haven Yale University Press. Denzau, A. T., and D. C. North. "Shared Mental Models: Ideologies and Institutions." Kyklos 47, 1 (1994): 3-31. DiMaggio, P. (1988), ‘Interest and Agency in Institutional Theory’, in: L. Zucker (ed) Institutional Patterns and Culture. Cambridge, MA: 3-22. Edwards, C., G. Jones, A. Lwton, N. Llewellyn (2002), Public Entrepreneurship: Rethoric, Reality and Context, International Journal of Public Administration 25(12), 1539-1554. Fagerberg, Jan. “Economic Policy Making in Evolutionary Perspective.” Journal of Evolutionary Economics 13, 2 (June 2003): 125-59. Fleetwood, Steve. (2008), Structure, institution, agency, habit and reflexive deliberation, Journal of Institutional Economics, 4, 2, 183-203 Fligstein, N. (2001), Socvial Skills and the Theory of Fields, Sociological Theory 19, 105-125.

19

Garud, R., C. Hardy and S. Maguire (2007), Institutional Entrepreneurship as Embedded Agency: An Introduction to the Special Issue, Organization Studies, 28 (2007): 957-969. Groenewegen, J. and M. van der Steen (2006), “The Evolution of National Innovation Systems.” Journal of Economic Issues 40, 2 (June 2006): 277-285. Hodgson, G.M. “The Approach of Institutional Economics.” Journal of Economic Literature 36 (1998): 166-192. ———. Economics and Utopia. London: Routledge, 1999. Hodgson, G.M. (2002), Reconstitutive downward causation: social structure and the development of individual agency, in: Edward Fullbrook (ed.), Intersubjectivity in Economics: Agents and Structures, London and New York; Routledge Kingdon, J. (1984), Alternatives and Public Policies, Boston: L. Brown. Leca, B. and P. Naccache (2006), A Critical Realist Approach to Institutional Entrepreneurship, Organization, 13 (2006): 626-651. Metcalfe, S. “Technology Systems and Technology Policy in an Evolutionary Framework.” Cambridge Journal of Economics 19, 1 (1995): 25-46 Ministry of Economic Affairs, Economie met Open Grenzen (translated Economy with open borders), Second Chamber 1989-1990, no. 21670, Ministry of Economic Affairs, The Hague: SDU Publishers 1990. ———. Concurreren met kennis: beleidsvisie technologie (translated Competing with knowledge: policy vision technology), Second Chamber 1993-1994, no. 23 206-1. ———. Nationaal platform globalisering (translated the Globalization debate, March 24th 1994, Ministry of Economic Affairs, The Hague, March 1994.

20

———. Ministry of Culture, Science and Education and the Ministry of Agriculture, Kennis in Beweging (translated Knowledge in Action). Dutch Ministry of Economic Affairs, The Hague, 1995. Moreau, F. “The Role of the State in Evolutionary Economics.” Cambridge Journal of Economics 28 (2004): 847-874. Nooteboom, B.N. “Institutions and the Forms of Co-ordination in Innovation Systems.” Organisation Studies 21, 5 (2000): 915-939. North , D.C. (2005), Understanding the Process of Economic Change. Princeton: Princeton University Press, 2005. Ostrom, E. (2005), Unlocking Public Entrepreneurship and Public Economies, EGDI Discussion Paper no. 2005/01, Expert Group on Development Issues, United Nations University. Pelikan, Pavel and Gerhard Wegner (eds.). The Evolutionary Analysis of Economic Policy. Cheltenham: Edward Elgar, 2003. Rutherford, M.H. Institutions in Economics: The Old and New Institutionalism. Cambridge: Cambridge University Press, 1994. Schneider, M. and P. Teske (1992), Toward a Theory of the Political Entrepreneur. Evidence from Local Government. American Political Science Review, 86 (3): 737-747. Schnellenbach, J (2007), Public Entrepreneurship and the Economics of Reform, Journal of Institutional Economics 3(2), 183-202 Sheingate, A.D. (2003), Political Entrepreneurship, Institutional Change and American Political Development, Studies in American Political Development 17, 185-203. Simon, H. “From Substantive to Procedural Rationality.” In Method and Appraisal in Economics edited by S. Latsis, 129-148. Cambridge: Cambridge University Press, 1976. Witt, U (2003), Economic Policymaking in Evolutionary Perspective, Journal of Evolutionary Economics 13 (2003): 77-94.

21

Visser, J., and A. Hemerijck. A Dutch Miracle. Amsterdam: Amsterdam University Press, 1997. Van der Steen, M. Technology Policy Learning in the Netherlands 1979-1997: the case of the technological Top Institutes. MIMEO. December 2006, www.tbm.tudelft.nl Wegner, Gerhard. “Economic Policy from an Evolutionary Perspective. A New Approach.” Journal of Institutional and Theoretical Economics 153, (1997): 485-509. Wilber, C. K. and R.S. Harrison. “The Methodological Basis of Institutional Economics: Pattern Modelling, Storytelling, and Holism.” Journal of Economic Issues 12, 1 (1978): 61-89. Wohlgemut, M. (2000), Political Entrepreneurship and Bidding for Political Monopoly, Journal of Evolutionary Economics 10, 273-295.

22