1. Theoretical framework____________________________________________ 35
1.4 Ideas: Institutionalization or utilization of ideas
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costs, and second, policies establish mental images which serve to filter incoming information and feedback. Given a low level of differentiation between state and society, the government can pursue its preferences coherently; but in order to determine its preferences, each unit of the government is involved in feedback processes that inform its decisions towards policy creation or change. When different states become involved in these feedback mechanisms (through institutions that have direct contact with foreign governments, as the Bureau of Foreign Trade or the Ministry of Foreign Affairs), they are expected to at least consider the feedback received from these third parties, particularly relative to markets where there is a strong foreign presence.
The way in which this policy loop functions is one of mutual reinforcement. Policy enables practice, while practice informs policy. Policymakers study and act based on a preferred structure for the market; thus they devise a procedure. This procedure is put into action through policy enactment. Before or after its implementation, interested groups will send feedback to policymakers; if this is done ex-ante, the feedback will be mediated into policy; if it is done ex-post, it will be considered towards policy change. This mechanism of reinforcement, for the meat markets in Taiwan, has to consider that the players in the market are not only domestic; as this research will show in Chapter 1, for bovine and ovine meat the domestic players are limited basically to importers. On the other hand, for porcine and poultry meat, foreign participation is limited, thus feedback processes is expected to be largely dominated by domestic groups.
The formation of a historical structure through feedbacks can shed light not only on how policy is determined, but also on how foreign players have embedded themselves in a market with limited competition, as the meat markets in Taiwan. The participation of foreign states in policy feedback processes is highly unexplored within the theory, thus particular mechanisms of analysis are not available. Thus this research aims to contribute to theory building in this regard by applying a tool that was devised to analyse domestic interaction, and use to analyse inter-state interaction towards preference and policy formation.
1.4 Ideas: Institutionalization or utilization of ideas
“Choices of specific ideas may simply reflect the interests of actors. It is crucial for anyone working on ideas and policy to recognize that the delineation of the existence of particular beliefs is no substitute for the establishment of their effects on policy. Advocates of an ideational approach to political analysis must begin by identifying the ideas being described and the policy outcomes or institutional changes to be explained” (Goldstein &
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Keohane, 1993, p. 11). Thus whether ideas find their way to policy through an interest-based or belief-interest-based system, they play an important role in policy decisions. In a sensitive topic, as agricultural trade has proven to be for developed and developing countries, ideas such as food security, or put it broadly the multifunctionality of agriculture, have become as relevant as efficiency and welfare creation in the world system. When it comes to agricultural trade the battle of ideas is fierce, thus it would be negligent towards the results of this research to avoid looking in this battleground on Taiwan’s meat policy.
Historical institutionalism and rational choice have a different perspective on the influence that ideas have on policies, and both positions will be reviewed towards this research.
The starting point for historical institutionalism is the fact that ideas represent shared causal beliefs. Therefore, causality towards the strategy or the outcome will be based on shared conceptions (or policy preferences to use the concept preferred by rational choice theory). Causal ideas are tantamount to strategies: “They are the road maps showing actors how to maximize interests, whether those interests are material or ideational” (Goldstein, 1993, p. 11). What’s important to understand is the way in which ideas make their way into the policy process, and once they are established, the relevance that their institutionalization plays. Goldstein establishes a four step process: First there is an agreement on current policy delegitimation. This step will lead to the opening of a policy window, as the existing beliefs will be considered flawed and new ideas could be put on the table. Policy entrepreneurs will generate an impetus for changes in the existing policy, and new sets of cause-effects relationships will be experimented with, resulting in the return of old policies, or the establishment of new ones. Finally, if the new policy is able to deliver the promises that the ideas made, then it will be reinforced through the development of rules and norms, becoming institutionalized. The process is similar to the one proposed by rational choice theory with the existence of policy entrepreneurs, and the deligitimation of old policies;
what separates them is the fact that rational choices understands actors moves through a logic of material interest (deadweight loss) but historical institutionalism sees policy preferences changing influenced by ideas.
International organizations behave strongly as arenas where policy ideas are not only discussed but also legitimized. For the current case study, ideas generated within APEC and the WTO will be tantamount to understand the international level of analysis that influences Taiwan’s protectionist/liberal trade policy. Ideas such as multifunctionality in agriculture, or liberalization regimes, contend within these organizations, and while these are non-binding (they do not interfere on the sovereign policy-generating domestic processes) these are ideas that find their ways into the domestic institutions and finally into policy, becoming binding in the national context.
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“Institutions may perpetuate ideas in two ways. First, they may preserve political support even for a poorly functional policy because they affect the ways and extent to which elites respond to changes in the environment. Second, institutions influence individuals’ incentives and can create new constituencies in support of particular public policies” (Goldstein, 1993, p. 17). There is a process of path-dependence that is hard to reverse once ideas have embedded themselves within institutions and through them within particular policy alternatives. Therefore, there are ideational constraints towards policy strategies that need to be considered, as these are embedded into institutions, altering policy preferences, tools, alternatives and choices. The normative influence that flows from international organizations into the domestic institutions in charge of trade policy will alter these preferences, and thus the results in policy making. And it is witnessed in food politics, as Robert Paarlberg (2013) has proved. He argues that in wealthy post-agricultural societies, farmers have become few in number, and most consumers are easily able to afford an adequate diet. In these societies, material conflicts around food and farming will persist, but social values (environmental, food security, culture or other) will begin to play a larger role.
It should be noted that through the four-step process, ideas have made their way into the trade-related institutions of Taiwan. This generates a double need in order to understand the outcomes: First, which ideas have acquired further relevance within the different institutions?
Liberal ideas or protectionist ones? Secondly, how embedded have these ideas become in order to understand dynamics of protectionism in the meat market? How important are they compared to the interest-based pressures on policy? The answers to these questions are not provided by the theory, but should come out of the empirical analysis. However, theory does provide a framework for analysis whether the ideas are adopted as principled believes or causal beliefs.
Theoretical research on the role of ideas on foreign policy has searched for rationales behind the adoption of particular ideas. Goldstein and Keohane (1993) identify three pathways through which ideas are adopted and come to determine policy. The first pathway is when ideas represent roadmaps, which happens particularly under conditions of uncertainty. People’s preferences for certain ideas are not given, but acquired; given that agents have incomplete information when they select policies, falling back on ideas grants any policy decision a back-up on which to rely.
Secondly, ideas become important in policy-making when a unique equilibrium is not clear; thus ideas help to alleviate coordination problems serving as focal points for the policy chosen. Trade liberalization at all costs can be put against the idea of multifunctionality of
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agriculture, and the decision to opt for the pareto-optimum policy will be determined not by the net result in welfare creation, but by the social values chosen to measure the results.
The third one, is the institutionalization of ideas. Independent of how ideas became embedded into institutions, these continue to play an important role even after the condition that embedded them has disappeared. Regarding the fight of ideas between liberalization and protectionism, institutions will mediate their impact on policy. Therefore when faced with the same problem, countries will react differently based on the normative bases of the interests they have formed. “Structures often embody different norms, and thus give different cues as to what actors should do” (Goldstein & Keohane, 1993). Thus which normative influence has made its way from IOs into Taiwan’s institutions in the axis of agricultural liberalization vis-à-vis protectionism for a particular reason (food safety, food security, multifunctionality), will have a large impact on the decisions made regarding policies of agricultural trade. The importance of IOs should not be diminished, since when faced with conflicting views from experts, politicians will have to decide whom to regard as authoritative, especially in matters of technical complexity. The contest for authority is particularly intense in the WTO, where the multifunctional paradigm and the competitive paradigm have presented two different normative frameworks for understanding agricultural activity and trade (Moyer & Josling, 2002). But the selection of a paradigm as a normative framework during a historically critical juncture (such as Taiwan’s WTO accession) sets in motion a process of institutionalization of the idea adopted that is hard to reverse.
Rational choice and ideas have had a vastly different relation, since the inclusion of ideas as mediators towards policy decisions goes against the understanding of the agents as profit maximisers. “Rational choice holds that the distortion injected into its models by the assumption that ideas do matter is a price worth paying for the analytical simplicity and parsimony such an assumption offers” (Gofas & Hay, 2012). However, Gofas and Hay acknowledge that rational choice has not been absent in the debate towards the importance of ideas. Particularly, there is one case in which rational choice has considered ideas highly relevant, and this is the second option of pathway mentioned above: Under the inexistence of a unique equilibrium, rational actors will use ideas as focal points that will help them converge towards one particular equilibrium.
Politics are driven by self-interested actors who determine their political outcomes based on their resources. Thus political activity is perceived as a competition; and in this competition, the role of ideas has to be weighed against material interests. In areas where there is relative uncertainty, outcomes are not clear, and the search for pareto-improving results has to rely on estimates based on potential equilibriums, which are different. Which
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equilibriums is chosen, therefore, is not evident. Even game-theoretical models have shown that in long-term games (of virtually any game), almost any outcome can occur (Fudenberg
& Maskin, 1986). One of the most important critiques made of rational choice in general, and rational actor models in particular, is their inability to explain the selection of goals or the rank ordering of priorities for actors, since these are matters of value choice more than analysis (Moyer & Josling, 2002). Under such a circumstance of relative uncertainty and value choices, the ideas held by players become the key towards understanding the outcome.
But, not every player is weighted similarly, and the relevance of certain actors will have a pre-eminence over others; therefore the ideas upheld by these actors will also be considered over ideas held by less powerful players. Garrett and Weingast (1993) researched the role of ideas in the construction of the European Union’s common market, and its regulatory framework. And while their analysis establishes that pure self-interested behaviour could have never achieved the results, they also acknowledge that the ideas that were used to find an optimal solution were never contrarious to the interests of the most powerful actor: Germany. In the analysis of normative influence flowing from IOs into Taiwan’s policy, therefore, the interests of powerful actors should also be taken into account.
As chapter 1 will show, the shift from an ideational basis of liberalization to the empowering of the concept of multifunctionality in agriculture is easily witnessed through Taiwan’s Trade Policy Reviews. The rationale for such a change can either be explained through the institutionalization of ideas or causal beliefs, or understood as part of larger strategy of a powerful actor(s) and interests to impose policies that will render them larger benefits or constraint policies that would have negative impacts for them. Ideas are selected, or constructed, based on a cost-benefit analysis, and used towards a particular material goal.
Thus rational choice is more interested in power than in the role of ideas themselves, as these are auxiliary to self-interested actors, and conclude that “there is nothing intrinsic in ideas themselves which gives them their power, but their utility in helping actors achieve their desired ends” (Garrett & Weingast, 1993).
According to Blyth (1997), for historicists ideas and institutions have an ontological priority over the individual, as these are born into systems of ideas that are socialized onto them in everyday activities. For rationalists on the other hand, such a conception of ideas is not possible, as all factors anterior to individuals (such as ideas and institutions) must be reducible to preferences of the individuals. Ideas become “economizing devices employed to reduce search costs” towards the achievement of such preferences (Blyth, 1997). They become functional in order to facilitate the outcomes to which their preferences are pointing.
And according to Garret and Weingast (1993) the role of ideas is to facilitate cooperation
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where self-interest alone would not suffice. Therefore they become a mechanism for overcoming collective action coordination problems, by establishing a focal point towards the desired equilibrium. For example, under the following scenario of a traditional prisoner’s dilemma, there are two alternatives of cooperation that have the same structure of payoffs:
Player B
C1 C2 D
C1 3,3 0,0 -1,4
Player A C2 0,0 3,3 -1,4
D 4,-1 4,-1 0,0
In this figure, two strategy combinations (C2,C2 and C1,C1) represent efficient solutions towards the problem faced by the different actors. Either one can serve as a focal point towards solving collective action problems and increasing cooperation. Thus shared beliefs will serve to foster cooperation, and institutionally organize a particular activity. But “shared belief systems and focal points, however, do not always emerge without conscious efforts on the part of the interested actors. Rather, they must often be constructed” (Garrett &
Weingast, 1993). Towards that construction, relative capabilities will have a great bearing on outcomes. Theory argues that ideational factors will gain relevance if the differences in payoff structures is limited and also if the distribution of capabilities between the actors is not highly asymmetrical. On the other hand, with large asymmetries, ideational factors will lose relevance.
To conclude this theoretical framework it must be said that the reviewed theories under second image and second image reverse establish rationales for understanding the domestic and international sources of a country’s foreign [trade] policy. Some aspects discussed above analyse from the perspective of ideas, others from interests, and also from institutions. These three perspectives are required in order to obtain a complete understanding of protectionism, since it is a policy option that “drinks” form these three sources as Bhagwati has established (1988). As defined in the conceptual framework, the understanding of protectionism as a political privilege that grants competitive advantage to certain players takes these policy issues into the realm of interests, ideas and institutions.
“Choices about the degree of openness of a state’s markets are quintessentially political ones. They entail decisions about the societal allocation of the costs and benefits of economic change. Moreover, these policy choices have undeniable political significance”
(Milner, 1988, p. 3). Thus policy choices related to protectionism or liberalization can be explained through the realm of IPE, and that is precisely the goal of this research.
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The mixture of theories presented in the paragraphs above may seem convoluted as it brings together several different perspectives. However, as this research aims to fully understand the meat markets of Taiwan, the proposition of having different theoretical prisms is a helpful one in order to unravel the causal complexity behind the selective protectionist, or selective liberalization policy taken up by the country. In his compilation of the Ohlin lectures, Jagdish Bhagwati (1988) is clear about the influence of ideological factors, interests (or material reality) and institutions (as they shape constraints and opportunities) in the determination of policies. In a similar vein, Helen Milner established in her work that “The formulation of a nation’s trade policy involves a struggle among domestic groups, the national government, and foreign governments. The complex interactions of these groups provide insights into the relationship between domestic and international politics” (Milner, 1988, p. 3). Not one single source of analysis will reveal the whole story, since several levels of analysis are involved, and they receive influence shaped by different factors.