A Social Constructionist Perspective on the Diffusion of Innovative Fiscal Responsibility Legislation

Compared to competitive, coercive and learning models, social constructionist theory is particularly well-suited to explaining the diffusion of policy norms across cross-country networks. This paper augments this approach with a myth perspective that is applied to an analysis of the diffusion of the qualitative fiscal norms embedded in New Zealand's innovative Fiscal Responsibility Act of 1994. The ‘prime mover’, ‘innovative discontinuity’ and ‘unmodified legislative success’ components of the agent significance myth surrounding this fiscal responsibility law (FRL) are examined and the scope and limits of its subsequent diffusion are related to mutual identification and interaction across pre-established network linkages between actors who have learnt its usefulness. The relative durability of myths compared to fads lend an unpredictability to the diffusion process, the potential limits of which are shaped by cultural and institutional factors that influence the receptiveness of governments to such norm-based approaches to fiscal discipline.