Policy Diffusion in Incomplete Decentralized System: The Case of Diffusions of Housing Provident Fund (HPF) Policy in Urban China

Abstract

Most existing studies of policy innovations focus on the cases in which policy-making process is decentralized. However, in many developing countries, such as China, the extent of decentralization is limited. Thus, the determinants and mechanisms of diffusions of policy innovations in such a less decentralized system could be different from what has been established in the literature. Housing reform, which was deigned to transform the welfare-oriented housing policy to a market-oriented one, was an important part of the policy transformation of China since 1980s. This article specifically analyzes how the housing provident fund (HPF) policy has been diffused in urban China during 1990s. Using a revised theoretical framework which integrates both local political economy factors and national policy priorities of the central government, this study contributes to explain more systematically what factors determine the adoptions of new policies in the less decentralized system of China.