Interdependent Policy Learning: Contextual Diffusion of Active Labour Market Policies

Abstract

This chapter analyses in which ways diffusion based on interdependent policy learning explains expenditure on active labour market policies (ALMP) in the OECD countries. By applying error correction models using multiplicative spatial Prais-Winsten regressions for analyzing the diffusion of ALMPs in 22 OECD countries from 1991–2013, we find evidence of governments adapting labour market policy strategies that have proven successful, that is, perform well in increasing labour market participation in other countries. However, interdependent learning is conditional on the institutional framework: policy-makers rather learn from the experience of other countries in the same welfare regime. Even more importantly, the results point to the importance of the European Employment Strategy (EES) as an international coordination framework facilitating policy learning.