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Rational Learning and Bounded Learning in the Diffusion of Policy Innovations

Juan March Institute, Spain, covadonga.meseguer{at}cide.edu

In political science, rational learning and bounded learning are commonly studied as two opposing theories of policy choice. In this article, I use a rational learning approach to reach conclusions about bounded learning, showing that the two theories are not necessarily incompatible. By examining a rational learning model and the decisions of a set of developing countries to open up their trade regimes, I show that countries are particularly influenced by the choices of neighbouring countries and by particularly successful policy experiences. These are two typical contentions of the bounded learning literature. I argue that bounded learning and rational learning yield the same results as soon as one drops the rational learning assumption that there are zero costs to gathering new information. I use the discussion on rational learning versus bounded learning as a basis for exploring more general issues concerning the diffusion of policy innovations.

Key Words: bounded learning • developing countries • policy diffusion • rational learning • trade policy

Rationality and Society, Vol. 18, No. 1, 35-66 (2006)
DOI: 10.1177/1043463106060152


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