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Federal Home Loan Banks: A New Player in Community Development
Unformatted Document Text:  magazines. The story that emerges from analysis of this data illustrates a behavioral choice theory of the policy process; specifically, John Kingdon’s now virtually classic multiple-streams theory is a good fit (1984). Political scientist Bryan Jones and his co-authors have recently engaged in a campaign calling for reinvigoration and elaboration of the behavioral choice paradigm as the framework for studies of policy-making and administrative processes, in contrast to the public choice paradigm that has gained such prominence in political science (Jones 2002). The fundamental difference between theories in the two paradigms lies at the micro-foundation. In behavioral choice theories, the self-interest maximizing rational individual at the base of public choice theories is replaced with an individual characterized by bounded rationality. The “bounds” on rationality are both substantive and procedural. Substantively, rational self-interest may be limited by such other motivations as norms, ideological commitments and altruism. Procedurally, rationality is limited by how much an individual can attend to at one time and by the nature of the environment. Bounds on individual cognition matter in organizational theories of the policy process (like Kingdon’s or Baumgartner and Jones 1993) because organizations are made up of individuals. While organizations can overcome the bounds on individual rationality – indeed, that is why we build organizations, they may also be caught up in the same kinds of limits because organizational information processing is essentially individual cognition writ large. In his application of bounded rationality to policy making, Kingdon viewed the system of formal and informal institutions in which the policy process takes place as a big, loose organization. Policy problems persist in a stream in this organization that is essentially independent from another stream of policy solutions (or “alternatives”). A third stream, the political stream, is composed of people who may, or may not, couple problems with solutions 17

Authors: Cassell, Mark. and Hoffmann, Susan.
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magazines. The story that emerges from analysis of this data illustrates a behavioral choice
theory of the policy process; specifically, John Kingdon’s now virtually classic multiple-streams
theory is a good fit (1984).
Political scientist Bryan Jones and his co-authors have recently engaged in a campaign
calling for reinvigoration and elaboration of the behavioral choice paradigm as the framework
for studies of policy-making and administrative processes, in contrast to the public choice
paradigm that has gained such prominence in political science (Jones 2002). The fundamental
difference between theories in the two paradigms lies at the micro-foundation. In behavioral
choice theories, the self-interest maximizing rational individual at the base of public choice
theories is replaced with an individual characterized by bounded rationality. The “bounds” on
rationality are both substantive and procedural. Substantively, rational self-interest may be
limited by such other motivations as norms, ideological commitments and altruism.
Procedurally, rationality is limited by how much an individual can attend to at one time and by
the nature of the environment. Bounds on individual cognition matter in organizational theories
of the policy process (like Kingdon’s or Baumgartner and Jones 1993) because organizations are
made up of individuals. While organizations can overcome the bounds on individual rationality
– indeed, that is why we build organizations, they may also be caught up in the same kinds of
limits because organizational information processing is essentially individual cognition writ
large.
In his application of bounded rationality to policy making, Kingdon viewed the system of
formal and informal institutions in which the policy process takes place as a big, loose
organization. Policy problems persist in a stream in this organization that is essentially
independent from another stream of policy solutions (or “alternatives”). A third stream, the
political stream, is composed of people who may, or may not, couple problems with solutions
17


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