when an opportunity – a policy window – presents itself. Analysis of our interviews,
supplemented with documentary data, reveals a story that is well told in Kingdon’s terms. The
commitment to resolve the S&L crisis opened a policy window in which a skillful policy
entrepreneur coupled the long-standing affordable housing and community development
problem with an alternative solution that had also been around for a long time, but was largely
new as a tool for dealing with the need at hand.
The Problem
While the S&L crisis percolated in the 1980s, federal appropriations for subsidized
housing and community development had declined precipitously. The impact of this was not yet
generally apparent because community development and affordable housing projects funded with
monies appropriated prior to the Reagan administration continued through the pipeline. But
groups and individuals in the housing and development policy community were aware that the
pipeline was drying up and of what that would mean in the near future.
The Policy Window and the Policy Entrepreneur
The collapse of nearly a quarter of the S&L industry opened a policy window.
Lawmakers felt compelled to honor the government’s commitment to protect depositors by
spending billions to resolve failing S&Ls and thereby ensure the stability of financial markets.
There was strong bi-partisan consensus that while the resolution would be expensive, the
situation had reached crisis proportions and delays in closing bad thrifts would only cost
taxpayers more in the long term: action was imperative (Cassell 2002). The political
environment in 1989 was thus one in which the thrift industry and its regulator were weak and
public acceptance that the government play a more aggressive regulatory role was high.
18
Convention