From ‘trial and error’ to major reform: The politics of Medicare demonstration projects

Abstract

Facing fragmented institutions and partisan polarization, officials in the United States often attempt to engineer policy change without assembling new legislative majorities. To this end, they have increasingly employed demonstration projects, policy innovations undertaken by administrative agencies designed to test alternative approaches to implementation or service delivery on a limited segment of the target population and for a limited period of time. Despite the increasing importance of demonstration projects, they are an undertheorized source of policy change. In this article, we conceptualize demonstration projects as part of a class of experimental institutions that, while incremental in scope, have the potential to ‘scale up’ into more substantial reforms. Data from three Medicare demonstrations suggest that policy change is more likely when programmes generate strong support constituencies; minimize administrative and infrastructural costs; are undertaken in contexts with few veto points; and align with the time horizons of elected officials.

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