The fable of policy entrepreneurship? Understanding policy change as an ontological problem with critical realism and institutional theory

How is policy change possible if policy entrepreneurs’ cognition, rationality and identity are conditioned by the very policy institutions they wish to change? To solve this paradox of embedded agency, we must avoid either voluntarism that inflates the role of actors to change policies as by existing policy entrepreneurship applications, or determinism whereby policy changes are decided by contextual forces. Instead, drawing on institutional theory, critical realism sees structures, institutions, and actions that constitute policy dynamics as existing in separate yet intertwined reality domains: structures (e.g., social relationships), and institutions (e.g., formal rules and norms such as institutional logics) in the Real domain, enable and constrain policy actors’ navigation of their social environments; the Actual domain represents the level at which events (actions) happen, as these actors constantly interpret varied institutions to adjust their structurally embedded actions when pursuing policy changes that can be observed in the Empirical domain. Put differently, structures and institutions are mechanisms in the Real domain that affect individual practices and events in the Actual domain, and only some of these events are realized in the Empirical domain as policy changes. We empirically illustrate this critical realist approach with a Chinese example on health care reform.