Between hierarchies and markets: How street‐level bureaucratic autonomy leads to policy innovations

Although street-level bureaucrats (SLBs) play a key role in the implementation of market-based instruments (MBIs), their participation is widely understudied. This paper addresses this blind spot by engaging the concept of street-level bureaucratic policy entrepreneurship. Using the case of conservation banking, a market-based environmental policy in the United States, we explore why this novel instrument has only been adopted in a handful of jurisdictions. We examine both non-adoption and adoption of conservation banking to find that SLBs are likely to engage in such entrepreneurial acts when a new policy form is particularly useful in legitimizing regulatory enforcement. Implementing a MBI is, however, not straightforward. Organizational conditions can restrain SLB autonomy to implement MBIs, preferring instead to persist with baseline policies, which further underscores the importance of SLB risk-taking behavior. SLBs must strategically straddle their unique position between the market and the hierarchy to enroll different actors into the new policy arrangement, all within dynamic political-economic conditions.