Positive Returns and Equilibrium: Simultaneous Feedback between Public Opinion and Social Policy

This paper attempts to theoretically define and empirically model what scholars have long argued: that public opinion and social policy are part of a reciprocally causal feedback loop. The theory and methods of this paper draw on institutional theory in general, and the thermostatic and increasing returns models specifically, to describe opinion and policy linkages. Previous empirical research based on these theories usually models unidirectional processes. Research considering endogeneity resulting from reciprocal causality is scarce, and entirely absent from opinion-policy research are models of simultaneous feedback in a stable system. This paper argues that equilibrium exists despite punctuations and cycles that characterize reciprocal feedback. It then tests the plausibility of a stable reciprocally causal system using ISSP surveys, OECD social spending data and Scruggs decommodification measures. Construction of a general system theory of opinion-policy that applies across democratic welfare states remains a daunting task but this paper moves researchers closer by shedding theoretical, methodological and empirical light on the many challenges in modelling simultaneous feedback and identifying equilibrium. It concludes that Paul Pierson’s theoretical description of increasing returns in the historical expansion of welfare states can be re-labeled positive returns to apply to both expansion and retrenchment as in recent neoliberal shifts.