Uncertainty, ideas, and institutional reform

It has become broadly accepted that causal ideas affect institutional reforms. Now the key question is why such ideas matter. In the literature on ideas, uncertainty is presented as an important precondition for the impact of ideas. This article develops the argument that uncertainty makes causal ideas matter, because the ideas help decision makers manage uncertainty by linking problems to solutions. The more uncertainty about what is at stake and the consequences of different choices decision makers face when deciding on institutional reforms, the more causal ideas shape their choices of new institutional models. The hypothesis is probed in a cross-sectoral (telecommunications and electricity) and cross-national (Great Britain and Germany) analysis of liberalization reforms from 1980 to 2000. The analysis provides some support for the hypothesis, but also calls for its further development.