Can Government Think?

Climate change, fi nancial crises, and other issues of global scale no longer concern only the developed world. The binding power of globalization has placed these challenges at the doorstep of almost every country, testing the evolutionary capacity of monolithic governance systems burdened by institutional legacy and administrative stagnation. This book locates the concept of adaptive governance, used primarily in environmental management, within the context of economic policy. Introducing fl exible economic opportunism, it argues that a particular style of institutional and administrative versatility enables innovative, evidence- based policy development. This book mines institutional economics, public administration, and research theory and practice for complementary elements that can inform an emerging governance paradigm based on fl exible economic opportunism. Through an eclectic suite of cases from the developing and developed worlds, including Asia and North America, this book reveals how patterns of institutional and administrative change impact the effi cacy of public policy. Flexibility may be this century’s most critical dimension of global competitiveness, and systems confi gured to quickly and comprehensively capture economic opportunities will win the mar- ketplace of development ideas. This book advances that discussion.

Kris Hartley is a Singapore-based researcher and consultant focusing on economic development, public policy, and urbanization. With a decade of public and private sector experience, he has consulted on a variety of topics, including earthquake recovery, ﬁ nancial regulation, infrastructure asset management, and nuclear energy policy. Working on solutions with high economic and social impact, Kris is currently conducting research about urban revitalization and water resource management in Singapore and Hong Kong, provincial governance and economic competitiveness in Vietnam, and industrial estate development in Thailand. This page intentionally left blank Can Government Think? Flexible economic opportunism and the pursuit of global competitiveness

Kris Hartley First published 2015 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2015 Kris Hartley The right of Kris Hartley to be identifi ed as author of this work has been asserted by him in accordance with the Copyright, Designs and Patent Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identifi cation and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Hartley, Kris. Can government think? : fl exible economic opportunism and the pursuit of global competitiveness / Kris Hartley. pages cm Includes bibliographical references and index. 1. Economic policy. 2. Economic development—Planning. 3. Institutional economics. 4. Public administration. I. Title. HD87.H367 2015 338.6′048—dc23 2014019285 ISBN: 978-1-138-78275-4 (hbk) ISBN: 978-1-315-74467-4 (ebk)

Typeset in Galliard by Apex CoVantage, LLC Contents

Introduction 1

PART I Institutions

1 Understanding institutions 15 2 Institutions in research and practice 26 3 Institutions and economic development 36 4 Institutions and political power 51 5 Institutions and global urbanization 64

PART II Public administration

6 Contrasting administration paradigms: traditional bureaucracy and collaborative governance 81 7 Emerging administration paradigms: from neoclassical to postmodern 94 8 Local and national administration 108

PART III Evidence-based policy

9 Foundational thinkers in epistemology 123 10 Research methods and empirical validity 134 vi Contents 11 Use of evidence in environmental regulation 144 12 Nationalizing beneﬁ ts and localizing costs in industrial development 161 13 Evidence-based intervention for housing markets 174

Conclusion 189 Bibliography 197 Index 217 Introduction

Government is back, for now. The “great recession” has exposed the weaknesses of a free-market purism that trivializes the role of the state. However, economic cyclicality guarantees that the private sector will eventually regain its swagger – presumably until the next crisis. Political quarrels about public-private balance can be productive but are also increasingly destructive. For example, the American government shutdown of 2013 showed how costly domestic policy stalemates can be, especially when ideological tribalism outshouts evidence. Is there a better way? Can economic policy respond to opportunity by shifting orientation from market to state, and back, without the political noise? Can a new governance model accommodate divergent ideologies without being destructively revolution- ary or rigidly orthodox? Innovative and pragmatic governance has the potential to transcend these costly battles. Interactions among government bodies, institutions, the private sector, and civil society can be structured to avoid slow and even counterproduc- tive policy processes. To that end, this book introduces the concept of fl exible economic opportunism, a governance model for theory and practice that empha- sizes adaptability and pragmatism over ideology and patronage. It advocates timely accommodation of global economic trends, enabled by a structural orientation towards economic competitiveness and policy pragmatism. The model’s fundamental proposition is that supportive institutional and administrative conditions can nurture an environment where evidence guides policy and innovation drives governance. As such, fl exible economic opportunism is not a belief system or a normative philosophy but a systemic architecture that most effi ciently accom- modates the will of the state – as expressed through any number of different political systems – while maximizing competitive potential. Globalization has brought the tug-of-war between market and state to all cor- ners of the world. At the doorstep of any liberalizing economy now lies a Pan- dora’s box of mutually confl icting policy challenges concerning corporate infl uence, social welfare, and ecological sustainability. Narratives that emphasize statist models fi ercely compete against those advocating free markets for the policy attention of governments in both developing and developed countries. Failure of market or state – a recession or a government debt crisis – is often accompanied by a cacophony of interest-driven punditry and pseudo-scientifi c fl imfl am about 2 Introduction which model to embrace. In many cases, alarmed impulsiveness compels governments to jerk the steering wheel left or right to avoid political fallout of further economic damage, resulting in a momentary policy shift towards the subdomi- nant model. However, the new policy may be reversed soon thereafter, often during the next crisis or administration, and the result is a near-permanent state of policy disequilibrium as economic and political cycles rarely overlap. This inces- sant push and pull – resembling a dog watching tennis – destabilizes markets and creates investor uncertainty that in turn magnifi es crises, generating an economi- cally fatal feedback loop. The post-partisan approach of fl exible economic opportunism does not prescribe a universal policy or model. Rather, it establishes the conditions for existing governance structures to adapt more quickly to economic cycles that are becoming shorter and more severe. This pragmatic, reform-minded approach values institutional fl exibility, innovative governance, and a robust focus on evidence. The value of the concept is its neutrality; embracing the spectrum of political and economic systems, it remains silent about seemingly irreconcilable debates over representation, wealth distribution, and the appropriate scope of government authority. Flexible economic opportunism has academic roots in common-pool resource management and institutional economics. Adaptive governance has typically addressed issues such as agricultural sustainability and water scarcity. Flexible economic opportunism imports adaptive governance into administrative design and applies it to a broad range of economic, political, and social issues. The connec- tion between fl exible economic opportunism and adaptive governance rests on the argument that the economic opportunities generated by globalization exhibit some characteristics of a common-pool resource—namely, the diffi culty of exclud- ing users and the zero-sum outcome. For example, many countries have access to borderless consumer markets through globalization, but internal structural constraints often impede the development or implementation of innovative strategies to exploit economic opportunities. Furthermore, countries must compete in a global market for capital that is almost always growing but nonetheless fi nite and subject to wide fl uctuations in price. The competitive environment can therefore be described as a collective “free-for-all,” something to which all parties aspire but fewer succeed. States pursue their own interest within an implicitly coordinated if ineffi cient global capitalist system, generating economic outcomes that benefi t the prepared. Adaptive governance applies to environmental systems that are complex, multi-faceted, and highly sensitive; fl exible economic opportunism is a form of adaptive governance for the rest of society. It manages economic, political, and social uncertainty through governance structures that not only withstand change but leverage it. The concept of fl exible economic opportunism stands on its own foundation as a contribution to the study and practice of governance and public administration. Specifi cally, the model carries its application of adaptive governance towards theoretical frontiers in three ways. First, its models are applicable in a variety of governance environments, from multi-level to central. Adaptive governance largely addresses problems of environmental complexity, uncertainty, and change Introduction 3 within governance structures that are highly fragmented and often informal and weakly institutionalized. Highly centralized governments that lack the fragmenta- tion of more democratized societies must nevertheless cope with emerging global economic forces and may actually be better suited to capture growth opportunities from them. Flexible economic opportunism is therefore more universally applicable because it focuses on restructuring economic policy development processes without regard to incumbent political or social structures. This extends the discussion beyond institutional reform prescriptions and into the realm of evidence-based policymaking and administrative capacity and fl exibility. Second, while the nature of the issues addressed by fl exible economic opportunism and adaptive governance are similar, the critical difference lies in the “laws” governing the operating arena. They are observable and somewhat predictable in one (the natural environment) but often imperceptible and unpredictable in the other (international economic and diplomatic relationships). The rate of change is also greater in the latter, necessitating a rapid fl exibility often labeled “footloose” in reference to private enterprises. This distinction allows fl exible economic opportunism to explore uncharted theoretical space in proposing a new logic for governance strategy and institutional design. In this manner, it argues that governance models should be equipped to manage the paradoxical combination of predictable and irrational behavior found in capital markets, central banks, and diplomatic ministries. Finally, the very terms describing adaptive governance and fl exible economic opportunism underscore their fundamental differences. Adap- tive is reactive. Environmental management prescriptions rightly argue that systems should be sensitive to the emerging impacts of climate change at both the global and the local levels. A tone of preparation and defense fl avors discussions about and applications of adaptive governance principles. In contrast, opportunism is proactive. It surveys the landscape of economic possibilities and fl exibly calibrates strategies based on varying appetites for risk and return, at the individual or governmental level. Flexible economic opportunism is not defensive, and its practitioners would not operate as though hopelessly besieged by uncon- trollable forces such as globalization, climate change, and socio-political transformation. A spirit of self-determinism pervades the model, and this entrepreneurial tone can speak meaningfully to the world’s most successful investors and iconoclastic thinkers. Governments sharing this spirit are not enslaved to philosophies of protective isolationism but liberated by those of measured, prudent economic enterprise. This attitude suits the challenges of managing of rapidly growing economies. In addition to extending the concept of adaptive governance, fl exible economic opportunism is built on a novel application of post-Fordist fl exible specialization, applying the fi rm-level concept to systems for public provision, governance, and management. In academia, fl exible specialization emerged from critiques about post-WWII industrial systems based on mass production and com- modifi cation. The new model emphasized differentiation, adaptive capacity, and institutionalized innovation within fi rms, all hallmarks of fl exible economic opportunism through its embodiment in governance systems. Economic planning initiatives targeting and coordinating these types of industries at the policy 4 Introduction level must be equally fl exible in their own right. Distinctions between adaptive governance and fl exible economic opportunism have methodological implications for how economic policymaking processes are studied, particularly with reference to the ambitions and cognitive processes of leaders, administrators, and collaborators. In an applied sense, this paradigmatic novelty represents an evolution in the strategy of adaptability from defensive to opportunistic, shield to bayonet. While fl exible economic opportunism attempts to make robust, defensible claims about the benefi ts of adaptive economic governance systems, it is careful not to embrace universality. Indeed, the concept of one-size approach is antitheti- cal to the spirit of adaptability. Nevertheless, universality is as alluring to scholars and practitioners as it was for the ancient Greek politicians who came to the Oracle at Delphi for predictions about matters such as the outcomes of military campaigns or the fortunes of commercial ventures. The allure of the Oracle is understandable. Defi nitive answers invite a comfortable resignation to fate. They are also frequently wrong. Indeed, both positive and normative research approaches are beholden to the pursuit of universality. The former assumes an objective and attainable truth; the latter, a “proper” way of using truth to achieve agenda-specifi c outcomes. While recent global political and economic punditry blends these approaches through corkscrew logic and self-evident rhetoric to support ideologies, the chase for silver-bullet answers continues to occupy the world’s most brilliant minds. Yet the global situation seems to be more uncertain and inscrutable than ever, especially with regard to economic, social, and political stability. Has universality failed the realm of governance reform? The most critical aspect of fl exible economic opportunism is its avoidance of a prescriptive tone, eluding the rigidity of theoretical models that claim universality. The fi eld of policy studies continues to wrestle with a variety of philosophical approaches and practical models to address governance failures. The scholarly grist in the mill has yielded many groundbreaking fi ndings, but the lure of appli- cative universality has often cheapened them by understating their context- specifi city or diluting fundamental elements of their conceptual novelty. Research in the fi elds of economics, sociology, and philosophy also occasionally surrenders to the temptation of universality. Such research often produces conclusions that are useful in discrete cases but disjointed in aggregate, as they often incompletely explain the root causes of policy and governance failures. In short, universality and its economic cousin, catch-all neoliberal systemic reform, provide solutions that lack either effi cacy or feasibility. Therefore, the study and practice of policy sciences, like other social sciences, must settle for theoretical gains that are incre- mental and for policy outcomes that are diffi cult to measure and often attributable only to a serendipitous convergence of circumstances in which policymakers have – as often by accident as by design – “gotten it right.” Cases of dumb luck frequently form the basis of studies that are either too contextualized or too general to be of much value and are rarely replicable. Perhaps social science has too often borrowed the wrench of hard science when the problem fails to resemble a bolt. Perhaps universal laws are more appropriate for the medical laboratory than the Introduction 5 urban slum. If social science can be measured by its ability to generate progress in basic human development such as social mobility and poverty alleviation, then the current state of the fi eld bears some much-needed contemplation. Universality is failing because such models neither explain nor predict systems whose origins are incompletely understood. Applications of universality rely to some degree on the assumption that systems share initial characteristics, but in explaining complex social and economic issues this assumption rarely holds. For example, the neoliberal research agenda points to an increase in the overall global standard of living, insisting that comparisons of median wealth to those of the super-elite are irrelevant because a rising tide has lifted all ships. However, the tide, by some measurements, has experienced increasingly wide fl uctuations with a net slackening for a majority of ships. It also harbors lethal environmental patho- gens. Does policy research have the tools to isolate the causes of this problem, and the credibility to peddle sustainable, context-based solutions? In regard to the former, the valuable but controversial research of economists like Thomas Piketty is bringing discussions about the socio-political impact of wealth accumulation out of the academic ivory tower and into the media, government, and living rooms. Nevertheless, the credibility of unorthodox, iconoclastic research has room to develop. Isolated examples of dartboard policymaking informed either by prevailing ideological forces or by falsely urgent circumstantial mandates (e.g., fi scal cliffs) are not a sound basis for the next generation of policy science and economic research. The concept of fl exible economic opportunism, while acknowledging its own limitations, is an attempt to dislodge old patterns of thinking and foment a minor revolution in how government and the academy approach persistent policy challenges regarding governance systems, global markets, and individual economic opportunity. Given the irreplicability of dartboard economic success stories, a comprehen- sive understanding of what constitutes effective policy can emerge only from systematic, disciplined, and ideologically neutral research. The way forward can include either a continuation of the lumpy and incidental “progress” resulting from a cacophony of incompatible scholarly proposals or a radical redefi nition and remediation of the problem based on the diagnostic power of a new model. This book proposes the latter. At its heart, fl exible economic opportunism is predi- cated on the notion that an unpredictable and wildly un-modelable global economy embodies the characteristics of fallible, irrational individuals. This is not intended to highlight the role of organizational psychology and related fi elds, although they have peripheral value in this discussion. This instead is a call to researchers, analysts, public intellectuals, and policymakers to end the counter- productive obsession with universality. Even the most robustly tested economic models often fail to explain or generate anticipated outcomes, with the blame conveniently ascribed to faulty implementation. One universal model cannot sim- ply be replaced with another, and such a strategy would miss the point regardless. This book serves only to support the case that modern governance should reject failed patterns of thinking that have often captivated academia and practice with disappointing results. Flexibility and adaptability are the hearthstone of this 6 Introduction model, not as momentary strategies, but as fundamental characteristics of good governance. Flexible economic opportunism – with or without the label – is emerging as a coherent development model in some government bodies, both local and trans- national in scale. The most illustrative examples are in cities that have endured both external economic shock events and systemic restructuring. Size and diversifi cation do not necessarily defi ne these cases. With large and complex economic bases, cities like New York, Tokyo, and London are predictably fl exible. It is within the world’s “secondary” cities – those that exist in the shadow of their boisterous older siblings – that fl exible economic opportunism can truly be observed while controlling for size and diversifi cation. Cities such as Austin, Bris- bane, and Chongqing are asserting themselves in the global economic environment through creative opportunism liberated from the shackles of administrative rigidity. In short, these players are fast and footloose. However, studying such dimensions of governance is not without challenges. The impacts of innovative policy must be isolated from those of path dependence, situational advantages, or happy accident, especially when considering the (currently) few cases that seem to best exhibit the concept. Many studies document how diversifi ed and fl exible certain urban economies are and abundantly describe their many fortuitous historic turns. However, studying fl exible economic opportunism requires an understanding of how institutions – principally those built and supported by government – have enabled such paths. The approach can therefore be thought of as “planned path dependence,” with multiple forks anticipated and evaluated by broad-reaching and visionary policies. In studying fl exible economic opportunism, it is also useful to typologize cases that have embraced it. For example, the trade-driven cultural exchange in port cities often engenders an outward orientation and open social and economic environment that fosters creativity and network development. Teasing out the policy element of this phenomenon is one challenge con- fronted by this book in its efforts to reveal the critical elements of fl exible economic opportunism. This book is organized along the three fi elds of study that in combination provide theoretical support for fl exible economic opportunism: institutional economics, public administration, and evidence-based policymaking. This ordering funnels breadth of agency: the fi rst of norms defi ning civil society, the second of offi cial- dom, and the third of empirical research and democratization of information. This topical format allows lingering questions about the public-private balance in a post–Washington Consensus world to be visited in the many contexts where governance and society interoperate. It achieves this by situating the discussion of fl exibility among the mutually dependent layers of policymaking and execution whose contributions are each critical to effective economic governance. Institutions are a critical starting point for understanding fl exible economic opportunism. In determining formal and informal norms – often called “the rules of the game” – institutions provide a bedrock context on which theories of public administration and evidence-based policymaking can be enriched. Chapter 1 outlines the defi nition of institutions and their relevance to the concept of Introduction 7 fl exible economic opportunism, their role in generating economic outcomes, their inter-relationships in differing contexts, and their challenges as a unit of analysis. Comparing the contributions of institutional economists such as Ostrom, Coase, and North, this chapter explores the problem of defi nitional ambiguity in conceptualizing institutions and describes how scholars treat institutional func- tions such as market facilitation, actor agency, and policymaking. Both economic and social implications are examined. This chapter continues by critiquing varying issues of concern to institutional economics, including property rights, social con- tracts, and confl icts of interest. It also applies an analytical framework from clas- sical music (Schoenbergian Grundgestalt ) to analyze the historic development of market-facilitating institutions. Transaction cost economics is also applied to institutional studies in a way that underscores the value of fl exible economic opportunism. Chapter 2 begins by comparing institutional analysis methodologies, with a special focus on their application to fl exible economic opportunism. It explores scholarly contributions that illuminate useful approaches for studying institutions and applies some of the more salient concepts to economic growth in Asia’s developing countries. Next, complementarities among several major institutional analytical approaches are identifi ed, including a critique of the logic, methodology, and conceptualization of institutions that underlie each. The contributions of these approaches to fl exible economic opportunism are outlined and provide the basis for later discussions in this book about the broader role of institutions in economic governance. The concept of analytic narratives as a research methodology is then explored through an applied example of international relations between the United States and China. The chapter concludes with a brief exploration of other institutional frameworks, drawing applied comparisons using the governance dynamics of infrastructure development in New Zealand. Themes from this comparison of research methodologies reappear in subsequent chapters and inform the book’s approach to analyzing fl exible economic opportunism. Chapter 3 is the fi rst in a series of three examining the applied dimension of institutions and fl exible economic opportunism through case studies. It fi rst establishes a scholarly context for economic clustering, institutional relationships, and management structures. The chapter then applies theory to explain the development and performance of industrial estates, why clustering occurs where it does, and what accounts for successful economic growth. This includes institutional factors, political priorities, geographical endowments, and social dynamics. The chapter continues with an analysis of actor relationships, focusing on how formal and informal structures facilitate or obstruct clustering; a multiplicity of actors is considered, including social and business networks. Finally, the chapter addresses institutionalized management structures in industrial estates, exploring models of fl exible operational control involving a mix of public and private actors collaborating through partnerships. The illustrative case is an industrial estate in Thailand whose successes and failures present opportunities to examine and evaluate institutional structures within the context of fl exible economic opportunism. 8 Introduction Chapter 4 examines social housing in New Zealand as a stage for institutional dynamics and political power. It begins with a background of the current and projected state of social housing demand in New Zealand and situates emerging challenges in their historic, economic, social, and institutional contexts. Exploring policy evolution, demographics, and urban growth imperatives, this chapter then describes the degree to which challenges are recognized and addressed within a multi-layered and ideologically fragmented governance environment, giving effect to the principles of fl exible economic opportunism outlined in this book. Next, the chapter reviews the strategic priorities of relevant actors, including the national social housing provider and its complicated relationship with both local and central government. The chapter concludes with an analysis of political and operational constraints to policy implementation, with recommendations relating to both urban spatial planning and governance design. Chapter 5 examines the institutional dimension of cities, providing a context for how fl exible economic opportunism can inform policies at sub-national, regional, and local levels of governance. It begins with a brief account of how urban policy has been an instrument of colonial settlement, with examples from ancient Rome, British India, and French Africa. The argument is that urban planning has supported political efforts throughout history and continues to do so, with a modern example being Kabul, Afghanistan. The chapter proceeds by addressing the impact of technological and economic forces on urban transformation, with a focus on the institutional aspects of communications infrastructure and property development. Next, neoliberalism is critiqued for its association with economic inequality in emerging “global” cities. This includes an analysis of theoretical critiques related to urban redevelopment and its socio-spatial implications, underscoring how fl exible economic opportunism, as a tool rather than an ideology, can be used for purposes that do not always serve the greater societal interest. The chapter integrates a broad realm of literature, including institutional economics, urban sociology, and public administration, organized around the forces of globalization and competitiveness, their impacts on social welfare, and the reinterpretation of neoliberal reform movements in Asian cities. Chapter 6 is the fi rst of two chapters outlining the principal concepts of public administration and their relationship to fl exible economic opportunism, a critical exercise in supporting the argument that fl exible economic opportunism is applicable across governance models. This chapter compares two paradigms at oppo- site ends of the democratic continuum. The fi rst of these is traditional public administration, which this chapter explores through the works of Adam Smith and Woodrow Wilson. Dichotomies within the traditional public administration paradigm are examined, including bureaucratic motivation and the politics- administration divide. Next, theories about human behavior and meritocratic governance are briefl y outlined. The fi rst part of this chapter concludes by analyzing debates about traditional public administration, identifying its relevance to economic governance and critiquing how the paradigm has interacted with rival schools of thought. The second part of this chapter examines literature about collaborative management. It begins with a review of salient theories, including Introduction 9 responsiveness, partnership, and managerial practice. The chapter continues with a critique and identifi es potential conceptual directions. It concludes with a comparative analysis of both paradigms, deriving theoretical insights from their contrasts that enhance the understanding of fl exible economic opportunism. Chapter 7 outlines, critiques, and compares three salient public administration paradigms that exhibit characteristics of larger social and economic movements. The fi rst section explores New Public Management, describing its characteristics, reform frameworks, and relevance to fl exible economic opportunism. The chapter continues with an examination of International Public Management, outlining its traits and establishing its conceptual distinction from New Public Management. Identifying the role of International Public Manage- ment in globalization, this chapter describes the emergence of private sector and non-government actors in global governance processes. The chapter then examines Postmodern Public Administration, its inherent logic, and its conceptual and methodological themes including individualism and power relations. This chapter concludes, as did the previous, by comparing paradigms and anticipat- ing future trends. With the previous chapters having established the critical link between fl exible economic opportunism and public administration, Chapter 8 examines a group of cases illustrating the complexity of conceptualizing and implementing public administration paradigms. The fi rst part examines the local context. Cases include an industrial estate development in Thailand where a bureaucratic administrative structure is used to manage pollution, a community redevelopment initiative in California that involves government and grassroots advocacy groups, and a collaborative crisis management program for New Zealand’s earthquake recovery effort. Each is treated in a way that highlights characteristics of fl exible economic opportunism proposed in this book. The second part of the chapter focuses on national-level economic development, examining how market-enabling administration paradigms have been adapted to accommodate contextual variations and support developmental objectives in Taiwan, Japan, China, and Myanmar. Each case embodies a specifi c paradigm, and a summary section derives common lessons for fl exible economic opportunism. Chapter 9, the fi rst of fi ve examining evidence-based policy, establishes a theoretical foundation to identify the critical role of research and creation of new knowledge to fl exible economic opportunism. It begins by outlining the contributions of major epistemological thinkers on issues including positive and normative economic research, application of research methodologies, the value of economic models, and interactive epistemology. The chapter then traces the development of economic research through the twentieth century and concludes with critiques about epistemic approaches and their application to modern research topics and challenges. The second part of the chapter addresses research design, including the bridge between theoretical and practical elements. It also describes the fundamental characteristics of quantitative and qualitative research, reviewing debates about their comparative usefulness in both isolation and combination. This chapter concludes by underscoring the importance of contextual familiarity and the benefi ts 10 Introduction of using mixed-methods research approaches to the type of evidence-based policymaking that informs fl exible economic opportunism. Chapter 10 synthesizes a variety of approaches to research methods and examines measures to ensure the legitimacy and defensibility of empirical claims. It describes three salient issues in research methods – model design, variable selec- tion, and interpretation – and examines each through a comparative analysis of how selected authors treat them. The chapter continues with a general critique of two methods in practice: Belich’s study of frontier development and Bound and Solon’s study of monozygotic twins. The second part of the chapter focuses on methods to address empirical validity and reliability, including testing and verifi cation. The chapter concludes with a brief illustration of validity and reliability issues in comparative research about Thailand and Indonesia. The fi rst of three remaining chapters addressing the applied use of evidence and research in policymaking, Chapter 11 begins with an elementary description of the technical aspects of hydraulic fracturing (fracking), including a brief history, evolution of mechanical techniques, geographical patterns of practice, and anticipated developments. Next, it outlines common debates about fracking, including environmental and public health concerns such as water table and surface con- tamination, air quality reduction, and waste management. This chapter concludes with an analysis of evidence-based fracking policy development, including an overview of various approaches around the world, the infl uence of public action on fracking policy, a comparative analysis from the United States and New Zea- land, and a synthesis of lessons with broader energy policy relevance. The fi ndings illustrate the aspects of evidence-based policymaking that can be broadly applied to issues of economic development. Chapter 12 examines how economic research and associated practical knowledge can inform industrial management systems and development policies with a focus on fl exible economic opportunism. This chapter argues that the socio-spatial imbalance of benefi ts and costs resulting from industrial growth in many developing countries is not adequately remediated by either the private or the public sector, constituting a tripartite failure of market, government, and information. It is at the intersection of these three that fl exible economic opportunism makes its principal contribution. The chapter describes specifi c failures relevant to the case of Thailand industrial estates and describes how research can both explain and help remediate these failures. It concludes with policy recommendations based on evidence and best practices. Chapter 13 examines housing affordability, with a focus on institutional expla- nations and policy interventions. It exhibits how fl exible economic opportunism is a concept applicable not only to external opportunities but to domestic policy challenges. The chapter fi rst reviews inclusionary zoning from a market failure perspective, identifying the prevalence of free-market strategies in innovative intervention models. Next, the chapter examines public housing as a merit good, tracing the rise and demise of affordability programs and analyzing policy changes that refl ect political sensitivity and institutional change. Examples from the United States, Singapore, and Hong Kong are compared. The chapter continues with a Introduction 11 study of housing subsidies in America and advocates for institutional and regula- tory reform in the mortgage market. The chapter concludes with several policy recommendations that relate to institutional reform and fl exible governance, arguing that nationalizing the brokerage industry is crucial for fi nancial sector stability and housing market recovery. This chapter exhibits the potential of fl exible economic opportunism to respond to market failures as well as global forces. Synthesizing the salient points of the book, the conclusion focuses on how adaptable institutional design and public administration create an environment where innovative capacity and evidence-based policymaking enhance a country’s global competitiveness. Introducing the concept of a constraint theory of governance, the conclusion argues that fl exible economic opportunism is the vehicle through which this process is actualized. It proposes a systematic structure for conceptualizing fl exible economic opportunism and focuses in detail on how institutional, administrative, and empirical dimensions are operationalized. Situat- ing the book’s claims within the context of current global economic, political, and social trends, the conclusion draws to a close by calling for more assertive reform action from government, society, and academia. This book aims to contribute to the continuing dialogue among scholars, practitioners, and students about the effi cacy of economic governance models, methods of analyzing them, and innovative and productive approaches to reforming them. This book also expects to generate a new dialogue about post-partisan governance systems focusing on institutional adaptability, administrative pragmatism, and evidence-based policymaking. It presents fl exible economic opportunism as an illuminative but accessible model through which to interpret the complexity of public-private interaction and situates governance challenges within the context of transformative and often disruptive social, economic, and information revolutions. Universality is not the solution. This book seeks to reframe the debate and shift the paradigm from absolutism to fl exibility. The fi ttest may sur- vive, but only during the moment that circumstances value a unique combination of characteristics. It is the most adaptable that position themselves for sustainable success. Flexible economic opportunism embraces this logic in a way that applies to the current multiplicity of political and economic structures. Flexible economic opportunism represents a broader way of conceptualizing creative and pragmatic economic governance, a topic that is unjustifi ably overlooked and incompletely implemented due perhaps to its theoretical obscurity, empirical ambiguity, and cross-disciplinary challenges. This book aims to address all three in a manner that is contributory but by no means defi nitive. Indeed, this work marks the beginning of a larger research program to understand and improve local and national governance for the new global economy.

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