ABSTRACT
In the run-up to an election, governments will follow a reflationary policy, but after being re-elected they will adopt a deflationary approach. First-order change occurs when the levels of the basic instruments of policy are altered. Second-order change is denoted when the instruments of policy as well as their settings are altered in response to past experience. Both first-order and second-order changes keep the existing policy paradigm, despite occasional modifications in the instruments. A debate opened in policymaking circles as to whether the government should adopt a different monetary target or abandon monetarism altogether. The abandonment of the exchange-rate mechanism commitment after just two years was a humiliating exercise in policy-making, and a case can clearly be made that the recovery UK economy has undergone since 1993 has come about largely by chance rather than design. Social learning is a relatively new concept, but one which social scientists should be encouraged to use to complement rather than replace policy transfer.
