One of the few robust findings in the public policy literature is that policy dynamics are both a function of stability and volatility. And although most theories of public policy making posit the occurrence of policy junctures as necessary conditions for significant change, studies that set out to unravel the underlying mechanisms of such policy junctures remain relatively rare. This article further develops the idea of policy junctures, commonly hypothesized to initiate significant change, as essentially entailing joint causation. We illustrate the joint and reinforcing nature of forces of change with a case study of bonus regulation. Based on document analysis and a political claim analysis, this article shows that most changes in bonus regulation were of a marginal nature. We argue that the intrinsically attractive nature of performance rewards that a bonus practice entails combined with a sheer lack of alternatives supported by a strong coalition on how to curb risk appetite in financial markets seem to count for the resilience of bonus practices. Theoretically, the case study contributes to theory development on joint causation that causes major policy change. Empirically, it unravels a key mechanism employed by the financial sector to resist reforms: offering an alternative no one can refuse.

Points for practitioners

There is a broad consensus in the policy literature that policy change usually results from multiple forces. We identify this crucial jointly causal nature of policy change and suggest that among the forces of change a strong policy alternative capable of uniting a broad coalition of stakeholders is a necessary condition for policy change. Financial reforms, in particular the practice of bonus payment, are thus not likely to result from tight regulation, but rather from real alternatives on how to reward professional excellence and curb risk appetite.