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We explore the impact of institutional design on the distribution of changes in outputs of governmental processes in the United States, Belgium, and Denmark. Using comprehensive indicators of governmental actions over several decades, we show that in each country the level of institutional friction increases as we look at processes further along the policy cycle. Assessing multiple policymaking institutions in each country allows us to control for the nature of the policy inputs, as all the institutions we consider cover the full range of social and political issues in the country. We find that all distributions exhibit high kurtosis values, significantly higher than the Normal distribution which would be expected if changes in government attention and activities were proportionate to changes in social inputs. Further, in each country, those institutions that impose higher decision-making costs show progressively higher kurtosis values. The results suggest general patterns that we hypothesize to be related to boundedly rational behavior in a complex social environment.

P olitical institutions translate inputs-in the form of changed preferences, new participants, newinformation, or sudden attention to previously available information-into policy outputs. In the process they impose costs on this translation, and these costs increase institutional friction. We argue that the "friction" in political institutions leads not to consistent "gridlock" but to long periods of stasis interspersed with dramatic policy punctuations. As political institutions add costs to the translation of inputs into outputs, institutional friction will increase, and outputs from the process will become increasingly punctuated overall. We use a stochastic process approach to compare the extent of punctuations among 15 data sets that assess change in U.S. government budgets, in a variety of aspects of the public policy process, in election results, and in stock market returns in the United States. We find that all of these distributions display positive kurtosis-tall central peaks (representing considerable stability) and heavy tails (reflecting the punctuations, both positive and negative). When we order institutions according to the costs they impose on collective action, those with higher decision and transaction costs generate more positive kurtosis. Direct parameter estimates indicate that all distributions except budget data were best fit by the double-exponential probability distribution; budgets are Paretian.

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