We present an enriched cognitive approach to the political economy of reform based on the notion of distributed cognition. Our aim is to describe the origination causation of economic reforms highlighting the interactions between people, artefacts as well as internal and external representations. In particular, we ask how reformers are able to turn a cognitively ill-defined situation into a cognitively well-defined situation. The proposed framework, we tentatively call 'the distributed cognitive economics of reform', emphasizes three key messages: First, economic reforms are creative processes largely driven by self-organized innovation and acts of public entrepreneurship. Second, the cognitive distance between individuals both enables and constraints cooperation and, most importantly, learning. Third, reformers' ability to communicate to a wide range of audiences is crucial in times of reform. In consequence, successful reformers often rely on policy metaphors as primary means to manage high levels of uncertainty, complexity and ambiguity. Presenting post-1978 Chinese economic reform as a case study, we argue that the notion of distributed cognition can improve our understanding of economic reform processes.
JEL: B41, B52, P41, Z18Economic agents bring to their actions not just their preferences and endowments, but also their understandings-associations and meanings they have derived from their history of previous actions and experiences. In many of the small, standard problems of economics, we can ignore this. In the larger issues of development and reconstruction, and in constructing an economics for problems of complication and ill-definition, we cannot. We need to take cognition seriously. (Arthur, 2000) Grand reformist plans to straighten out thought, to induce all of us to apply the same normative guidelines across content domains and social context, are fated to run into sharp resistance from ordinary people who insist on thinking, feeling, and acting in seemingly incommensurable ways across spheres of activity and who appear content with ad hoc "compartmentalizing" solutions when conflicts are called to their attention (Tetlock et al., 2004, p. 261).