Purposeful Policy Leakage

Researchers, theorists, and officials commonly recognize instances of “policy leakage,” the gap between a stated rule and enactment of that rule. Causes for these discrepancies have been theorized and behaviorally observed. Existing schema, working from the perspective of subjects, acknowledge strategic and purposeful instances of non-compliance with stated rules. However, rule non-enforcement is overwhelmingly treated as a failure endemic to organizational arrangements, or an incapacity borne of coordination problems or prohibitive cost. These explanatory approaches are as-yet incomplete because they do not account for cases in which coordinated and purposeful non-enforcement occurs. Under certain conditions, the level of purposeful non-enforcement can strategically fall below the level of compliance, which we term “purposeful policy leakage.” In this paper, we describe a case of purposeful policy leakage: the Shanghai automotive license regime, in which violations of an auction-based allocative rule are strategically permitted by policy planners despite viable enforcement alternatives. We defend the reasonability of the strategy in this case, then consider generically the limitations of purposeful policy leakage against other governing strategies.