A novel research method to detect punctuation and its application to bureaucratic decision-making

Punctuated equilibrium theory (PET) suggests that policy processes experience periods of stability interrupted by dramatic change. Most previous studies have used kurtosis, distribution tests, or change categorization to assess punctuation, but these methods provide limited information. We propose a novel approach that statistically determines the cutoff between small and large changes, assuming small changes follow a normal distribution and large changes follow an exponential distribution. This approach also estimates other parameters describing these distributions. We then compare budgetary decision-making in bureaucratized and non-bureaucratized school districts in New York and Texas. Both types in New York conform to PET, but bureaucratized districts exhibit a higher percentage of punctuations. In Texas, non-bureaucratized districts follow PET, whereas PET is rejected in bureaucratized districts. The wealth of information obtained through the application of our new method enables us to suggest that bureaucratization likely impedes information flows and that poor information flows can manifest in more ways than previously believed, including underreaction followed by overreaction, as well as consistent overreaction.