Adapting by Learning

Adaptive capacity is essential for any human social system, because human societies are full of unique circumstances, genuine uncertainty, novel complexity, structural instabilities, and conflicts of values and interests, and, more important, the environment under which the systems exist is always changing, while everyone, including policy makers and policy experts, operates under conditions of “bounded rationality.” Learning is the base of adaptive capacity. The first section of the article distinguishes four learning models by their location along two dimensions: the promoters of learning (policy makers or policy advocates) and the sources of learning (practical experience or controlled experiments). By studying the evolution of health care financing in rural China over the past 60 years, the remaining five sections attempt to illustrate how policy makers react to newly emerging problems, imbalances, and difficulties by “fine-tuning” or altering policy instruments, or adopting a new goal hierarchy according to lessons drawn from past and present experience as well as deliberate policy experiments. The resilience of the Chinese system lies in its deep-seated one-size-does-not-fit-all pragmatism.