Performance feedback and policy diffusion: evidence from Chinese city governments subsidizing new energy vehicles

We theoretically develop and quantitatively test the linkage between performance feedback and policy diffusion. Results indicate that cities are less likely to adopt the policy when outperforming their past performance, and the probability increases when lagging behind peers. The asymmetric effects of historical and social performance gaps, larger for former, identify public-private differences in feedback-diffusion nexus. By using performance feedback to explain policy diffusion, our findings enrich the explanatory mechanisms of competition and learning in policy diffusion, and help to bridge public management and policy process literature. Our findings suggest that governments can leverage performance information to facilitate policy diffusion.