Changing Course
| Author | Ian Roberge |
| Published date | 01 July 2009 |
| Date | 01 July 2009 |
| DOI | http://doi.org/10.1177/0952076709103811 |
| Subject Matter | Articles |
© The Author(s), 2009.
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0952-0767
200907 24(3) 265–279
Changing Course
Policy Reversals, Terrorist Financing and Title III of the
USA Patriot Act
Ian Roberge
York University, Canada
Abstract
Policy reversals represent a particular type of policy change. Reversals refer
specifically to instances when a policy is adopted or discontinued despite
previously adopted positions. In cases of reversals, decision makers have
reassessed their core values usually because of substantive events in the
policy parameter. Although reversals represent a stark redirection, they could
not take place without prior institutionalization in the field. We use Title III of
the Patriot Act, which deals among other things with money laundering and
terrorist financing, to illustrate our point.
Keywords
institutionalization, internationalization, money laundering, policy reversals,
terrorist financing, USA Patriot Act
At the turn of the millennium, the issue of counter money laundering and terrorist
financing policies appeared moribund. Due to the events of 11 September 2001,
the field gained in prominence and became the focus of policy makers, academics,
the media and the public in general. Although the government of the USA had
been interested in tackling organized crime through the predicate offence of
money laundering for years, mostly to combat the drug trade, its interest in counter
terrorist financing policy is much more recently the result of its conflict with al
Qaeda. Within a month of the strikes, President Bush opened the ‘war on terror’ by
asking members of the international community to seize and freeze assets of
terrorists, a measure that yielded US$124m in just two years of efforts (Ehrenfeld,
2003). The financial services sector was the first salvo in combating terrorism.
Shortly thereafter, the American Congress adopted the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
DOI: 10.1177/0952076709103811
Ian Roberge, Department of Political Science (YH 341), Glendon College, York University,
2275 Bayview Avenue, Toronto, Ontario, Canada, M4N 3M6. [email: IRoberge@glendon.yorku.ca]
265
Public Policy and Administration 24(3)
Terrorism (USA Patriot Act) in October 2001. Title III (the International Money
Laundering Abatement and Anti-Terrorist Financing Act) contained a number of
measures to counter illicit finance. The Patriot Act as a whole and Title III more
specifically were quickly adopted with very little public debate.
In this article, we understand Title III of the Patriot Act to be a policy reversal
for many actors in the policy community, especially for Republican lawmakers.
Reversals represent a specific type of policy change, referring to instances when a
policy is adopted or annulled despite prior positions. Many of the regulations of
Title III had been presented and debated previously, but they had failed to be
adopted. Republican policy makers generally opposed stringent requirements
based on concerns of economic competitiveness and privacy rights. As the ‘war on
terror’ was launched, many reticent politicians suddenly became anti-dirty money
crusaders. The financial services sector which for its part had long opposed strin-
gent anti-money laundering measures was given little choice but to accept the
many and costly requirements suddenly found in law so as not to be perceived a
weak link in fighting terrorism. An important change in the policy parameter
allowed for the adoption of a policy, Title III of the Patriot Act, in a field that
previously appeared stagnant.
How have anti-money laundering and terrorist financing policies previously
perceived as overwhelming, or at the very least contentious, by a large section
of the policy community, suddenly become acceptable to those same actors?
Drawing from diverse public policy theories, especially the advocacy coalition
framework (Sabatier and Jenkins-Smith, 1993), we suggest in this article that
reversals occur when decision makers re-evaluate their core values normally as a
result of a major change in the policy environment. Though reversals represent an
important shift, they also reflect some level of prior institutionalization. As it
pertains to Title III of the Patriot Act, we make two observations. First, strong
counter money-laundering policy in the United States largely results from the
events of 11 September 2001. In itself, this is not a controversial claim. However,
we add that the adoption of the policy was possible because the ‘war on terror’
shifted the debate away from financial and privacy considerations to that of
national security. Republican policy makers generally opposed to counter money
laundering policies could now support them with enthusiasm. Second, though the
measures put forward were important, they were not new since they had been
heavily debated nationally and internationally in the previous decade. The govern-
ment and industry players were not able to resist a long-term shift towards more
forceful anti-money laundering and terrorist financing regulation. The case study
is useful in allowing for a breakdown of the different parts of the reversal process.
We start with a discussion on the concept of policy reversals prior to moving on
to a more thorough discussion of our case study. This article is the result of the
analysis of the many available public documents, and the large literature that
already exists in this policy field.
266
Roberge: Policy Reversals, Terrorist Financing and Title III of the USA Patriot Act
Explaining Policy Reversals
Over recent years, the public policy literature has increasingly focused on explain-
ing policy changes. Policy reversals, however, represent more than a change or a
shift in policy; they reflect an about face by decision makers in regards to the
appropriate measures to be undertaken. Policy reversals can, thus, be conceptual-
ized as instances when a policy is adopted or discontinued despite previous
choices. When we speak of policy reversals, we are not speaking about the arrival
of a new government in power reversing the policy of its predecessor. Rather, we
are referring to the same actors suddenly favoring a policy that they had previous-
ly decried, or opposing a policy that they had previously supported. It should be
noted that reversals can take place when a new policy is adopted as well as when
an old policy is taken off the books. Although reversals are unusual, they clearly
take place across states and policy fields.
We can identify reversals by focusing on critical junctures in the history of a
policy (Thelen, 1999). Baumgartner and Jones (1993) describe policy making in
the USA as resulting from punctuated equilibriums, which refer to long periods of
stability followed by abrupt change. It is this period of abrupt change, or critical
juncture that is most interesting when studying public policy. Yet, the difficulty
lies less in identifying critical junctures and reversals than in providing a useful
explanation for them. We should immediately note that for a reversal to take place,
it requires a critical juncture. However, critical junctures do not automatically lead
to reversals. Governments could in fact reaffirm, modify at the margin, or make
larger changes than expected at the time of a critical juncture; they will not
necessarily completely review their currently held position. As we suggest in this
article, the new equilibrium, a result of the reversal, is best explained in terms of a
change in the core values of decision makers. Changes in core values in turn can
only really be explained as resulting from a substantive transformation in the
policy environment. Despite these transformations in policy parameters, policies
cannot be dis-embedded entirely from their legacy. We explain each of these
elements in turn below.
Reversals are explained when the core values of decision makers can be said to
have shifted. In the advocacy coalition framework (Sabatier and Jenkins-Smith,
1993), policy comes about through debates in policy sub-systems. Sub-systems
are created around a particular issue and facilitate debates across coalitions. The
coalitions, in turn, are identifiable by their distinct belief system (a normative
core), policy proposals (a near core), and preferred policy instruments (secondary
aspects). It is generally assumed that the normative core of a coalition is
immutable, and that policy comes about through negotiations around the near core
and the secondary aspects. We suggest that reversals reflect, in fact, a change in
the coalition’s normative core. In theory, reversals could be explained through a
change in power in or across coalitions. Although in certain circumstances this
could be a convincing argument, it is not the case when thinking about the Patriot
267
Public Policy and Administration 24(3)
Act. It is well known that many key players in the Bush administration opposed
stringent measures against money laundering and terrorist financing prior to 11
September 2001. Already at their post, senior decision makers such as Secretary of
the Treasury Paul O’Neil and Larry Lindsey, economic advisor to the President,
publicly questioned the previous administration’s focus on illicit finance. There
was in this case no change in the power structure of the coalition. Yet, the same
actors became ardent proponents of measures against illicit finance when the
policy environment in which they were operating suddenly was transformed. As a
result...
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