Policy Design, Instrument Choice, and Policy Feedback Effects of Institutional Business Power: Varieties of Child Care Investments in Australia, Canada, and Germany

ABSTRACT Recent research examining the policy feedback effects of delegated governance note that private actors accumulate institutional business power—distinct from structural and instrumental power typical of businesses—through such mechanisms as delegation, deregulation, and accretion. Business power, once granted by the government, accumulates and institutionalizes over time, even when the state's policy goals may change. In this article, we apply these insights but offer a modified theoretical model that acknowledges the interrelationship of these mechanisms and examines their interaction over time. We draw on the case of early childhood education and care (ECEC) policy in three federal systems—Australia, Canada, and Germany. We develop an original index that maps policy making across the three sub‐national contexts across time to examine the impact of institutionalized private actors of varying status (for‐profit, not‐for‐profit) and power. We argue that regulatory frameworks introduced at the original delegation stage at t1 affect the likelihood of accretion and demonstrate the inter‐relationship between institutional business power and regulatory and governance factors which shape the early years market. Importantly, these accretion dynamics, characterized by increasing market share of for‐profit providers, has the capacity to significantly undermine the social investment logics underpinning government action by constraining access to ECEC services (through high costs), reducing regulations, and thus undermining the quality of ECEC services for parents and children.