This chapter studies the connections between repeated assessments of policy failure, the catalysts of deinstitutionalisation, and subsequent opportunities for system-wide policy learning and reform. Selected evidence from the reform trajectory of Australian health insurance policy from the mid-1970s to late-1990s is used to explore these possible relationships. Here, failure delegitimised health policy institutions, making them increasingly vulnerable and giving them weak learning capacity to reform in anything but a suboptimal way. The result is a cycle of failure and dysfunctional learning. The Australian health insurance case allows one to catalogue at least one pattern of the relationships between policy failure, deinstitutionalisation, and learning. Three core analytical arguments underpin this pattern. First, policy failures create opportunities for learning at a system-wide level, only after institutions have been eroded and exhausted by repeated failure. Second, this first claim holds in both the expert and political inquiry dimensions of policy failure. Third, learning processes are related to the particular sequence of deinstitutionalisation processes; in particular, initial deinstitutionalisation in the expert domain creates the conditions for political learning processes.
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