New institutionalism

New institutionalism or neo-institutionalism is an approach to the study of institutions that focuses on the constraining and enabling effects of formal and informal rules on the behavior of individuals and groups.[1]

New institutionalism originated in work by sociologist John Meyer published in 1977.[2]

History

The study of institutions and their interactions has been a focus of academic research for many years. In the late 19th and early 20th century, social theorists began to systematize this body of literature. One of the most prominent examples of this was the work of German economist and social theorist Max Weber; Weber focused on the organizational structure (i.e. bureaucracy) within society, and the institutionalization created by means of the iron cage which organizational bureaucracies create. In Britain and the United States, the study of political institutions dominated political science until the 1950s. This approach, sometimes called 'old' institutionalism, focused on analyzing the formal institutions of government and the state in comparative perspective. It was followed by a behavioral revolution which brought new perspectives to analyzing politics, such as positivism, rational choice theory, and behavioralism, and the narrow focus on institutions was discarded as the focus moved to analyzing individuals rather than the institutions which surrounded them.[3] New Institutionalism was a reaction to the behavioral revolution.[3]

Institutionalism experienced a significant revival in 1977 with an influential paper published by John W. Meyer of Stanford University and his Ph.D. student at the time, Brian Rowan.[4] The revised formulation of institutionalism proposed in this paper prompted a significant shift in the way institutional analysis was conducted. Research that followed became known as "new" institutionalism, a concept that is generally referred to as "neo-institutionalism" in academic literature.

Another significant reformulation occurred in the early 1980s when Paul DiMaggio and Walter W. Powell consciously revisited Weber's iron cage.[5] The following decade saw an explosion of literature on the topic across many disciplines, including those outside of the social sciences. Examples of the body of work in the decade which followed can be found in DiMaggio and Powell's 1991 anthology in the field of sociology; in economics, the Nobel Prize-winning work of Douglass North is a noted example.

Kathleen Thelen and Sven Steinmo contrast New Institutionalism with "Old Institutionalism", which was overwhelmingly focused on detailed narratives of institutions, with little focus on comparative analyses. Thus, the Old Institutionalism was unhelpful for comparative research and explanatory theory. This "Old Institutionalism" began to be undermined when scholars increasingly highlighted how the formal rules and administrative structures of institutions were not accurately describing the behavior of actors and policy outcomes.[6]

More-recent work has begun to emphasize multiple competing logics,[7][8] focusing on the more-heterogeneous sources of diversity within fields[8] and the institutional embeddedness of technical considerations.[9][10] The concept of logic generally refers to broader cultural beliefs and rules that structure cognition and guide decision-making in a field. At the organization level, logic can focus the attention of key decision-makers on a delimited set of issues and solutions,[11] leading to logic-consistent decisions that reinforce extant organizational identities and strategies.[12] In line with the new institutionalism, social rule system theory stresses that particular institutions and their organizational instantiations are deeply embedded in cultural, social, and political environments and that particular structures and practices are often reflections of as well as responses to rules, laws, conventions, paradigms built into the wider environment.[13]

Diversity of scholarship

Numerous scholarly approaches have been described as being part of New institutionalism.[3]

Normative institutionalism

Much of the introduction of this article relates to a normative view, sometimes seen as the "original" new institutionalism. Normative institutionalism is a sociological interpretation of institutions and holds that a "logic of appropriateness" guides the behavior of actors within an institution. It predicts that the norms and formal rules of institutions will shape the actions of those acting within them. According to James March,[14] the logic of appropriateness means that actions are "matched to situations by means of rules organized into identities." Thus normative institutionalism views that much of the behavior of institutional actors is based on the recognized situation that the actors encounter, the identity of the actors in the situation, and the analysis by the actor of the rules that generally govern behavior for that actor in that particular situation.

Rational choice institutionalism
Main article: Rational choice institutionalism

This approach contrasts with normative institutionalism: rather than a series of calculated actions designed to maximize perceived benefit, any given actor within an institution will feel constrained and obligated by the norms and rules of the institution.

Rational choice institutionalism draws heavily from rational choice theory but is not identical to it. Proponents argue that political actors' rational choices are constrained (called "bounded rationality"). These bounds are accepted as individuals realize their goals can be best achieved through institutions. In other words, institutions are systems of rules and inducements to behavior in which individuals attempt to maximize their own benefit.

Historical institutionalism
Main article: Historical institutionalism

This version of institutionalism states that "history matters".[15] Paths chosen or designed early in the existence of an institution tend to be followed throughout the institution's development. Institutions will have an inherent agenda based on the pattern of development, both informal (the way things are generally done) and formal (laws, rule sets and institutional interaction).

A key concept is path dependency: the historical track of a given institution or political entity will result in almost inevitable occurrences. In some institutions, this may be a self-perpetuating cycle: actions of one type beget further actions of this type.

This theory does not hold that institutional paths will forever be inevitable. Critical junctures may allow rapid change at a time of great crisis.

Sociological institutionalism

Sociological institutionalism is a form of new institutionalism that concerns "the way in which institutions create meaning for individuals, providing important theoretical building blocks for normative institutionalism within political science".[16] Some sociological institutionalists argue that institutions have developed to become similar (showing an isomorphism) across organizations even though they evolved in different ways.[17][18]

According to prominent organisational sociologist Richard Scott, "Compliance occurs in many circumstances because other types of behavior are inconceivable; routines are followed because they are taken for granted as 'the way we do these things'" (p. 57)[19] —also called social institutionalism.[20] Individuals make certain choices or perform certain actions not because they fear punishment or attempt to conform; neither do they do so because an action is appropriate or the individual feels some sort of social obligation. Instead, the cognitive element of new institutionalism suggests that individuals make certain choices because they can conceive of no alternative.

New Institutional Economics
Main article: New Institutional Economics

It is an economic perspective that attempts to extend economics by focusing on the institutions (that is to say the social and legal norms and rules) that underlie economic activity and with analysis beyond earlier institutional economics and neoclassical economics. It can be seen as a broadening step to include aspects excluded in neoclassical economics. It rediscovers aspects of classical political economy. Major scholars associated with the subject include Masahiko Aoki, Armen Alchian, Harold Demsetz,[21][22] Steven N. S. Cheung,[23][24] Avner Greif, Yoram Barzel, Claude Ménard (economist), Daron Acemoglu, and four Nobel laureates—Ronald Coase,[25][26] Douglass North,[27][28] Elinor Ostrom,[29] and Oliver Williamson.[30][31][32] A convergence of such researchers resulted in founding the Society for Institutional & Organizational Economics (formerly the International Society for New Institutional Economics) in 1997.

Discursive institutionalism

Proponents of discursive institutionalism, such as Vivien Schmidt, emphasize how ideas and discourses affect institutional stability and change.[33][34]

Constructivist institutionalism

Constructivist institutionalists[35] assert that political, social, or policy discourses can perform communicative functions: actors publicly expressing ideas can lead to social change, or coordinating functions. Thus ideas and meaning provide a mechanism for multiple actors to achieve consensus on norms and values and thus create social change.[36] This is increasingly moving beyond political science and into international relations theory and foreign policy analysis.[37][38]

Feminist institutionalism

Feminist institutionalism is a new institutionalist approach which looks at "how gender norms operate within institutions and how institutional processes construct and maintain gender power dynamics".[16]

See also

References
  1. DiMaggio, Paul (1998). "The New Institutionalisms : Avenues of Collaboration". Journal of Institutional and Theoretical Economics (JITE). 154 (4): 696–705. ISSN 0932-4569. JSTOR 40752104.
  2. Powell, Walter W.; DiMaggio, Paul J. (1991). The New Institutionalism in Organizational Analysis. University of Chicago Press. ISBN 978-0-226-67709-5.
  3. Adcock, Robert Bevir, Mark Stimson, Shannon C. (2007). Modern political science : Anglo-American exchanges since 1880. Princeton University Press. ISBN 978-0-691-12873-3. OCLC 475415787.CS1 maint: multiple names: authors list (link)
  4. Meyer & Rowan 1977.
  5. DiMaggio & Powell 1983, pp. 147–60.
  6. "Structuring politics historical institutionalism comparative analysis". Cambridge University Press. 1992. p. 3–4. Retrieved 2020-02-29.
  7. Friedland & Alford 1991.
  8. Lounsbury 2001.
  9. Scott et al. 2000.
  10. Thornton 2004.
  11. Ocasio 1997.
  12. Thornton 2002.
  13. Powell 2007.
  14. March, James G. (1994), Primer on Decision Making: How Decisions Happen, Free Press, pp. 57–58.
  15. Wolff, Sarah; Wichmann, Nicole; Mounier, Gregory (2009), The external dimension of justice and home affairs: A different security agenda for the EU?, pp. 9–23.
  16. Lowndes, Vivien (2010), "The Institutional Approach", in Marsh, D.; Stoker, G. (eds.), Theories and Methods in Political Science, Basingstoke: Palgrave, p. 65
  17. DiMaggio & Powell 1991.
  18. Meyer, John W.; Rowan, Brian (1977). "Institutionalized Organizations: Formal Structure as Myth and Ceremony". American Journal of Sociology. 83 (2): 340–363. doi:10.1086/226550. ISSN 0002-9602. JSTOR 2778293.
  19. Scott, Richard W. (2014). Institutions and organizations : ideas, interests and identities. Sage. ISBN 978-1-45224222-4. OCLC 945411429.
  20. Schmidt, V.A. (2010), Taking ideas and discourse seriously: explaining change through discursive institutionalism as the fourth 'new institutionalism'.
  21. Harold Demsetz (1967). "Toward a Theory of Property Rights," American Economic Review, 57(2), pp. 347-359.
  22. Harold Demsetz (1969) "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, 12(1), pp. .
  23. Steven N. S. Cheung (1970). "The Structure of a Contract and the Theory of a Non-Exclusive Resource," Journal of Law and Economics, 13(1), pp. 49-70.
  24. S. N. S. Cheung (1973). "The Fable of the Bees: An Economic Investigation," Journal of Law and Economics, 16(1), pp. 11-33.
  25. Ronald Coase (1998). "The New Institutional Economics," American Economic Review, 88(2), pp. 72-74.
  26. R. H. Coase (1991). "The Institutional Structure of Production," Nobel Prize Lecture PDF, reprinted in 1992, American Economic Review, 82(4), pp. 713-719.
  27. Douglass C. North (1990). Institutions, Institutional Change and Economic Performance, Cambridge University Press.
  28. Douglass C. North (1995). "The New Institutional Economics and Third World Development," in The New Institutional Economics and Third World Development, J. Harriss, J. Hunter, and C. M. Lewis, ed., pp. 17-26.
  29. Elinor Ostrom (2005). "Doing Institutional Analysis: Digging Deeper than Markets and Hierarchies," Handbook of New Institutional Economics, C. Ménard and M. Shirley, eds. Handbook of New Institutional Economics, pp. 819-848. Springer.
  30. Oliver E. Williamson (2000). "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, 38(3), pp. 595-613 Archived May 11, 2011, at the Wayback Machine (press +).Dzionek-Kozłowska, Joanna; Matera, Rafał (October 2015). "New Institutional Economics' Perspective on Wealth and Poverty of Nations. Concise Review and General Remarks on Acemoglu and Robinson's Concept". Annals of the Alexandru Ioan Cuza University - Economics. 62 (1): 11–18. doi:10.1515/aicue-2015-0032.
  31. Keefer, Philip; Knack, Stephen (2005). "Social capital, social norms and the New Institutional Economics". Handbook of New Institutional Economics. pp. 700–725.
  32. "Introductory Reading List: New Institutional Economics". Ronald Coase Institute.
  33. Schmidt, Vivien A. (2008). "Discursive Institutionalism: The Explanatory Power of Ideas and Discourse". Annual Review of Political Science. 11 (1): 303–326. doi:10.1146/annurev.polisci.11.060606.135342. ISSN 1094-2939.
  34. Schmidt, Vivien A. (2010). "Taking ideas and discourse seriously: explaining change through discursive institutionalism as the fourth 'new institutionalism'". European Political Science Review. 2 (1): 1–25. doi:10.1017/S175577390999021X. ISSN 1755-7747.
  35. Hay, Colin (2006). "Constructivist institutionalism". In Rhodes, R.A.W.; Binder, Sarah A.; Rockman, Bert A. (eds.). The Oxford Handbook of Political Institutions. Oxford: Oxford University Press. pp. 56–74. ISBN 978-0-19-954846-0.
  36. Dodds, Anneliese (2013), Comparative Public Policy, Palgrave MacMillan.
  37. Hassan, Oz (10 Sep 2012), Constructing America's freedom agenda for the Middle East, Studies in US Foreign Policy, Routledge, ISBN 978-0-41560310-2.
  38. Hassan, Oz (2010-06-14), "Constructing Crises, (in)securitising terror: the punctuated evolution of EU counter terrorism policy", European Security, Taylor & Francis, 19 (3: European ‘security’ governance): 445–66, doi:10.1080/09662839.2010.526935, S2CID 153658871.

Bibliography and further reading
  • Berger, Peter L.; Luckmann (1966), The Social Construction of Reality, New York: Doubleday.
  • Chappell, Louise (June 2006). "Comparing political institutions: revealing the gendered 'logic of appropriateness'". Politics & Gender. 2 (2): 223–35. doi:10.1017/S1743923X06221044.
  • DiMaggio, Paul J.; Powell, Walter W. (April 1983). "The iron cage revisited: institutional isomorphism and collective rationality in organizational fields". American Sociological Review. 48 (2): 147–60. doi:10.2307/2095101. JSTOR 2095101.
  • ———; Powell, Walter W., eds. (1991), The New Institutionalism in Organizational Analysis, Chicago: University of Chicago Press, pp. 1–38.
  • Friedland, Roger; Alford, Robert R. (1991). Powell, Walter W.; DiMaggio, Paul J. (eds.). "Bringing Society Back In: Symbols, Practices, and Institutional Contradictions". The New Institutionalism in Organizational Analysis: 232–63.
  • Jepperson, Ronald L. (1991), "Institutions, Institutional Effects, and Institutionalism", in Powell, Walter W.; DiMaggio, Paul J (eds.), The New Institutionalism in Organizational Analysis, Chicago: University of Chicago Press, pp. 143–63.
  • Krücken, Georg; Drori, Gili S., eds. (2009), World Society: The Writings of John W. Meyer, Oxford: University Press, ISBN 9780199593439.
  • Krücken, Georg; Mazza, Carmelo; Meyer, Renate; Walgenbach, Peter, eds. (2017), New Themes in Institutional Analysis. Topics and Issues from European Research, Cheltenham: Edward Elgar, ISBN 9781784716868.
  • Lounsbury, Michael (2001). "Institutional Sources of Practice Variation: Staffing College and University Recycling Programs". Administrative Science Quarterly. 46 (1): 29–56. doi:10.2307/2667124. JSTOR 2667124. S2CID 145613530.
  • ——— (April 2007). "A tale of two cities: competing logics and practice variation in the professionalizing of mutual funds". Academy of Management Journal. 50 (2): 289–307. doi:10.5465/AMJ.2007.24634436. S2CID 67820131.
  • March, James G.; Olsen, Johan P. (1989). Rediscovering Institutions. The Organizational Basis of Politics. New York: The Free Press (also Italian, Japanese, Polish and Spanish (Mexico) editions).
  • Meyer, Heinz-Dieter and Brian Rowan, 2006. The New Institutionalism in Education. Albany, NY: SUNY Press.
  • Meyer, John W.; Rowan, Brian (1991), "Institutionalized Organizations: Formal Structure as Myth and Ceremony", in Powell, W.; DiMaggio, P. (eds.), The New Institutionalism in Organizational Analysis, Chicago, IL: University of Chicago Press.
  • ———; Rowan, Brian (September 1977). "Institutionalized organizations: formal structure as myth and ceremony". American Journal of Sociology. 83 (2): 340–63. doi:10.1086/226550. JSTOR 2778293.
  • Nicita, Antonio; Vatiero, Massimiliano (July 2007). "The contract and the market: towards a broader notion of transaction?" (PDF). Studi e Note di Economia. 12 (1): 7–22. doi:10.2139/ssrn.2473437. S2CID 166964883. Archived from the original (PDF) on 2011-09-27.
  • Ocasio, William (July 1997). "Towards An Attention‐Based View of The Firm". Strategic Management Journal. 18 (S1): 187–206. doi:10.1002/(sici)1097-0266(199707)18:1+<187::aid-smj936>3.3.co;2-b. ISSN 0143-2095.
  • Parto, Saeed. 2003. Economic Activity and Institutions, Economics Working Paper Archive at WUSTL.
  • Powell, W.W. (2007). "The New Institutionalism". The International Encyclopedia of Organization Studies. Thousand Oaks, CA: Sage.
  • Scott, Richard W. 2001. Institutions and Organizations, 2nd ed. Thousand Oaks: Sage Publications.
  • ———; Ruef, M.; Mendel, P.; Caronna, C. (2000). Institutional change and healthcare organizations : from professional dominance to managed care. Chicago: University of Chicago Press. ISBN 978-0-22674309-7. OCLC 42689995.
  • Thornton, Patricia H. (February 2002). "The rise of the corporation in a craft industry: conflict and conformity in institutional logics". Academy of Management Journal. 45 (1): 81–101. doi:10.2307/3069286. JSTOR 3069286.
  • ——— (2004). Markets from culture : institutional logics and organizational decisions in higher education publishing. Stanford, CA: Stanford Business Books. ISBN 978-0-80474021-0. OCLC 53483582.
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