Institution

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Institutions, according to Samuel P. Huntington, are "stable, valued, recurring patterns of behavior." [1] Institutions can refer to mechanisms which govern the behavior of a set of individuals within a given community, and are identified with a social purpose, transcending individuals and intentions by mediating the rules that govern living behavior. [2] According to Geoffrey M. Hodgson, it is misleading to say that an institution is a form of behavior. Instead, Hodgson states that institutions are "integrated systems of rules that structure social interactions." [3]

Contents

The term "institution" commonly applies to both informal institutions such as customs, or behavior patterns important to a society, and to particular formal institutions created by law as well as custom and having a distinctive permanence in ordering social behaviors. Primary or meta-institutions are institutions such as the family or money that are broad enough to encompass sets of related institutions.

Institutions are a principal object of study in social sciences such as political science, anthropology, economics, and sociology (the latter described by Émile Durkheim as the "science of institutions, their genesis and their functioning"). [4] Institutions are also a central concern for law, the formal mechanism for political rule-making and enforcement. Historians study and document the founding, growth, decay and development of institutions as part of political, economic and cultural history.

Definition

There are a variety of definitions of institutions. These definitions entail varying levels of formality and organizational complexity. [5] [6] The most expansive definitions may include informal but regularized practices, such as handshakes, whereas the most narrow definitions may only include institutions that are highly formalized (e.g. have specified laws, rules and complex organizational structures).

According to Wolfgang Streeck and Kathleen Thelen, institutions are in the most general sense "building blocks of social order: they represent socially sanctioned, that is, collectively enforced expectations with respect to the behavior of specific categories of actors or to the performance of certain activities. Typically they involve mutually related rights and obligations for actors." [6] Sociologists and anthropologists have expansive definitions of institutions that include informal institutions. Political scientists have sometimes defined institutions in more formal ways where third parties must reliably and predictably enforce the rules governing the transactions of first and second parties. [6]

One prominent Rational Choice Institutionalist definition of institutions is provided by Jack Knight who defines institutions as entailing "a set of rules that structure social interactions in particular ways" and that "knowledge of these rules must be shared by the members of the relevant community or society." [7] Definitions by Knight and Randall Calvert exclude purely private idiosyncrasies and conventions. [7] [5]

Douglass North defines institutions as "rules of the game in a society" [8] and "humanly devised constraints that structure political, economic and social interactions." [9] Randall Calvert defines institution as "an equilibrium of behavior in an underlying game." [5] This means that "it must be rational for nearly every individual to almost always adhere to the behavior prescriptions of the institution, given that nearly all other individuals are doing so." [5]

Robert Keohane defined institutions as "persistent and connected sets of rules (formal or informal) that prescribe behavioral roles, constrain activity, and shape expectations." [10]

Avner Greif and David Laitin define institutions "as a system of human-made, nonphysical elements – norms, beliefs, organizations, and rules – exogenous to each individual whose behavior it influences that generates behavioral regularities." [11] Additionally, they specify that organizations "are institutional elements that influence the set of beliefs and norms that can be self-enforcing in the transaction under consideration. Rules are behavioral instructions that facilitate individuals with the cognitive task of choosing behavior by defining the situation and coordinating behavior." [11]

All definitions of institutions generally entail that there is a level of persistence and continuity. [12] Laws, rules, social conventions and norms are all examples of institutions. [13] Organizations and institutions can be synonymous, but Jack Knight writes that organizations are a narrow version of institutions or represent a cluster of institutions; the two are distinct in the sense that organizations contain internal institutions (that govern interactions between the members of the organizations). [7]

An informal institution tends to have socially shared rules, which are unwritten and yet are often known by all inhabitants of a certain country, as such they are often referred to as being an inherent part of the culture of a given country. Informal practices are often referred to as "cultural", for example clientelism or corruption is sometimes stated as a part of the political culture in a certain place, but an informal institution itself is not cultural, it may be shaped by culture or behaviour of a given political landscape, but they should be looked at in the same way as formal institutions to understand their role in a given country. The relationship between formal and informal institutions is often closely aligned and informal institutions step in to prop up inefficient institutions. However, because they do not have a centre, which directs and coordinates their actions, changing informal institutions is a slow and lengthy process. [14]

Examples

Examples of institutions include:

In an extended context:

Social science perspectives

While institutions tend to appear to people in society as part of the natural, unchanging landscape of their lives, study of institutions by the social sciences tends to reveal the nature of institutions as social constructions, artifacts of a particular time, culture and society, produced by collective human choice, though not directly by individual intention. Sociology traditionally analyzed social institutions in terms of interlocking social roles and expectations. Social institutions created and were composed of groups of roles, or expected behaviors. The social function of the institution was executed by the fulfillment of roles. Basic biological requirements, for reproduction and care of the young, are served by the institutions of marriage and family, for example, by creating, elaborating and prescribing the behaviors expected for husband/father, wife/mother, child, etc.[ citation needed ]

The relationship of the institutions to human nature is a foundational question for the social sciences. Institutions can be seen as "naturally" arising from, and conforming to, human nature—a fundamentally conservative view—or institutions can be seen as artificial, almost accidental, and in need of architectural redesign, informed by expert social analysis, to better serve human needs—a fundamentally progressive view. Adam Smith anchored his economics in the supposed human "propensity to truck, barter and exchange". Modern feminists have criticized traditional marriage and other institutions as element of an oppressive and obsolete patriarchy. The Marxist view—which sees human nature as historically 'evolving' towards voluntary social cooperation, shared by some anarchists—is that supra-individual institutions such as the market and the state are incompatible with the individual liberty of a truly free society.

Economics, in recent years, has used game theory to study institutions from two perspectives. Firstly, how do institutions survive and evolve? In this perspective, institutions arise from Nash equilibria of games. For example, whenever people pass each other in a corridor or thoroughfare, there is a need for customs, which avoid collisions. Such a custom might call for each party to keep to their own right (or left—such a choice is arbitrary, it is only necessary that the choice be uniform and consistent). Such customs may be supposed to be the origin of rules, such as the rule, adopted in many countries, which requires driving automobiles on the right side of the road.

Secondly, how do institutions affect behaviour? In this perspective, the focus is on behaviour arising from a given set of institutional rules. In these models, institutions determine the rules (i.e. strategy sets and utility functions) of games, rather than arise as equilibria out of games. Douglass North argues, the very emergence of an institution reflects behavioral adaptations through his application of increasing returns. [27] Over time institutions develop rules that incentivize certain behaviors over others because they present less risk or induce lower cost, and establish path dependent outcomes. For example, the Cournot duopoly model is based on an institution involving an auctioneer who sells all goods at the market-clearing price. While it is always possible to analyze behaviour with the institutions-as-equilibria approach instead, it is much more complicated.[ citation needed ]

In political science, the effect of institutions on behavior has also been considered from a meme perspective, like game theory borrowed from biology. A "memetic institutionalism" has been proposed, suggesting that institutions provide selection environments for political action, whereby differentiated retention arises and thereby a Darwinian evolution of institutions over time. Public choice theory, another branch of economics with a close relationship to political science, considers how government policy choices are made, and seeks to determine what the policy outputs are likely to be, given a particular political decision-making process and context. Credibility thesis purports that institutions emerge from intentional institution-building but never in the originally intended form. [28] Instead, institutional development is endogenous and spontaneously ordered and institutional persistence can be explained by their credibility, [29] which is provided by the function that particular institutions serve.

In history, a distinction between eras or periods, implies a major and fundamental change in the system of institutions governing a society. Political and military events are judged to be of historical significance to the extent that they are associated with changes in institutions. In European history, particular significance is attached to the long transition from the feudal institutions of the Middle Ages to the modern institutions, which govern contemporary life.

Theories of institutional emergence

Scholars have proposed different approaches to the emergence of institutions, such as spontaneous emergence, evolution and social contracts. Some scholars argue that institutions can emerge spontaneously without intent as individuals and groups converge on a particular institutional arrangement. [30] [31] Other approaches see institutional development as the result of evolutionary or learning processes. Other scholars see institutions as being formed through social contracts [32] or rational purposeful designs. [33]

Theories of institutional change

In order to understand why some institutions persist and other institutions only appear in certain contexts, it is important to understand what drives institutional change. Acemoglu, Johnson and Robinson assert that institutional change is endogenous. They posit a framework for institutional change that is rooted in the distribution of resources across society and preexisting political institutions. These two factors determine de jure and de facto political power, respectively, which in turn defines this period's economic institutions and next period's political institutions. Finally, the current economic institutions determine next period's distribution of resources and the cycle repeats. [34] Douglass North attributes institutional change to the work of "political entrepreneurs", who see personal opportunities to be derived from a changed institutional framework. These entrepreneurs weigh the expected costs of altering the institutional framework against the benefits they can derive from the change. [35] North describes institutional change as a process that is extremely incremental, and that works through both formal and informal institutions. Lipscy argues that patterns of institutional change vary according to underlying characteristics of issue areas, such as network effects. [36]

In a 2020 study, Johannes Gerschewski created a two-by-two typology of institutional change depending on the sources of change (exogenous or endogenous) and the time horizon of change (short or long). [37] In another 2020 study, Erik Voeten created a two-by-two typology of institutional design depending on whether actors have full agency or are bound by structures, and whether institutional designs reflect historical processes or are optimal equilibriums. [38]

Institutional persistence

North argues that because of the preexisting influence that existing organizations have over the existing framework, change that is brought about is often in the interests of these organizations. This produces a phenomenon called path dependence, which states that institutional patterns are persistent and endure over time. [39] These paths are determined at critical junctures, analogous to a fork in the road, whose outcome leads to a narrowing of possible future outcomes. Once a choice is made during a critical juncture, it becomes progressively difficult to return to the initial point where the choice was made. James Mahoney studies path dependence in the context of national regime change in Central America and finds that liberal policy choices of Central American leaders in the 19th century was the critical juncture that led to the divergent levels of development that we see in these countries today. [40] The policy choices that leaders made in the context of liberal reform policy led to a variety of self-reinforcing institutions that created divergent development outcomes for the Central American countries.

Though institutions are persistent, North states that paths can change course when external forces weaken the power of an existing organization. This allows other entrepreneurs to affect change in the institutional framework. This change can also occur as a result of gridlock between political actors produced by a lack of mediating institutions and an inability to reach a bargain. [41] Artificial implementation of institutional change has been tested in political development but can have unintended consequences. North, Wallis, and Weingast divide societies into different social orders: open access orders, which about a dozen developed countries fall into today, and limited access orders, which accounts for the rest of the countries. Open access orders and limited access orders differ fundamentally in the way power and influence is distributed. As a result, open access institutions placed in limited access orders face limited success and are often coopted by the powerful elite for self-enrichment. Transition to more democratic institutions is not created simply by transplanting these institutions into new contexts, but happens when it is in the interest of the dominant coalition to widen access. [42]

Natural selection

Ian Lustick suggests that the social sciences, particularly those with the institution as a central concept, can benefit by applying the concept of natural selection to the study of how institutions change over time. [43] By viewing institutions as existing within a fitness landscape, Lustick argues that the gradual improvements typical of many institutions can be seen as analogous to hill-climbing within one of these fitness landscapes. This can eventually lead to institutions becoming stuck on local maxima, such that for the institution to improve any further, it would first need to decrease its overall fitness score (e.g., adopt policies that may cause short-term harm to the institution's members). The tendency to get stuck on local maxima can explain why certain types of institutions may continue to have policies that are harmful to its members or to the institution itself, even when members and leadership are all aware of the faults of these policies.

As an example, Lustick cites Amyx's analysis of the gradual rise of the Japanese economy and its seemingly sudden reversal in the so-called "Lost Decade". According to Amyx, Japanese experts were not unaware of the possible causes of Japan's economic decline. Rather, to return Japan's economy back to the path to economic prosperity, policymakers would have had to adopt policies that would first cause short-term harm to the Japanese people and government. Under this analysis, says Ian Lustick, Japan was stuck on a "local maxima", which it arrived at through gradual increases in its fitness level, set by the economic landscape of the 1970s and 80s. Without an accompanying change in institutional flexibility, Japan was unable to adapt to changing conditions, and even though experts may have known which changes the country needed, they would have been virtually powerless to enact those changes without instituting unpopular policies that would have been harmful in the short-term. [43] [44]

The lessons from Lustick's analysis applied to Sweden's economic situation can similarly apply to the political gridlock that often characterizes politics in the United States. For example, Lustick observes that any politician who hopes to run for elected office stands very little to no chance if they enact policies that show no short-term results. Unfortunately, there is a mismatch between policies that bring about short-term benefits with minimal sacrifice, and those that bring about long-lasting change by encouraging institution-level adaptations.[ citation needed ]

There are some criticisms to Lustick's application of natural selection theory to institutional change. Lustick himself notes that identifying the inability of institutions to adapt as a symptom of being stuck on a local maxima within a fitness landscape does nothing to solve the problem. At the very least, however, it might add credibility to the idea that truly beneficial change might require short-term harm to institutions and their members. David Sloan Wilson notes that Lustick needs to more carefully distinguish between two concepts: multilevel selection theory and evolution on multi-peaked landscapes. [43] Bradley Thayer points out that the concept of a fitness landscape and local maxima only makes sense if one institution can be said to be "better" than another, and this in turn only makes sense insofar as there exists some objective measure of an institution's quality. This may be relatively simple in evaluating the economic prosperity of a society, for example, but it is difficult to see how objectively a measure can be applied to the amount of freedom of a society, or the quality of life of the individuals within. [43]

Institutionalization

The term "institutionalization" is widely used in social theory to refer to the process of embedding something (for example a concept, a social role, a particular value or mode of behavior) within an organization, social system, or society as a whole. The term may also be used to refer to committing a particular individual to an institution, such as a mental institution. To this extent, "institutionalization" may carry negative connotations regarding the treatment of, and damage caused to, vulnerable human beings by the oppressive or corrupt application of inflexible systems of social, medical, or legal controls by publicly owned, private or not-for-profit organizations.

The term "institutionalization" may also be used in a political sense to apply to the creation or organization of governmental institutions or particular bodies responsible for overseeing or implementing policy, for example in the welfare or development.

See also

Related Research Articles

In political science, a revolution is a fundamental and relatively sudden change in political power and political organization which occurs when the population revolts against the government, typically due to perceived oppression or political incompetence.

Social science Academic disciplines concerned with society and the relationships between individuals in society

Social science is the branch of science devoted to the study of societies and the relationships among individuals within those societies. The term was formerly used to refer to the field of sociology, the original "science of society", established in the 19th century. In addition to sociology, it now encompasses a wide array of academic disciplines, including anthropology, archaeology, economics, human geography, linguistics, management science, political science, psychology, and history.

Socialization Lifelong process of inheriting and disseminating norms, customs and ideologies

In sociology, socialization is the process of internalizing the norms and ideologies of society. Socialization encompasses both learning and teaching and is thus "the means by which social and cultural continuity are attained".

Social norm Informal understanding of acceptable conduct

Social norms are shared standards of acceptable behavior by groups. Social norms can both be informal understandings that govern the behavior of members of a society, as well as be codified into rules and laws. Social normative influences or social norms, are deemed to be powerful drivers of human behavioural changes and well organized and incorporated by major theories which explaining human behaviour. Institutions are composed of multiple norms. Norms are shared and social beliefs about behavior; thus, they are distinct from "ideas", "attitudes", and "values", which can be held privately, and which do not necessarily concern behavior. Norms are contingent on context, social group, and historical circumstances.

Social control Concept within the disciplines of the social sciences and within political science

Social control is a concept within the disciplines of the social sciences. Social control is described as a certain set of rules and standards in society that keep individuals bound to conventional standards as well as to the use of formalized mechanisms. The disciplinary model was the forerunner to the control model.

Organization Social entity established to meet needs or pursue goals

An organization, or organisation, is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose.

In economics and related disciplines, a transaction cost is a cost in making any economic trade when participating in a market. Oliver E. Williamson defines transaction costs as the costs of running an economic system of companies, and unlike production costs, decision-makers determine strategies of companies by measuring transaction costs and production costs. Transaction costs are the total costs of making a transaction, including the cost of planning, deciding, changing plans, resolving disputes, and after-sales. Therefore, the transaction cost is one of the most significant factors in business operation and management.

Structural functionalism Sociological framework

Structural functionalism, or simply functionalism, is "a framework for building theory that sees society as a complex system whose parts work together to promote solidarity and stability".

Normative generally means relating to an evaluative standard. Normativity is the phenomenon in human societies of designating some actions or outcomes as good, desirable, or permissible, and others as bad, undesirable, or impermissible. A norm in this normative sense means a standard for evaluating or making judgments about behavior or outcomes. Normative is sometimes also used, somewhat confusingly, to mean relating to a descriptive standard: doing what is normally done or what most others are expected to do in practice. In this sense a norm is not evaluative, a basis for judging behavior or outcomes; it is simply a fact or observation about behavior or outcomes, without judgment. Many researchers in science, law, and philosophy try to restrict the use of the term normative to the evaluative sense and refer to the description of behavior and outcomes as positive, descriptive, predictive, or empirical.

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Douglass North American economist and Nobel laureate (1920–2015)

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Social structure Sociological classification of human societies according to their social characteristics

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Historical institutionalism (HI) is a new institutionalist social science approach that emphasizes how timing, sequences and path dependence affect institutions, and shape social, political, economic behavior and change. Unlike functionalist theories and some rational choice approaches, historical institutionalism tends to emphasize that many outcomes are possible, small events and flukes can have large consequences, actions are hard to reverse once they take place, and that outcomes may be inefficient. A critical juncture may set in motion events that are hard to reverse, because of issues related to path dependency. Historical institutionalists tend to focus on history to understand why specific events happen.

Sociology of terrorism Academic field that seeks to understand terrorism

Sociology of terrorism is a field of sociology that seeks to understand terrorism as a social phenomenon. The field defines terrorism, studies why it occurs and evaluates its impacts on society. The sociology of terrorism draws from the fields of political science, history, economics and psychology. The sociology of terrorism differs from critical terrorism studies, emphasizing the social conditions that enable terrorism. It also studies how individuals as well as states respond to such events.

Institutional analysis is that part of the social sciences which studies how institutions—i.e., structures and mechanisms of social order and cooperation governing the behavior of two or more individuals—behave and function according to both empirical rules and also theoretical rules. This field deals with how individuals and groups construct institutions, how institutions function in practice, and the effects of institutions on each other, on individuals, societies and the community at large.

Sociology Social science that studies human society and its development

Sociology is a social science that focuses on society, human social behavior, patterns of social relationships, social interaction, and aspects of culture associated with everyday life. It uses various methods of empirical investigation and critical analysis to develop a body of knowledge about social order and social change. While some sociologists conduct research that may be applied directly to social policy and welfare, others focus primarily on refining the theoretical understanding of social processes. Subject matter can range from micro-level analyses of society to macro-level analyses.

Social network Social structure made up of a set of social actors

A social network is a social structure made up of a set of social actors, sets of dyadic ties, and other social interactions between actors. The social network perspective provides a set of methods for analyzing the structure of whole social entities as well as a variety of theories explaining the patterns observed in these structures. The study of these structures uses social network analysis to identify local and global patterns, locate influential entities, and examine network dynamics.

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Further reading