Analyzing Institutions and Institutional Change
Friday, Jan. 5, 2018 2:30 PM - 4:30 PM
- Chair: Ann E. Davis, Marist College
Interdependence as the Fundamental Origin of Institutional Change
AbstractInstitutional economics, both old and new, have focused on two forms of analysis – institutional performance and institutional change. Relative prices (North), transaction costs (Williamson), ceremonial and instrumental values (Ayers), and technological change (Bush) have all been identified as explanatory variables of institutional change. These explanations, however, fail to consider the most fundamental cause of institution change: changes in human interdependence. According to Schmid, interdependencies are present when the possibility exists that “one person’s actions…affect the welfare of another person.” These interdependencies are the result of the unavoidable physical characteristics of goods (goods being defined as situations, conditions, and things of value). In the face of these interdependencies, institutions “are sets of ordered relationships among people that define their rights, their exposure to the rights of others, their privileges and their responsibilities [and thereby] sort out the potential interdependencies and provide order and predictability to the [transactions of] the parties.” If institutions provide the framework of rules within which economic actors deal with these interdependencies, then changes in perceived interdependencies are likely to result in collective action that produces changes in institutions. This paper will examine changes in interdependencies as the fundamental origin of institutional change and will incorporate many of the prior theories of institutional change into a comprehensive theory of institutional change.
Social Entrepreneurship: Driving Institutional Change
AbstractIn the aftermath of the ‘Great Recession’, concern with exclusionary and unethical business practices has led to the growing popularity of social entrepreneurship, which focuses on the creation of social value, not wealth. However, the role of social entrepreneurship as a force for good has been debated. Drawing on Walter Neale’s (1987) conceptualization of institutions, Paul Bush’s (1987) theory of institutional change, and James Street’s (1987) institutionalist theory of economic development, this paper will reflect on social entrepreneurship from the context of China and India, two key emerging markets. The paper discusses the evolution of social enterprise in these countries (from both domestic and international sources) and illustrates the ways these businesses have impacted women’s employment opportunities and experiences in these countries, particularly in the informal sector. The paper also situates social entrepreneurship in the landscape of decent work opportunities, considers policies that buttress or hinder the growth of this form of employment, and highlights the potential for cross-sector partnerships, underscoring the limits of social enterprise as a stand-alone solution in our complex institutional environment.
Institutional Change and Evolution of the World Leisure Industries
AbstractApplying the analytical framework as articulated in the Theory of Institutional Change (Bush 1987) and related evidences drawn from the world leisure industries like those in Western Europe, North America and Asia, this paper explores the evolutionary process of leisure as a modern and global industrial sector. In particular, reasoning from the ceremonial-instrumental dichotomy and arguments on the process of institutional change (e.g., the two phases to achieve a progressive institutional change) are expounded in the contexts of the world leisure industries. Accordingly, the dynamic aspects of institutional change and its interrelationship with the progress of the leisure industries across various key periods and regions are uncovered. Since the middle of the 20th century, the world leisure industries have been experiencing dramatic progress. This is largely promoted by the development of mass leisure, instead of by a small group of “rich class” as discoursed by Veblen (1899) on one hand, and advancement in technologies and industrial innovations that expand the space for the leisure markets on the other hand. Despite sharing a number of similarities in the business practice, multifarious organizations, business performances and development paths of the leisure industries in the various regions of the world are largely influenced by a set of institutional factors like culture, education and public interests, as well as their interactions and changes over time. Given that every path has a puddle, findings indeed show that Bush’s related works provide a synthetic framework deserving further efforts in studies of the economics of leisure.
Technology and Institutions in Neo-Schumpeterian and Original Institutional Thinking
AbstractEconomists acknowledge the importance of knowledge and technological change for human progress. Nonetheless, the question remains of how to channel knowledge towards effective solutions for pressing societal problems. Looking for answers to this question the aim of this inquiry is to deepen our understanding of the interactions between knowledge, technologies and institutions in socio-economic process by considering the affinities of Original Institutional Economics (OIE) and neo-Schumpeterian economics (NSE). Both evolutionary strands of evolutionary economic thought recognize the importance of knowledge for human progress and the role of institutions in molding this process. From my view, both OIE and NSE share a common perspective in what concerns (i) the role of knowledge for socio-economic change, (ii) the behavioral dimension of technology molded by institutions, and (iii) the role of purposeful evaluation in processes of institutional and technological change. Considering these commonalities both strands of thinking could benefit from “joining forces”. Firstly, the conceptualization of how knowledge and technologies drive human progress from a neo-Schumpeterian perspective could very much benefit from the consideration of the value system and the power structure sustaining it as put forward by OIE. Values and power appear as key determinants channeling (or retaining) knowledge towards human progress. Moreover, the role of the value system as suggested by OIE could be operationalized and further developed to explain paths of socio-economic development drawing on the conceptualization of “selection mechanisms” as put forward by neo-Schumpeterian models.
- B5 - Current Heterodox Approaches
- O0 - General