The new institutionalism: Contradictory notions of change

American Journal of Economics and Sociology

Volumn 59, Issue 2, 2000, Pages 267-282

  Hira, Anil ^a   Hira, Ron ^b  

^a US International Trade Commission   (United States)

^b GEORGE MASON UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0039594723     PISSN: 00029246     EISSN: None     Source Type: Journal    
DOI: 10.1111/1536-7150.00026     Document Type: Article

References (34)

1. See, for example, Jane J. Mansbridge, ed., Beyond Self-Interest, Chicago: The University of Chicago Press, 1990.
2. Christer Gunnarsson, "What is New and What is Institutional in the New Institutional Economics? An Essay on Old and New Institutionalism and the Role of the State in Developing Countries." Scandinavian Economic History Review 39 (1991), 50.
3. Ibid., p.60.
4. Douglass C. North, Institutions, Institutional Change and Economic Performance, New York: Cambridge University Press, 1990, 18.
5. Ibid., pp. 21-26.
6. Ibid., p. 3.
7. A good summary of North's theoretical framework is found in North, "A Theory of Institutional Change and the Economic History of the Western World, " in Michael Hechter, ed., The Microfoundations of Macrosociology, Philadelphia: Temple University Press, 1983, pp. 190-215.
8. Ibid., p. 5.
9. Ronald Coase, "The Nature of the Firm, " Economica 4 (Nov. 1937): 386-405.
10. Armen A. Alchian and Harold Demsetz, "The Property Rights Paradigm, " Journal of Economic History 33 (1973), 22.
11. One of the few examples of an application of new institutionalism to a specific case of underdevelopment is De Soto's study of Peru. See Hernan De Soto, The Other Path: The Invisible Revolution in the Third World, New York: Harper and Row, 1989.
12. North, Institutions, p. 7.
13. Ibid., pp. 57-8.
14. James G. March and Johan P. Olson, "The New Institutionalism: Organizational Factors in Political Life, " The American Political Science Review 78 (1984), 734-744.
15. Ibid., pp. 41-47.
16. A good summary of North's thoughts on the matter are found in North, "Five Propositions about Institutional Change, " in Jack Knight and Itai Sened, Explaining Social Institutions, Ann Arbor: University of Michigan Press, 1995, pp. 15-26.
17. Ibid., pp. 83-90.
18. We would go even further and say that the definition of the state used by North is far too limited. The state is not just the arbiter of the rules of the game, but also the embodiment of the leadership, hopes, myths, and overall identity of the population as a whole. See North, "A Theory of Institutional Change, " pp. 198-200.
19. Ibid., pp. 7-8.
20. Ibid., p. 75.
21. Ibid., p. 130.
22. In fact, we believe the major errors of the new institutional model probably arise from an exclusive focus on Western history, where institutions and rules have been more closely linked to economic development. North's work has exclusively examined Western, namely American or Western European, case studies.
23. Ibid., p. 9.
24. See North, "The Ultimate Sources of Economic Growth, " in Explaining Economic Growth: Essays in Honour of Angus Maddison, " NY: North-Holland, 1993, pp.70-73.
25. Douglass C. North and John J. Wallis, "Integrating Institutional Change and Technical Change in Economic History: A Transaction Cost Approach, " Journal of Institutional and Theoretical Economics 150/4 (1994), pp. 609-611.
26. Richard R. Nelson and Sidney G. Winter, An Evolutionary Theory, of Economic Change, Cambridge, MA: Harvard University Press, 1982, p. 14.
27. Though the new institutionalists evoke these other factors, they still emphasize the primacy of property rights and institutional arrangements in setting growth rates. See North, Structure and Change in Economic History, p. 17.
28. Though North lays out some basic hypotheses about ideology, they are not incorporated into his model. This is rather confusing, since he continually calls for "a positive model of ideology." See Structure and Change, pp.49-58. "Five Propositions, " and "Ideology and Political/Economic Institutions, " Cato Journal, 8:1 (Spring/Summer 1988), pp. 15-28. He does note in at least one place that "diverse ideologies stem from either diverse geographic origins or from occupational specializations." (North, "A Theory of Institutional Change, " p. 197.) It hardly needs stating that the origins, dynamics, and mechanics of ideology are considerably more complex in nature than this would imply. See Malcolm Rutherford, "The Old and the New Institutionalism, " Journal of Economic Issues, 29:2 (June 1995), pp.444-51 and James L. Curtis, "Structure and Change in the Political Economy of Douglass North, " Administration and Society, 16:4 (Feb 1985), pp.512-517, for additional commentary.
29. Though North lays out some basic hypotheses about ideology, they are not incorporated into his model. This is rather confusing, since he continually calls for "a positive model of ideology." See Structure and Change, pp.49-58. "Five Propositions, " and "Ideology and Political/Economic Institutions, " Cato Journal, 8:1 (Spring/Summer 1988), pp. 15-28. He does note in at least one place that "diverse ideologies stem from either diverse geographic origins or from occupational specializations." (North, "A Theory of Institutional Change, " p. 197.) It hardly needs stating that the origins, dynamics, and mechanics of ideology are considerably more complex in nature than this would imply. See Malcolm Rutherford, "The Old and the New Institutionalism, " Journal of Economic Issues, 29:2 (June 1995), pp.444-51 and James L. Curtis, "Structure and Change in the Political Economy of Douglass North, " Administration and Society, 16:4 (Feb 1985), pp.512-517, for additional commentary.
30. Though North lays out some basic hypotheses about ideology, they are not incorporated into his model. This is rather confusing, since he continually calls for "a positive model of ideology." See Structure and Change, pp.49-58. "Five Propositions, " and "Ideology and Political/Economic Institutions, " Cato Journal, 8:1 (Spring/Summer 1988), pp. 15-28. He does note in at least one place that "diverse ideologies stem from either diverse geographic origins or from occupational specializations." (North, "A Theory of Institutional Change, " p. 197.) It hardly needs stating that the origins, dynamics, and mechanics of ideology are considerably more complex in nature than this would imply. See Malcolm Rutherford, "The Old and the New Institutionalism, " Journal of Economic Issues, 29:2 (June 1995), pp.444-51 and James L. Curtis, "Structure and Change in the Political Economy of Douglass North, " Administration and Society, 16:4 (Feb 1985), pp.512-517, for additional commentary.
31. Though North lays out some basic hypotheses about ideology, they are not incorporated into his model. This is rather confusing, since he continually calls for "a positive model of ideology." See Structure and Change, pp.49-58. "Five Propositions, " and "Ideology and Political/Economic Institutions, " Cato Journal, 8:1 (Spring/Summer 1988), pp. 15-28. He does note in at least one place that "diverse ideologies stem from either diverse geographic origins or from occupational specializations." (North, "A Theory of Institutional Change, " p. 197.) It hardly needs stating that the origins, dynamics, and mechanics of ideology are considerably more complex in nature than this would imply. See Malcolm Rutherford, "The Old and the New Institutionalism, " Journal of Economic Issues, 29:2 (June 1995), pp.444-51 and James L. Curtis, "Structure and Change in the Political Economy of Douglass North, " Administration and Society, 16:4 (Feb 1985), pp.512-517, for additional commentary.
32. Though North lays out some basic hypotheses about ideology, they are not incorporated into his model. This is rather confusing, since he continually calls for "a positive model of ideology." See Structure and Change, pp.49-58. "Five Propositions, " and "Ideology and Political/Economic Institutions, " Cato Journal, 8:1 (Spring/Summer 1988), pp. 15-28. He does note in at least one place that "diverse ideologies stem from either diverse geographic origins or from occupational specializations." (North, "A Theory of Institutional Change, " p. 197.) It hardly needs stating that the origins, dynamics, and mechanics of ideology are considerably more complex in nature than this would imply. See Malcolm Rutherford, "The Old and the New Institutionalism, " Journal of Economic Issues, 29:2 (June 1995), pp.444-51 and James L. Curtis, "Structure and Change in the Political Economy of Douglass North, " Administration and Society, 16:4 (Feb 1985), pp.512-517, for additional commentary.
33. It is strange that the new institutionalists, including North, often refer to the effects of ideology and culture in their case studies, but do not clearly incorporate them into their theoretical framework. For an example of a case study along these lines, see Avner Grief, "On the Interrelations and Economic Implications of Economic, Social, Political, and Normative Factors: Reflections from Two Late Medieval Societies, " in John N. Drobak and John V. C. Nye, The Frontiers of the New Institutional Economics, NY: The Academic Press, 1997, pp. 57-94.
34. In my book, I try to lay out a first step model of how ideas affect economic policy. See Anil Hira, How Ideas Affect Economic Policy in Latin America: Regional, National, and Organizational Models, Westport, CT: Greenwood Press, 1998.