Trust, Institutions, and Institutional Change: Industrial Districts and the Social Capital Hypothesis

Politics and Society

Volumn 31, Issue 4, 2003, Pages 537-566

  Farrell, Henry ^a   Knight, Jack ^b  

^a UNIVERSITY OF TORONTO   (Canada)

^b WASHINGTON UNIVERSITY   (United States)

Author keywords

Comparative political economy; Institutions; Rational choice; Social capital; Trust

Indexed keywords

EID: 0345017604     PISSN: 00323292     EISSN: None     Source Type: Journal    
DOI: 10.1177/0032329203256954     Document Type: Review

References (119)

1. See, for example, Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1993); Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000); Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity (London: Hamish Hamilton, 1995); Russell Hardin, Trust and Trustworthiness (New York: Russell Sage, forthcoming); Margaret Levi, "A State of Trust," in Trust and Governance, ed. Valerie Braithwaite and Margaret Levi (New York: Russell Sage, 1998), 77-101; Karen Cook, ed., Trust in Society (New York: Russell Sage, 2000).
2. See, for example, Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1993); Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000); Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity (London: Hamish Hamilton, 1995); Russell Hardin, Trust and Trustworthiness (New York: Russell Sage, forthcoming); Margaret Levi, "A State of Trust," in Trust and Governance, ed. Valerie Braithwaite and Margaret Levi (New York: Russell Sage, 1998), 77-101; Karen Cook, ed., Trust in Society (New York: Russell Sage, 2000).
3. See, for example, Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1993); Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000); Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity (London: Hamish Hamilton, 1995); Russell Hardin, Trust and Trustworthiness (New York: Russell Sage, forthcoming); Margaret Levi, "A State of Trust," in Trust and Governance, ed. Valerie Braithwaite and Margaret Levi (New York: Russell Sage, 1998), 77-101; Karen Cook, ed., Trust in Society (New York: Russell Sage, 2000).
4. See, for example, Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1993); Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000); Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity (London: Hamish Hamilton, 1995); Russell Hardin, Trust and Trustworthiness (New York: Russell Sage, forthcoming); Margaret Levi, "A State of Trust," in Trust and Governance, ed. Valerie Braithwaite and Margaret Levi (New York: Russell Sage, 1998), 77-101; Karen Cook, ed., Trust in Society (New York: Russell Sage, 2000).
5. See, for example, Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1993); Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000); Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity (London: Hamish Hamilton, 1995); Russell Hardin, Trust and Trustworthiness (New York: Russell Sage, forthcoming); Margaret Levi, "A State of Trust," in Trust and Governance, ed. Valerie Braithwaite and Margaret Levi (New York: Russell Sage, 1998), 77-101; Karen Cook, ed., Trust in Society (New York: Russell Sage, 2000).
6. See, for example, Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1993); Robert D. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000); Francis Fukuyama, Trust: The Social Virtues and the Creation of Prosperity (London: Hamish Hamilton, 1995); Russell Hardin, Trust and Trustworthiness (New York: Russell Sage, forthcoming); Margaret Levi, "A State of Trust," in Trust and Governance, ed. Valerie Braithwaite and Margaret Levi (New York: Russell Sage, 1998), 77-101; Karen Cook, ed., Trust in Society (New York: Russell Sage, 2000).
7. See, for example, Sidney Tarrow, "Making Social Science Work Across Space and Time: A Critical Reflection on Robert Putnam's Making Democracy Work," American Political Science Review 90, no. 2 (1996): 389-97; Margaret Levi, "Social and Unsocial Capital: A Review Essay of Robert Putnam's Making Democracy Work," Politics & Society 24, no. 1 (1996): 45-55; Filipo Sabetti, "Path Dependency and Civic Culture: Some Lessons from Italy about Interpreting Social Experiments," Politics & Society 24, no. 1 (1996): 19-44; Carlo Trigilia, "Capitale Sociale e Sviluppo Locale," Stato e Mercato, no. 3 (1999): 419-40; Arnaldo Bagnasco, "Teoria Del Capitale Sociale e Political Economy Comparata,"Stato e Mercato, no. 3 (1999): 351-72.
8. See, for example, Sidney Tarrow, "Making Social Science Work Across Space and Time: A Critical Reflection on Robert Putnam's Making Democracy Work," American Political Science Review 90, no. 2 (1996): 389-97; Margaret Levi, "Social and Unsocial Capital: A Review Essay of Robert Putnam's Making Democracy Work," Politics & Society 24, no. 1 (1996): 45-55; Filipo Sabetti, "Path Dependency and Civic Culture: Some Lessons from Italy about Interpreting Social Experiments," Politics & Society 24, no. 1 (1996): 19-44; Carlo Trigilia, "Capitale Sociale e Sviluppo Locale," Stato e Mercato, no. 3 (1999): 419-40; Arnaldo Bagnasco, "Teoria Del Capitale Sociale e Political Economy Comparata,"Stato e Mercato, no. 3 (1999): 351-72.
9. See, for example, Sidney Tarrow, "Making Social Science Work Across Space and Time: A Critical Reflection on Robert Putnam's Making Democracy Work," American Political Science Review 90, no. 2 (1996): 389-97; Margaret Levi, "Social and Unsocial Capital: A Review Essay of Robert Putnam's Making Democracy Work," Politics & Society 24, no. 1 (1996): 45-55; Filipo Sabetti, "Path Dependency and Civic Culture: Some Lessons from Italy about Interpreting Social Experiments," Politics & Society 24, no. 1 (1996): 19-44; Carlo Trigilia, "Capitale Sociale e Sviluppo Locale," Stato e Mercato, no. 3 (1999): 419-40; Arnaldo Bagnasco, "Teoria Del Capitale Sociale e Political Economy Comparata,"Stato e Mercato, no. 3 (1999): 351-72.
10. See, for example, Sidney Tarrow, "Making Social Science Work Across Space and Time: A Critical Reflection on Robert Putnam's Making Democracy Work," American Political Science Review 90, no. 2 (1996): 389-97; Margaret Levi, "Social and Unsocial Capital: A Review Essay of Robert Putnam's Making Democracy Work," Politics & Society 24, no. 1 (1996): 45-55; Filipo Sabetti, "Path Dependency and Civic Culture: Some Lessons from Italy about Interpreting Social Experiments," Politics & Society 24, no. 1 (1996): 19-44; Carlo Trigilia, "Capitale Sociale e Sviluppo Locale," Stato e Mercato, no. 3 (1999): 419-40; Arnaldo Bagnasco, "Teoria Del Capitale Sociale e Political Economy Comparata,"Stato e Mercato, no. 3 (1999): 351-72.
11. See, for example, Sidney Tarrow, "Making Social Science Work Across Space and Time: A Critical Reflection on Robert Putnam's Making Democracy Work," American Political Science Review 90, no. 2 (1996): 389-97; Margaret Levi, "Social and Unsocial Capital: A Review Essay of Robert Putnam's Making Democracy Work," Politics & Society 24, no. 1 (1996): 45-55; Filipo Sabetti, "Path Dependency and Civic Culture: Some Lessons from Italy about Interpreting Social Experiments," Politics & Society 24, no. 1 (1996): 19-44; Carlo Trigilia, "Capitale Sociale e Sviluppo Locale," Stato e Mercato, no. 3 (1999): 419-40; Arnaldo Bagnasco, "Teoria Del Capitale Sociale e Political Economy Comparata,"Stato e Mercato, no. 3 (1999): 351-72.
12. Some authors also have expressed doubt about Putnam's statistical methodology; see, for example, Tarrow, "Making Social Science Work"; Robert W. Jackman and Ross A. Miller, "A Renaissance of Political Culture?" American Journal of Political Science 40, no. 3 (1996): 632-59.
13. Some authors also have expressed doubt about Putnam's statistical methodology; see, for example, Tarrow, "Making Social Science Work"; Robert W. Jackman and Ross A. Miller, "A Renaissance of Political Culture?" American Journal of Political Science 40, no. 3 (1996): 632-59.
14. Putnam, Making Democracy Work, 167.
15. Ibid., 171.
16. Ibid., 172.
17. Ibid., 172.
18. James Coleman, Foundations of Social Theory (Cambridge: Harvard University Press, 1990), 91.
19. Ibid., 306-10.
20. As many have noted, not all forms of trust benefit society.
21. Oliver E. Williamson, The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting (New York: Free Press, 1985); Douglass C. North, "Institutions and a Transaction-Cost Theory of Exchange," in Perspectives on Positive Political Economy, ed. James E. Alt and Kenneth A. Shepsle (Cambridge: Cambridge University Press, 1990), 182-94; Douglass C. North, Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990).
22. Oliver E. Williamson, The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting (New York: Free Press, 1985); Douglass C. North, "Institutions and a Transaction-Cost Theory of Exchange," in Perspectives on Positive Political Economy, ed. James E. Alt and Kenneth A. Shepsle (Cambridge: Cambridge University Press, 1990), 182-94; Douglass C. North, Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990).
23. Oliver E. Williamson, The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting (New York: Free Press, 1985); Douglass C. North, "Institutions and a Transaction-Cost Theory of Exchange," in Perspectives on Positive Political Economy, ed. James E. Alt and Kenneth A. Shepsle (Cambridge: Cambridge University Press, 1990), 182-94; Douglass C. North, Institutions, Institutional Change and Economic Performance (Cambridge: Cambridge University Press, 1990).
24. Andrew Schotter, The Economic Theory of Social Institutions (Cambridge: Cambridge University Press, 1981); Randall L. Calvert, "Rational Actors, Equilibrium, and Social Institutions," in Explaining Social Institutions, ed. Jack Knight and Itai Sened (Ann Arbor: University of Michigan Press, 1995), 57-95; Randall L. Calvert and James Johnson, "Interpretation and Coordination in Constitutional Politics," in Lessons in Democracy, ed. Ewa Hauser and Jacek Wasilewski (Rochester, N. Y.: University of Rochester Press, 1999); Jack Knight, Institutions and Social Conflict (Cambridge: Cambridge University Press, 1992).
25. Andrew Schotter, The Economic Theory of Social Institutions (Cambridge: Cambridge University Press, 1981); Randall L. Calvert, "Rational Actors, Equilibrium, and Social Institutions," in Explaining Social Institutions, ed. Jack Knight and Itai Sened (Ann Arbor: University of Michigan Press, 1995), 57-95; Randall L. Calvert and James Johnson, "Interpretation and Coordination in Constitutional Politics," in Lessons in Democracy, ed. Ewa Hauser and Jacek Wasilewski (Rochester, N. Y.: University of Rochester Press, 1999); Jack Knight, Institutions and Social Conflict (Cambridge: Cambridge University Press, 1992).
26. Andrew Schotter, The Economic Theory of Social Institutions (Cambridge: Cambridge University Press, 1981); Randall L. Calvert, "Rational Actors, Equilibrium, and Social Institutions," in Explaining Social Institutions, ed. Jack Knight and Itai Sened (Ann Arbor: University of Michigan Press, 1995), 57-95; Randall L. Calvert and James Johnson, "Interpretation and Coordination in Constitutional Politics," in Lessons in Democracy, ed. Ewa Hauser and Jacek Wasilewski (Rochester, N. Y.: University of Rochester Press, 1999); Jack Knight, Institutions and Social Conflict (Cambridge: Cambridge University Press, 1992).
27. Andrew Schotter, The Economic Theory of Social Institutions (Cambridge: Cambridge University Press, 1981); Randall L. Calvert, "Rational Actors, Equilibrium, and Social Institutions," in Explaining Social Institutions, ed. Jack Knight and Itai Sened (Ann Arbor: University of Michigan Press, 1995), 57-95; Randall L. Calvert and James Johnson, "Interpretation and Coordination in Constitutional Politics," in Lessons in Democracy, ed. Ewa Hauser and Jacek Wasilewski (Rochester, N. Y.: University of Rochester Press, 1999); Jack Knight, Institutions and Social Conflict (Cambridge: Cambridge University Press, 1992).
28. Jack Knight, "The Bases of Cooperation: Social Norms and the Rule of Law," Journal of Institutional and Theoretical Economics 154, no. 4 (1998): 754-63. Peter Hall expresses a similar intuition when he suggests that social capital may best be understood as "the institutional infrastructure that makes fruitful coordination among firms and other economic actors possible." See Peter A. Hall, "The Political Economy of Europe in an Era of Interdependence," in Continuity and Change in Contemporary Capitalism, ed. Herbert Kitschelt et al. (Cambridge: Cambridge University Press, 1999), 163.
29. Jack Knight, "The Bases of Cooperation: Social Norms and the Rule of Law," Journal of Institutional and Theoretical Economics 154, no. 4 (1998): 754-63. Peter Hall expresses a similar intuition when he suggests that social capital may best be understood as "the institutional infrastructure that makes fruitful coordination among firms and other economic actors possible." See Peter A. Hall, "The Political Economy of Europe in an Era of Interdependence," in Continuity and Change in Contemporary Capitalism, ed. Herbert Kitschelt et al. (Cambridge: Cambridge University Press, 1999), 163.
30. Levi, "A State of Trust"; Hardin, Trust and Trustworthiness.
31. Levi, "A State of Trust"; Hardin, Trust and Trustworthiness.
32. Henry Farrell, "Trust and Political Economy: Institutions and the Sources of Inter-Firm Cooperation" (paper presented at International Society of the New Institutional Economics Annual Meeting, San Francisco, 13-15 September 2001; Henry Farrell, "Trust, Distrust and Power" in Distrust, ed. Russell Hardin (New York: Russell Sage, forthcoming); Knight, Institutions and Social Conflict; Jack Knight, "Models, Interpretations and Theories: Constructing Explanations of Institutional Emergence and Change," in Explaining Social Institutions, ed. Jack Knight and Itai Sened (Ann Arbor: University of Michigan Press, 1995), 95-119; Jack Knight, "Social Norms and the Rule of Law: Fostering Trust in a Socially Diverse Society," in Trust in Society, ed. Karen Cook (New York: Russell Sage, 2000), 354-73.
33. Henry Farrell, "Trust and Political Economy: Institutions and the Sources of Inter-Firm Cooperation" (paper presented at International Society of the New Institutional Economics Annual Meeting, San Francisco, 13-15 September 2001; Henry Farrell, "Trust, Distrust and Power" in Distrust, ed. Russell Hardin (New York: Russell Sage, forthcoming); Knight, Institutions and Social Conflict; Jack Knight, "Models, Interpretations and Theories: Constructing Explanations of Institutional Emergence and Change," in Explaining Social Institutions, ed. Jack Knight and Itai Sened (Ann Arbor: University of Michigan Press, 1995), 95-119; Jack Knight, "Social Norms and the Rule of Law: Fostering Trust in a Socially Diverse Society," in Trust in Society, ed. Karen Cook (New York: Russell Sage, 2000), 354-73.
34. Henry Farrell, "Trust and Political Economy: Institutions and the Sources of Inter-Firm Cooperation" (paper presented at International Society of the New Institutional Economics Annual Meeting, San Francisco, 13-15 September 2001; Henry Farrell, "Trust, Distrust and Power" in Distrust, ed. Russell Hardin (New York: Russell Sage, forthcoming); Knight, Institutions and Social Conflict; Jack Knight, "Models, Interpretations and Theories: Constructing Explanations of Institutional Emergence and Change," in Explaining Social Institutions, ed. Jack Knight and Itai Sened (Ann Arbor: University of Michigan Press, 1995), 95-119; Jack Knight, "Social Norms and the Rule of Law: Fostering Trust in a Socially Diverse Society," in Trust in Society, ed. Karen Cook (New York: Russell Sage, 2000), 354-73.
35. Henry Farrell, "Trust and Political Economy: Institutions and the Sources of Inter-Firm Cooperation" (paper presented at International Society of the New Institutional Economics Annual Meeting, San Francisco, 13-15 September 2001; Henry Farrell, "Trust, Distrust and Power" in Distrust, ed. Russell Hardin (New York: Russell Sage, forthcoming); Knight, Institutions and Social Conflict; Jack Knight, "Models, Interpretations and Theories: Constructing Explanations of Institutional Emergence and Change," in Explaining Social Institutions, ed. Jack Knight and Itai Sened (Ann Arbor: University of Michigan Press, 1995), 95-119; Jack Knight, "Social Norms and the Rule of Law: Fostering Trust in a Socially Diverse Society," in Trust in Society, ed. Karen Cook (New York: Russell Sage, 2000), 354-73.
36. Henry Farrell, "Trust and Political Economy: Institutions and the Sources of Inter-Firm Cooperation" (paper presented at International Society of the New Institutional Economics Annual Meeting, San Francisco, 13-15 September 2001; Henry Farrell, "Trust, Distrust and Power" in Distrust, ed. Russell Hardin (New York: Russell Sage, forthcoming); Knight, Institutions and Social Conflict; Jack Knight, "Models, Interpretations and Theories: Constructing Explanations of Institutional Emergence and Change," in Explaining Social Institutions, ed. Jack Knight and Itai Sened (Ann Arbor: University of Michigan Press, 1995), 95-119; Jack Knight, "Social Norms and the Rule of Law: Fostering Trust in a Socially Diverse Society," in Trust in Society, ed. Karen Cook (New York: Russell Sage, 2000), 354-73.
37. Putnam, Making Democracy Work, 159.
38. Ibid., 161.
39. Hardin, Trust and Trustworthiness.
40. See Wolfgang Streeck, "Production Constraints: On the Institutional Conditions of Diversified Quality Production," in Social Institutions and Economic Performance: Studies of Industrial Relations in Advanced Capitalist Economies, ed. Wolfgang Streeck (London: Sage Ltd., 1992), 1-41; also Alessandro Arrighetti, Reinhard Bachmann, and Simon Deakin, "Contract Law, Social Norms and Inter-Firm Cooperation," Cambridge Journal of Economics 21 (1997): 189: "The stability of the underlying relationships, and the expectation that potential contracting partners will respect general norms create substantial scope for flexibility beyond contract in the form of ad hoc understandings, give and take etc."
41. See Wolfgang Streeck, "Production Constraints: On the Institutional Conditions of Diversified Quality Production," in Social Institutions and Economic Performance: Studies of Industrial Relations in Advanced Capitalist Economies, ed. Wolfgang Streeck (London: Sage Ltd., 1992), 1-41; also Alessandro Arrighetti, Reinhard Bachmann, and Simon Deakin, "Contract Law, Social Norms and Inter-Firm Cooperation," Cambridge Journal of Economics 21 (1997): 189: "The stability of the underlying relationships, and the expectation that potential contracting partners will respect general norms create substantial scope for flexibility beyond contract in the form of ad hoc understandings, give and take etc."
42. Hardin, Trust and Trustworthiness.
43. See Knight, "Social Norms and the Rule of Law: Fostering Trust in a Socially Diverse Society," in Trust in Society, 354-73, for an extended discussion of the requirements of such an explanation.
44. See Knight, Institutions and Social Conflict, chap. 3, for a more developed account of the effects of social institutions on social expectations and beliefs.
45. We note that compliance with the institutions in a given community may sometimes give rise to untrustworthy behavior and thus to generalized distrust rather than to trust. This may be true of Southern Italy, both historically and in the present; see, for example, Anthony Pagden, "The Destruction of Trust and Its Economic Consequences in the Case of Eighteenth Century Naples," in Trust: Making and Breaking Cooperative Relations, ed. Diego Gambetta (Oxford: Basil Blackwell, 1988), 127-41; Diego Gambetta, "Mafia: The Price of Distrust," in Trust: Making and Breaking Cooperative Relations, 158-75. The logic of this mechanism is precisely analogous with that of the one that we have identified, even if the effects are the reverse.
46. We note that compliance with the institutions in a given community may sometimes give rise to untrustworthy behavior and thus to generalized distrust rather than to trust. This may be true of Southern Italy, both historically and in the present; see, for example, Anthony Pagden, "The Destruction of Trust and Its Economic Consequences in the Case of Eighteenth Century Naples," in Trust: Making and Breaking Cooperative Relations, ed. Diego Gambetta (Oxford: Basil Blackwell, 1988), 127-41; Diego Gambetta, "Mafia: The Price of Distrust," in Trust: Making and Breaking Cooperative Relations, 158-75. The logic of this mechanism is precisely analogous with that of the one that we have identified, even if the effects are the reverse.
47. Peter A. Hall and Rosemary C. R. Taylor, "Political Science and the Three New Institutionalisms," Political Studies 44 (1996): 936-57; Richard Swedberg and Mark Granovetter, "Introduction," in The Sociology of Economic Life, ed. Richard Swedberg and Mark Granovetter (Boulder, Colo.: Westview, 1992), 1-26; Knight, Institutions and Social Conflict; Joseph E. Stiglitz, "Formal and Informal Institutions," in Social Capital: A Multifaceted Perspective, ed. Parta Dasgupta and Ismail Serageldin (Washington, D.C.: World Bank, 1999), 59-68; Paul Pierson, "The Limits of Design: Explaining Institutional Origins and Change," Governance 13, no. 4 (2000): 475-99.
48. Peter A. Hall and Rosemary C. R. Taylor, "Political Science and the Three New Institutionalisms," Political Studies 44 (1996): 936-57; Richard Swedberg and Mark Granovetter, "Introduction," in The Sociology of Economic Life, ed. Richard Swedberg and Mark Granovetter (Boulder, Colo.: Westview, 1992), 1-26; Knight, Institutions and Social Conflict; Joseph E. Stiglitz, "Formal and Informal Institutions," in Social Capital: A Multifaceted Perspective, ed. Parta Dasgupta and Ismail Serageldin (Washington, D.C.: World Bank, 1999), 59-68; Paul Pierson, "The Limits of Design: Explaining Institutional Origins and Change," Governance 13, no. 4 (2000): 475-99.
49. Peter A. Hall and Rosemary C. R. Taylor, "Political Science and the Three New Institutionalisms," Political Studies 44 (1996): 936-57; Richard Swedberg and Mark Granovetter, "Introduction," in The Sociology of Economic Life, ed. Richard Swedberg and Mark Granovetter (Boulder, Colo.: Westview, 1992), 1-26; Knight, Institutions and Social Conflict; Joseph E. Stiglitz, "Formal and Informal Institutions," in Social Capital: A Multifaceted Perspective, ed. Parta Dasgupta and Ismail Serageldin (Washington, D.C.: World Bank, 1999), 59-68; Paul Pierson, "The Limits of Design: Explaining Institutional Origins and Change," Governance 13, no. 4 (2000): 475-99.
50. Peter A. Hall and Rosemary C. R. Taylor, "Political Science and the Three New Institutionalisms," Political Studies 44 (1996): 936-57; Richard Swedberg and Mark Granovetter, "Introduction," in The Sociology of Economic Life, ed. Richard Swedberg and Mark Granovetter (Boulder, Colo.: Westview, 1992), 1-26; Knight, Institutions and Social Conflict; Joseph E. Stiglitz, "Formal and Informal Institutions," in Social Capital: A Multifaceted Perspective, ed. Parta Dasgupta and Ismail Serageldin (Washington, D.C.: World Bank, 1999), 59-68; Paul Pierson, "The Limits of Design: Explaining Institutional Origins and Change," Governance 13, no. 4 (2000): 475-99.
51. Peter A. Hall and Rosemary C. R. Taylor, "Political Science and the Three New Institutionalisms," Political Studies 44 (1996): 936-57; Richard Swedberg and Mark Granovetter, "Introduction," in The Sociology of Economic Life, ed. Richard Swedberg and Mark Granovetter (Boulder, Colo.: Westview, 1992), 1-26; Knight, Institutions and Social Conflict; Joseph E. Stiglitz, "Formal and Informal Institutions," in Social Capital: A Multifaceted Perspective, ed. Parta Dasgupta and Ismail Serageldin (Washington, D.C.: World Bank, 1999), 59-68; Paul Pierson, "The Limits of Design: Explaining Institutional Origins and Change," Governance 13, no. 4 (2000): 475-99.
52. Gary J. Miller, "Rational Choice and Dysfunctional Institutions," Governance 13, no. 4 (2000): 535-47.
53. Knight, "Models, Interpretations and Theories" and "The Bases of Cooperation."
54. Knight, "Models, Interpretations and Theories" and "The Bases of Cooperation."
55. North, Institutions, Institutional Change; Williamson, The Economic Institutions of Capitalism.
56. North, Institutions, Institutional Change; Williamson, The Economic Institutions of Capitalism.
57. Knight, "The Bases of Cooperation."
58. These arguments are developed at greater length in Farrell, "Trust, Distrust and Power."
59. Gary J. Miller, Managerial Dilemmas: The Political Economy of Hierarchy (Cambridge: Cambridge University Press, 1992), 16.
60. I b i d.
61. Although "local economies" are now being found in the south and northeast of the country as well; see Luigi Burroni and Carlo Trigilia, "Italy: Economic Development through Local Economies," in Local Economies in Europe: Rise or Demise? ed. Colin Crouch (Oxford: Oxford University Press, 2002).
62. Oliver E. Williamson, Markets and Hierarchies: Analysis and Antitrust Implications (New York: Free Press, 1975); Oliver Williamson, "The Economic Institutions of Capitalism."
63. Oliver E. Williamson, Markets and Hierarchies: Analysis and Antitrust Implications (New York: Free Press, 1975); Oliver Williamson, "The Economic Institutions of Capitalism."
64. Cooperation between final firms and subcontractors is discussed in more detail in Farrell, "Trust and Political Economy."
65. See, for example, Arnaldo Bagnasco, "Introduction: An Unexpected and Controversial Return," in Small and Medium-Size Enterprises, ed. Arnaldo Bagnasco and Charles F. Sabel (London: Pinter, 1995), 1-15; Carlo Trigilia, "II Distretto Industriale Di Prato," in Strategie Di Riaggiustamento Industriale, ed. Marino Regini and Charles F. Sabel (Bologna: II Mulino, 1989), 283-333; Bennett Harrison, "Industrial Districts: Old Wine in New Bottles?" Regional Studies 26, no. 5 (1992): 469-83; Charles F. Sabel, "Studied Trust: Building New Forms of Cooperation in a Volatile Economy," in Explorations in Economic Sociology, ed. Richard Swedberg (New York: Russell Sage, 1993), 104-44.
66. See, for example, Arnaldo Bagnasco, "Introduction: An Unexpected and Controversial Return," in Small and Medium-Size Enterprises, ed. Arnaldo Bagnasco and Charles F. Sabel (London: Pinter, 1995), 1-15; Carlo Trigilia, "II Distretto Industriale Di Prato," in Strategie Di Riaggiustamento Industriale, ed. Marino Regini and Charles F. Sabel (Bologna: II Mulino, 1989), 283-333; Bennett Harrison, "Industrial Districts: Old Wine in New Bottles?" Regional Studies 26, no. 5 (1992): 469-83; Charles F. Sabel, "Studied Trust: Building New Forms of Cooperation in a Volatile Economy," in Explorations in Economic Sociology, ed. Richard Swedberg (New York: Russell Sage, 1993), 104-44.
67. See, for example, Arnaldo Bagnasco, "Introduction: An Unexpected and Controversial Return," in Small and Medium-Size Enterprises, ed. Arnaldo Bagnasco and Charles F. Sabel (London: Pinter, 1995), 1-15; Carlo Trigilia, "II Distretto Industriale Di Prato," in Strategie Di Riaggiustamento Industriale, ed. Marino Regini and Charles F. Sabel (Bologna: II Mulino, 1989), 283-333; Bennett Harrison, "Industrial Districts: Old Wine in New Bottles?" Regional Studies 26, no. 5 (1992): 469-83; Charles F. Sabel, "Studied Trust: Building New Forms of Cooperation in a Volatile Economy," in Explorations in Economic Sociology, ed. Richard Swedberg (New York: Russell Sage, 1993), 104-44.
68. See, for example, Arnaldo Bagnasco, "Introduction: An Unexpected and Controversial Return," in Small and Medium-Size Enterprises, ed. Arnaldo Bagnasco and Charles F. Sabel (London: Pinter, 1995), 1-15; Carlo Trigilia, "II Distretto Industriale Di Prato," in Strategie Di Riaggiustamento Industriale, ed. Marino Regini and Charles F. Sabel (Bologna: II Mulino, 1989), 283-333; Bennett Harrison, "Industrial Districts: Old Wine in New Bottles?" Regional Studies 26, no. 5 (1992): 469-83; Charles F. Sabel, "Studied Trust: Building New Forms of Cooperation in a Volatile Economy," in Explorations in Economic Sociology, ed. Richard Swedberg (New York: Russell Sage, 1993), 104-44.
69. Gabi Dei Ottati, "Trust, Interlinking Transactions and Credit in the Industrial District," Cambridge Journal of Economics 18 (1994): 529-46; Edward H. Lorenz, "Trust, Community and Cooperation: Toward a Theory of Industrial Districts," in Pathways to Industrialization and Regional Development, ed. Michael Storper and Allen J. Scott (London: Routledge, 1992), 195-204.
70. Gabi Dei Ottati, "Trust, Interlinking Transactions and Credit in the Industrial District," Cambridge Journal of Economics 18 (1994): 529-46; Edward H. Lorenz, "Trust, Community and Cooperation: Toward a Theory of Industrial Districts," in Pathways to Industrialization and Regional Development, ed. Michael Storper and Allen J. Scott (London: Routledge, 1992), 195-204.
71. Michael Taylor, Community, Anarchy and Liberty (Cambridge: Cambridge University Press, 1982); Michael Taylor, The Possibility of Cooperation (Cambridge: Cambridge University Press, 1987). See Dei Ottati, "Trust, Interlinking Transactions and Credit," for a fruitful extension of Taylor's logic to subcontracting relationships within industrial districts.
72. Michael Taylor, Community, Anarchy and Liberty (Cambridge: Cambridge University Press, 1982); Michael Taylor, The Possibility of Cooperation (Cambridge: Cambridge University Press, 1987). See Dei Ottati, "Trust, Interlinking Transactions and Credit," for a fruitful extension of Taylor's logic to subcontracting relationships within industrial districts.
73. Michael Taylor, Community, Anarchy and Liberty (Cambridge: Cambridge University Press, 1982); Michael Taylor, The Possibility of Cooperation (Cambridge: Cambridge University Press, 1987). See Dei Ottati, "Trust, Interlinking Transactions and Credit," for a fruitful extension of Taylor's logic to subcontracting relationships within industrial districts.
74. Bengt Holmström and John Roberts, "The Boundaries of the Firm Revisited," Journal of Economic Perspectives 12, no. 3 (1998): 73-94; Miller, Managerial Dilemmas.
75. Bengt Holmström and John Roberts, "The Boundaries of the Firm Revisited," Journal of Economic Perspectives 12, no. 3 (1998): 73-94; Miller, Managerial Dilemmas.
76. Avner Greif, "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy 102, no. 5 (1994): 912-50; Michihiro Kandori, "Social Norms and Community Enforcement," Review of Economic Studies 59 (1992): 63-80; Calvert, "Rational Actors."
77. Avner Greif, "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy 102, no. 5 (1994): 912-50; Michihiro Kandori, "Social Norms and Community Enforcement," Review of Economic Studies 59 (1992): 63-80; Calvert, "Rational Actors."
78. Avner Greif, "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy 102, no. 5 (1994): 912-50; Michihiro Kandori, "Social Norms and Community Enforcement," Review of Economic Studies 59 (1992): 63-80; Calvert, "Rational Actors."
79. Marco Bellandi, "Research Briefing: Innovation and Change in the Marshallian Industrial District," European Planning Studies 4, no. 3 (1996): 357-68. See Patrizio Bianchi, "Un Conteste Produttivo non Nasce dal Nulla: È Fatto di Conoscenze, Regole Sociali, Culture, Innovazioni, Finanziamenti," Scuolaofficina 93, no. 2 (1993): 5-8, for a similar formulation, and Dei Ottati, "Trust, Interlinking Transactions and Credit," for a discussion of the role of community "norms" in securing cooperation.
80. Marco Bellandi, "Research Briefing: Innovation and Change in the Marshallian Industrial District," European Planning Studies 4, no. 3 (1996): 357-68. See Patrizio Bianchi, "Un Conteste Produttivo non Nasce dal Nulla: È Fatto di Conoscenze, Regole Sociali, Culture, Innovazioni, Finanziamenti," Scuolaofficina 93, no. 2 (1993): 5-8, for a similar formulation, and Dei Ottati, "Trust, Interlinking Transactions and Credit," for a discussion of the role of community "norms" in securing cooperation.
81. Marco Bellandi, "Research Briefing: Innovation and Change in the Marshallian Industrial District," European Planning Studies 4, no. 3 (1996): 357-68. See Patrizio Bianchi, "Un Conteste Produttivo non Nasce dal Nulla: È Fatto di Conoscenze, Regole Sociali, Culture, Innovazioni, Finanziamenti," Scuolaofficina 93, no. 2 (1993): 5-8, for a similar formulation, and Dei Ottati, "Trust, Interlinking Transactions and Credit," for a discussion of the role of community "norms" in securing cooperation.
82. Sebastiano Brusco, "Small Firms and the Provision of Real Services," in Industrial Districts and Local Economic Regeneration, ed. Frank Pyke and Walter Sengenberger (Geneva: International Institute for Labour Studies, 1992), 182.
83. Knight, Institutions and Social Conflict, 54. Brusco emphasizes the importance of local tradition in creating an appropriate context for modern cooperation and argues that economistic approaches fail to grasp these traditions. Carlo Trigilia, Grande Partiti e Piccole Imprese: Comunisti e Democristiani Nelle Regioni a Economia Diffusa (Bologna: II Mulino, 1986), similarly stresses the importance of local "subcultures" in paving the way for industrial districts. Cultural factors of this sort may indeed play an important role in creating a context in which actors realize that certain forms of cooperation are possible and beneficial. Symbols and cultural beliefs may disclose or foreclose possibilities of action within a specific community, and thus affect actors' behavior and the institutions that arise from these interactions. Here, their role is anterior to the power relationships that we emphasize in our account; they may partially define the range of "possible" equilibria over which actors may bargain. For further development of these arguments, see the discussion in Jean Ensminger and Jack Knight, "Changing Social Norms: Common Property, Bridewealth, and Clan Exogamy," Current Anthropology (1997) 38, no. 1: 1-24; James Johnson, "Symbol and Strategy in Comparative Political Analysis," APSA-CP: Newsletter of the APSA Organized Section in Comparative Politics 8, no. 2 (1997): 6-9; Henry Farrell, "Constructing the International Foundations of E-Commerce: The EU-US Safe Harbor Arrangement," International Organization (forthcoming). We are grateful to Carlo Trigilia for reminding of us of the importance of these factors.
84. Knight, Institutions and Social Conflict, 54. Brusco emphasizes the importance of local tradition in creating an appropriate context for modern cooperation and argues that economistic approaches fail to grasp these traditions. Carlo Trigilia, Grande Partiti e Piccole Imprese: Comunisti e Democristiani Nelle Regioni a Economia Diffusa (Bologna: II Mulino, 1986), similarly stresses the importance of local "subcultures" in paving the way for industrial districts. Cultural factors of this sort may indeed play an important role in creating a context in which actors realize that certain forms of cooperation are possible and beneficial. Symbols and cultural beliefs may disclose or foreclose possibilities of action within a specific community, and thus affect actors' behavior and the institutions that arise from these interactions. Here, their role is anterior to the power relationships that we emphasize in our account; they may partially define the range of "possible" equilibria over which actors may bargain. For further development of these arguments, see the discussion in Jean Ensminger and Jack Knight, "Changing Social Norms: Common Property, Bridewealth, and Clan Exogamy," Current Anthropology (1997) 38, no. 1: 1-24; James Johnson, "Symbol and Strategy in Comparative Political Analysis," APSA-CP: Newsletter of the APSA Organized Section in Comparative Politics 8, no. 2 (1997): 6-9; Henry Farrell, "Constructing the International Foundations of E-Commerce: The EU-US Safe Harbor Arrangement," International Organization (forthcoming). We are grateful to Carlo Trigilia for reminding of us of the importance of these factors.
85. Knight, Institutions and Social Conflict, 54. Brusco emphasizes the importance of local tradition in creating an appropriate context for modern cooperation and argues that economistic approaches fail to grasp these traditions. Carlo Trigilia, Grande Partiti e Piccole Imprese; Comunisti e Democristiani Nelle Regioni a Economia Diffusa (Bologna: II Mulino, 1986), similarly stresses the importance of local "subcultures" in paving the way for industrial districts. Cultural factors of this sort may indeed play an important role in creating a context in which actors realize that certain forms of cooperation are possible and beneficial. Symbols and cultural beliefs may disclose or foreclose possibilities of action within a specific community, and thus affect actors' behavior and the institutions that arise from these interactions. Here, their role is anterior to the power relationships that we emphasize in our account; they may partially define the range of "possible" equilibria over which actors may bargain. For further development of these arguments, see the discussion in Jean Ensminger and Jack Knight, "Changing Social Norms: Common Property, Bridewealth, and Clan Exogamy," Current Anthropology (1997) 38, no. 1: 1-24; James Johnson, "Symbol and Strategy in Comparative Political Analysis," APSA-CP: Newsletter of the APSA Organized Section in Comparative Politics 8, no. 2 (1997): 6-9; Henry Farrell, "Constructing the International Foundations of E-Commerce: The EU-US Safe Harbor Arrangement," International Organization (forthcoming). We are grateful to Carlo Trigilia for reminding of us of the importance of these factors.
86. Knight, Institutions and Social Conflict, 54. Brusco emphasizes the importance of local tradition in creating an appropriate context for modern cooperation and argues that economistic approaches fail to grasp these traditions. Carlo Trigilia, Grande Partiti e Piccole Imprese; Comunisti e Democristiani Nelle Regioni a Economia Diffusa (Bologna: II Mulino, 1986), similarly stresses the importance of local "subcultures" in paving the way for industrial districts. Cultural factors of this sort may indeed play an important role in creating a context in which actors realize that certain forms of cooperation are possible and beneficial. Symbols and cultural beliefs may disclose or foreclose possibilities of action within a specific community, and thus affect actors' behavior and the institutions that arise from these interactions. Here, their role is anterior to the power relationships that we emphasize in our account; they may partially define the range of "possible" equilibria over which actors may bargain. For further development of these arguments, see the discussion in Jean Ensminger and Jack Knight, "Changing Social Norms: Common Property, Bridewealth, and Clan Exogamy," Current Anthropology (1997) 38, no. 1: 1-24; James Johnson, "Symbol and Strategy in Comparative Political Analysis," APSA-CP: Newsletter of the APSA Organized Section in Comparative Politics 8, no. 2 (1997): 6-9; Henry Farrell, "Constructing the International Foundations of E-Commerce: The EU-US Safe Harbor Arrangement," International Organization (forthcoming). We are grateful to Carlo Trigilia for reminding of us of the importance of these factors.
87. Knight, Institutions and Social Conflict, 54. Brusco emphasizes the importance of local tradition in creating an appropriate context for modern cooperation and argues that economistic approaches fail to grasp these traditions. Carlo Trigilia, Grande Partiti e Piccole Imprese; Comunisti e Democristiani Nelle Regioni a Economia Diffusa (Bologna: II Mulino, 1986), similarly stresses the importance of local "subcultures" in paving the way for industrial districts. Cultural factors of this sort may indeed play an important role in creating a context in which actors realize that certain forms of cooperation are possible and beneficial. Symbols and cultural beliefs may disclose or foreclose possibilities of action within a specific community, and thus affect actors' behavior and the institutions that arise from these interactions. Here, their role is anterior to the power relationships that we emphasize in our account; they may partially define the range of "possible" equilibria over which actors may bargain. For further development of these arguments, see the discussion in Jean Ensminger and Jack Knight, "Changing Social Norms: Common Property, Bridewealth, and Clan Exogamy," Current Anthropology (1997) 38, no. 1: 1-24; James Johnson, "Symbol and Strategy in Comparative Political Analysis," APSA-CP: Newsletter of the APSA Organized Section in Comparative Politics 8, no. 2 (1997): 6-9; Henry Farrell, "Constructing the International Foundations of E-Commerce: The EU-US Safe Harbor Arrangement," International Organization (forthcoming). We are grateful to Carlo Trigilia for reminding of us of the importance of these factors.
88. The findings reported here are the results of interviews carried out by Ann-Louise Lauridsen and Henry Farrell in spring/summer 1999 in Bologna. Seventeen firms in Bologna were interviewed, as well as twenty-three actors with knowledge of the local economy. The authors are deeply grateful to Ann-Louise Lauridsen for her indispensable part in gathering this data and for subsequent discussions relevant to the themes of this article. Ulrich Glassmann also participated in several of the interviews and played an important role. These interviews were carried out in the context of a four-country project on the "Governance of Local Economies," directed by Colin Crouch, Patrick Le Gales, Carlo Trigilia, and Helmut Voelzkow. We wish to acknowledge our gratitude to these scholars, as well as to others involved in the project, most especially Luigi Burroni.
89. These institutions are discussed at greater length in Farrell, "Trust and Political Economy."
90. The almost untranslatable expletive beh! has been translated in the most neutral and general formulation possible. Other equally valid translations might be "So much for him!" or "So much for that!"
91. See Farrell, "Trust and Political Economy," for a more detailed discussion.
92. As we note, much previous literature on industrial districts has been hostile to the rational choice perspective. However, we suggest that the more recent theoretical developments that we seek to build on offer a more nuanced understanding of industrial districts than simple economistic explanations and a greater possibility of fruitful dialogue with nonrational choice approaches. Indeed, there is much common ground between our arguments and sociological arguments, such as those in Arnaldo Bagnasco, "Teoria Del Capitale Sociale e Political Economy Comparata," Stato e Mercato, no. 3 (1999): 351-72, and Carlo Trigilia, "Capitale Sociale e Sviluppo Locale," Stato e Mercato, no. 3 (1999): 419-40, both of which criticize much work in the political culture and social capital tradition for its oversocialized explanation of human behavior. We specifically refrain from imperialistic claims that rational choice theory can provide a complete account of human behavior in industrial districts, or indeed in other social contexts. Rather, our account is intended to contribute to emerging discussions between rational choice and nonrational choice accounts of human action.
93. As we note, much previous literature on industrial districts has been hostile to the rational choice perspective. However, we suggest that the more recent theoretical developments that we seek to build on offer a more nuanced understanding of industrial districts than simple economistic explanations and a greater possibility of fruitful dialogue with nonrational choice approaches. Indeed, there is much common ground between our arguments and sociological arguments, such as those in Arnaldo Bagnasco, "Teoria Del Capitale Sociale e Political Economy Comparata," Stato e Mercato, no. 3 (1999): 351-72, and Carlo Trigilia, "Capitale Sociale e Sviluppo Locale," Stato e Mercato, no. 3 (1999): 419-40, both of which criticize much work in the political culture and social capital tradition for its oversocialized explanation of human behavior. We specifically refrain from imperialistic claims that rational choice theory can provide a complete account of human behavior in industrial districts, or indeed in other social contexts. Rather, our account is intended to contribute to emerging discussions between rational choice and nonrational choice accounts of human action.
94. Gabi Dei Ottati, "The Remarkable Resilience of the Industrial Districts of Tuscany," in Local and Regional Response to Global Pressure: The Case of Italy and Its Industrial Districts, ed. Francesco Cossentino, Frank Pyke, and Werner Sengenberger (Geneva: International Institute for Labour Studies, 1996), 37-66; Sebastiano Brusco et al., "The Evolution of Industrial Districts in Emilia-Romagna," in Local and Regional Response to Global Pressure, 17-36.
95. Gabi Dei Ottati, "The Remarkable Resilience of the Industrial Districts of Tuscany," in Local and Regional Response to Global Pressure: The Case of Italy and Its Industrial Districts, ed. Francesco Cossentino, Frank Pyke, and Werner Sengenberger (Geneva: International Institute for Labour Studies, 1996), 37-66; Sebastiano Brusco et al., "The Evolution of Industrial Districts in Emilia-Romagna," in Local and Regional Response to Global Pressure, 17-36.
96. Maura Franchi and Vittorio Rieser, "Le Categorie Sociologiche Nell'Analisi Del Distretto Industriale: Tra Comunità e Razionalizzazione," Stato e Mercato, no. 33 (1991): 451-76.
97. For further information on Carpi, see Philip Cooke and Kevin Morgan, The Associational Economy: Firms, Regions and Innovation (Oxford: Oxford University Press, 1998); Mark Lazerson, "Factory or Putting-Out? Knitting Networks in Modena," in The Embedded Firm: On the Socioeconomics of Industrial Networks, ed. Gernot Grabher (London: Routledge, 1993), 203-26.
98. For further information on Carpi, see Philip Cooke and Kevin Morgan, The Associational Economy: Firms, Regions and Innovation (Oxford: Oxford University Press, 1998); Mark Lazerson, "Factory or Putting-Out? Knitting Networks in Modena," in The Embedded Firm: On the Socioeconomics of Industrial Networks, ed. Gernot Grabher (London: Routledge, 1993), 203-26.
99. Philip Cooke and Kevin Morgan, "Growth Regions Under Duress: Renewal Strategies in Baden Württemberg and Emilia-Romagna," in Globalization, Institutions and Regional Development in Europe, ed. Ash Amin and Nigel Thrift (Oxford: Oxford University Press, 1994), 91-117, speaks more directly to the power struggles involved in this set of changes. We do not wish to argue that the Citera system was not an instance of successful collective adaptation, rather to suggest that students of industrial districts, even if they are more interested in the conditions for economic success than debates in institutional theory, should pay closer attention to the frequently conflictual interactions through which adaptation (or in some cases lack of adaptation) takes place. We note that some sociologists (e.g., Paul Hirst and Jonathan Zeitlin, "Flexible Specialization versus Post-Fordism: Theory, Evidence, and Policy Implications" in Pathways to Industrialization and Regional Development, ed. Michael Storper and Allen J. Scott [London: Routledge, 1992], 70-115) have explicitly argued that adaptation in industrial districts is often conflictual, but that this perspective has not very often been taken up in empirical work. For an important and valuable exception, see Richard M. Locke, Remaking the Italian Economy (Ithaca: Cornell University Press, 1995).
100. Philip Cooke and Kevin Morgan, "Growth Regions Under Duress: Renewal Strategies in Baden Württemberg and Emilia-Romagna," in Globalization, Institutions and Regional Development in Europe, ed. Ash Amin and Nigel Thrift (Oxford: Oxford University Press, 1994), 91-117, speaks more directly to the power struggles involved in this set of changes. We do not wish to argue that the Citera system was not an instance of successful collective adaptation, rather to suggest that students of industrial districts, even if they are more interested in the conditions for economic success than debates in institutional theory, should pay closer attention to the frequently conflictual interactions through which adaptation (or in some cases lack of adaptation) takes place. We note that some sociologists (e.g., Paul Hirst and Jonathan Zeitlin, "Flexible Specialization versus Post-Fordism: Theory, Evidence, and Policy Implications" in Pathways to Industrialization and Regional Development, ed. Michael Storper and Allen J. Scott [London: Routledge, 1992], 70-115) have explicitly argued that adaptation in industrial districts is often conflictual, but that this perspective has not very often been taken up in empirical work. For an important and valuable exception, see Richard M. Locke, Remaking the Italian Economy (Ithaca: Cornell University Press, 1995).
101. Philip Cooke and Kevin Morgan, "Growth Regions Under Duress: Renewal Strategies in Baden Württemberg and Emilia-Romagna," in Globalization, Institutions and Regional Development in Europe, ed. Ash Amin and Nigel Thrift (Oxford: Oxford University Press, 1994), 91-117, speaks more directly to the power struggles involved in this set of changes. We do not wish to argue that the Citera system was not an instance of successful collective adaptation, rather to suggest that students of industrial districts, even if they are more interested in the conditions for economic success than debates in institutional theory, should pay closer attention to the frequently conflictual interactions through which adaptation (or in some cases lack of adaptation) takes place. We note that some sociologists (e.g., Paul Hirst and Jonathan Zeitlin, "Flexible Specialization versus Post-Fordism: Theory, Evidence, and Policy Implications" in Pathways to Industrialization and Regional Development, ed. Michael Storper and Allen J. Scott [London: Routledge, 1992], 70-115) have explicitly argued that adaptation in industrial districts is often conflictual, but that this perspective has not very often been taken up in empirical work. For an important and valuable exception, see Richard M. Locke, Remaking the Italian Economy (Ithaca: Cornell University Press, 1995).
102. Nicola Bellini, interview by author, Pisa, May 1999.
103. Dei Ottati, "The Remarkable Resilience"; Brusco et al., "The Evolution of Industrial Districts."
104. Dei Ottati, "The Remarkable Resilience"; Brusco et al., "The Evolution of Industrial Districts."
105. On the history of the cluster, see Roberto Curti and Mauro Grandi, eds., Per Niente Fragile: Bologna Capitale Del Packaging [Not at All Fragile: Bologna, Capital of Packaging] (Bologna: Museo del Patrimonio Industriale, 1997); Vittorio Capecchi, "In Search of Flexibility: The Bologna Metalworking Industry, 1900-1992," in World of Possibilities: Flexibility and Mass Production in Western Industrialization, ed. Charles F. Sabel and Jonathan Zeitlin (Cambridge: Cambridge University Press, 1997), 381-418.
106. On the history of the cluster, see Roberto Curti and Mauro Grandi, eds., Per Niente Fragile: Bologna Capitale Del Packaging [Not at All Fragile: Bologna, Capital of Packaging] (Bologna: Museo del Patrimonio Industriale, 1997); Vittorio Capecchi, "In Search of Flexibility: The Bologna Metalworking Industry, 1900-1992," in World of Possibilities: Flexibility and Mass Production in Western Industrialization, ed. Charles F. Sabel and Jonathan Zeitlin (Cambridge: Cambridge University Press, 1997), 381-418.
107. The motivation for making packaging machines across more than one sector is to stabilize future income through making it less dependent on the changing fortunes of customers within a particular sector (such as pharmaceuticals or foods).
108. Harrison, "Industrial Districts."
109. See Knight, Institutions and Social Conflict; Russell Hardin, Collective Action (Baltimore: Johns Hopkins University Press, 1982); Mancur Olson, The Logic of Collective Action (New York: Schocken, 1968).
110. See Knight, Institutions and Social Conflict; Russell Hardin, Collective Action (Baltimore: Johns Hopkins University Press, 1982); Mancur Olson, The Logic of Collective Action (New York: Schocken, 1968).
111. See Knight, Institutions and Social Conflict; Russell Hardin, Collective Action (Baltimore: Johns Hopkins University Press, 1982); Mancur Olson, The Logic of Collective Action (New York: Schocken, 1968).
112. For further details, see Farrell, "Trust and Political Economy."
113. More generally, see Edward H. Lorenz, "Neither Friends nor Strangers: Informal Networks of Subcontracting in French Industry," in Trust: Making and Breaking Cooperative Relations, ed. Diego Gambetta (Oxford: Basil Blackwell, 1988), 194-210.
114. Colin Crouch et al., Local Economies in Europe: Rise or Demise (Oxford: Oxford University Press, 2001).
115. Note, however, that there is no implication in our argument that the domination of large firms is historically inevitable or necessarily permanent. Insofar as this dominance is a product of external factors (typically, changes in patterns of demand in final markets), it may be attenuated or reversed by future changes in these external conditions.
116. Bellini, interview.
117. On the potential role of government in strengthening weaker actors, see Knight, Institutions and Social Conflict.
118. Hardin, Trust and Trustworthiness; Avner Greif and David Laitin, "How Do SelfEnforcing Institutions Endogenously Change? Institutional Reinforcement and QuasiParameters," unpublished paper, offers some initial ways of coming to grips with positive feedback loops of this sort.
119. Hardin, Trust and Trustworthiness; Avner Greif and David Laitin, "How Do SelfEnforcing Institutions Endogenously Change? Institutional Reinforcement and QuasiParameters," unpublished paper, offers some initial ways of coming to grips with positive feedback loops of this sort.