NEOINSTITUTIONAL THEORIES INTELLECTUAL BACKGROUND AND DIVERSITY

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NEO-INSTITUTIONAL THEORIESINTELLECTUAL
BACKGROUND AND DIVERSITY

• Marie-Laure DJELIC
• ESSEC Business School

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NEO-INSTITUTIONAL THEORIES

• A common central argument
• A shared reaction and criticism
• Significant diversity
• Sociology
• Economy
• Political sciences
• Recent attempts at discussion and
  cross-fertilization

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A COMMON CENTRAL ARGUMENT

• Economic action does not take place within an
  isolated and autonomous sphere
• Economic action is inscribed, embedded into a
  much broader  institutional  environment
• Economic action is set within contextual rules of
  the game
• That reflect time, history
• And are human and social constructs, not a
  natural and  given  reality

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SHARED REACTION AND CRITICISM

• Of classical and neoclassical economics, of
  rational choice theories and in particular of the
  three following assumptions
• There is an historical if not a moral
  pre-eminence of the economic sphere over other
  spheres of social action (in the state of nature,
  man is an homo oeconomicus the social contract
  comes later key assumption of economic
  liberalism)
• There is an autonomy of the economic sphere. This
  sphere is structured by  natural laws  that are
  universal (ie. not historical nor contextual)
  division of labor and natural tendency to trade
  and barter, competition, invisible hand.
• There is fully independent and decontextualized
  agency and actorhood with a natural and
  universal notion of rationality

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A GREAT DIVERSITY

• Three main disciplinary ancestors
• Sociology
• Economy
• Political science
• With variation across disciplinary legacies but
  also within
• Neo-institutionalism in contrast to old
  institutionalism
• Recent attempts at hybridization and
  cross-fertilization

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GENEALOGY
Max Weber
German Historicism
John Burgess, Westal Willoughby
Veblen, Commons, Mitchell
Durkheim
Selznick,  old  institutionalism
 Young  Marx
Political Science Nee, Thelen, Peter Hall.
North, Williamson, Heterodox economics US.
NBS Voc
Ecole de la régulation
West Coast Meyer et al... Di Maggio et al
East Coast Skocpol et al
Scandinavian Institutionalism, Campbell, Djelic,
Dobbin
Quack, Morgan, Sorge
Coordination in part through the Max Planck
Institute
Recent attempts at cross-fertilization
Avner Greif
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GERMAN HISTORICAL SCHOOL

• Rejects the idea of universal theoretical systems
  and laws
• Economic laws are contingent upon the particular
  historical, social and institutional context in
  which economic action is embedded
• Descriptive historicism and methods
• Normative historicism and the problem of change.
  Consequence for the German economy
• Methodenstreit

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GERMAN HISTORICAL SCHOOL

• Man, in the eyes of the historical or realistic
  school is not merely an exchanging animalwith
  a single unvarying interest, removed from all the
  real conditions of time and place a
  personification of an abstraction he is the
  actual human beinghistory and surrounding
  circumstances have made him, with all his wants,
  passions and infirmities.
• (Cliffe, Reviewing Roschers The History of
  German Political Economy, Fortnightly Review,
  1875)

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OLD INSTITUTIONALISM IN ECONOMICS AND POLITICAL
SCIENCE

• Impact of German historicism and institutional
  entrepreneurship
• Refusal of universalizing perspectives
• Searched for an explanation to the contingency of
  economic arrangements and behaviours role of
  (social) institutions with an increasing
  disregard for the historical dimension
• Importance still granted to empirical facts and
  case studiesbut theorization also became
  increasingly important
• Old American institutionalism took distance from
  and criticized a certain form of stasis and
  conservatism associated with the German
  historical school
• Looked instead for mechanisms generating change
  and adaptation processual explanations of
  origins, growth and variation of institutions
• While German historicism implied a reflection on
  societal issues and the consideration of
  conflicts of interests, power plays, issues of
  preference formation, this disappeared from
  American old institutionalism in economics and
  political science in particular (Veblen an
  exception)

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AMERICAN ECONOMIC ASSOCIATION 1885

• We regard the state as an agency whose positive
  assistance is one of the indispensable conditions
  of human progress
• We believe that political economy as a science is
  still in an early stage of its development. While
  we appreciate the work of former economists, we
  look not as much to speculation as to the
  historical and statistical study of actual
  conditions of economic life for the satisfactory
  accomplishment of that development
• We hold that the conflict of labor and capital
  has brought into prominence a vast number of
  social problems, whose solution requires the
  united effort, each in its own sphere, of the
  church, of the state and of science
• In the study of the industrial and commercial
  policy of governments, we take no partisan
  attitude. We believe in a progressive development
  of economic conditions, which must be met by a
  corresponding development of legislative policy

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• Economists of what may be called the elder line
  of the historical school can scarcely be said to
  cultivate a science at all, their aim being not
  theoretical work at all  (Veblen 190171-2)

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OLD INSTITUTIONALISM IN SOCIOLOGY - SELZNICK

• Selznick to "institutionalize (means) to infuse
  with values beyond the technical requirements of
  the task at hand.
• Social and contingent embeddedness. Skepticism
  toward rational-actor models of organization.
  Stress the role of the environment and of culture
  in shaping organizational reality
• Great focus on change and its mechanisms (and
  agency) no social process can be understood
  save as it is located in the behaviour of
  individuals and especially in their perceptions
  of themselves and each other. The problem is to
  link the larger view to the more limited one, to
  see how institutional change is produced by, and
  in turn shapes, the interaction of individuals in
  day-to-day situations (Selznick 19574).
• Highly political in its analysis of group
  conflict and organizational strategy.

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DiMaggio and Powell, Intro to Powell and
DiMaggio, 1991 13
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INSTITUTIONS DEFINITIONS

• Selznick to "institutionalize (means) to infuse
  with values
• North self-interested actors make decisions and
  create institutions they believe most efficient
  in a particular situation. Rational rules of the
  game.
• Meyer Institutions or "wider cultural and
  symbolic patterns shap(e) organizations bringing
  about organizational isomorphism the world over
• Historical neo-institutionalists define the
  institutional environment as an essentially
  material framework, made up of organizations and
  formal rules, and they insist on the particular
  significance of states

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ZOOM SOCIOLOGICAL NEO-INSTITUTIONALISM
Organizational institutionalism
East Coast Skocpol et al
West Coast Meyer et al
NBS, VoC
Recent attempts at cross-fertilization and
hybridization