With those formalistic assumptions political science could not function very well in less developed countries, or countries that lacked the constitutional structures common in Western countries (Almond and Coleman, 1960). Their argument is that the rules that define an institution are the best mechanism for integrating the two forms of rationality. 15. Given the adaptive model proposed, however, they will have repeated opportunities to adjust their behavior. As in political science there has been some reaction against the individualistic assumptions of contemporary micro-economic theory and a desire by some major scholars to understand the effects that larger, seemingly amorphous, structures exert over the behavior of presumably autonomous, rational individuals. B. One exception to this generalization is some game-theoretic analysis that assumes that institutions can learn across time and are 'path dependent' (Arthur, 1988), very much like the assumptions guiding historical institutionalism in political science. Further, the formalism tended to make political science more ethnocentric than it had to be (Macridis, 1955). These scholars did point to many factors that now motivate contemporary institutionalist analysis, even if not in an explicitly theoretical manner. What the rational choice approach does tend to deny is that the institutions play any significant role in shaping preferences of the participants. This is my own area of interest and expertise, and it is also the discipline within which most of the serious discussions and debates of these theoretical issues have taken place. This reliance on the emergence of a new set of institutions appears to beg the usual functionalist question, however, of how this adaptation will take place. This concentration on the formal aspects of political systems was the source of another of the critiques of the more 'modem' scholars of political science. It can be argued that in normative institutions individuals are assumed to acquire the same values in an institution and hence behave in certain ways, while in the rational choice version they all have ab initio the tendency to maximize personal utility and therefore respond similarly to incentives. Hall did not refer to 'historical institutionalism' per se, but he did point to the importance of institutions in shaping policies over time. Institutional theory plays a significant role in contemporary political science. These tend to be exogenous and determined prior to participation, something which would be denied vigorously by institutionalists. 10. One is an analysis of administrative traditions in the industrialized democracies. If this game is played only once then defection and non-compliance is usually relatively costless for any participant; he or she can win by any means available and there is no opportunity for reprisal. This importance of compliance is also true for some versions of the rational choice perspectives in institutions, e.g. These attributes include: Concern with Theory and Methodology, Anti-Normative Bias, Assumptions of Individualism, and 'Inputism.' Guy Peters, Maurice Falk Professor of Government, University of Pittsburgh, US. It is strong on providing explanations for behavior within existing sets of rules than it is in explaining the processes through which those rules are created. ing the formation of rules may say a good deal about their presumed effects, and therefore about what the rules really 'mean.' There was, however, relatively little of the 'middle range' thinking (LaPalombara, 1968) that has been crucial for the subsequent development of comparative politics. This process is experimental and the keywords may be updated as the learning algorithm improves. being well beyond my capabilities. Despit~ those critiques, March and Olsen and their theoretical perspectives h~_~da- ~resh"~p~J!!~~_~~"~~"~f_.!~~_~~~~?~!~~",~_S~?_t.~!E.p-gt~:rY.-1?o.!i.~~~1.". SUMMARY A simplistic characterization of rational choice theory would not see any place for institutions in the approach. Institutional theory and political economy - Bob Jessop 11. Verified email at pitt.edu - Homepage. It is very difficult to find any situation in which individuals could be said not to be acting rationally in the context of some possible set of incentives or another. The theory posits that there is a problem of ensuring that organizations, as well as individual bureaucrats, will comply with the wishes of political leaders. LC�����ǟww��m�[� For these scholars the basic point of analytic departure is the choices that are made early in the history of any policy, or indeed of any governmental system. Institutional Theory in Political Science: The 'new Institutionalism', , B. It is important to note here the extent to which some contemporary 'management gurus,' most notably Peters and Waterman (1982), assume that the best way to change behavior of firms in the private sector is to change their values; they further assume that those changes are relatively easy to bring about. 13. The rationality component of the behavior in this form of institutionalism becomes apparent in two ways. Rational choice institutionalists might argue, however, that this voting standard is rational rather than merely traditional (Buchanan and Tullock, 1962). While Wilson may have been fighting against the perceived negative effects of partisanship in the United States, mass political participation was only at the beginning stages in all but a few European countries at that time. NOTES 1. Hall made a clear statement that policies at anyone time are influenced by policy choices made earlier, but was relatively less clear about the institutional nature of those choices. For example, in comparative politics - the area most akin to the old institutionalism - structural functionalism (Almond and Coleman, 1960; Almond and Powell, 1967) was a major candidate for theoretical domination. Our partners will collect data and use cookies for ad personalization and measurement. Comparative Politics provides a comprehensive, theoretical, and methodological introduction to the field of comparative politics. RATIONAL CHOICE THEORY AND INSTITUTIONAL THEORY 55 This is a highly functionalist explanation for the emergence of institutions, leaving aside almost entirely the necessity for human agency. First, organizations of this sort can constrain the competitive behavior of their competitors and produce a relatively level playing field for all actors. Structuralism A second dominant assumption of the old institutionalism was that structure mattered, and indeed that structure determined behavior. 4. The decision-makers in the scheme remain individuals seeking to maximize their utilities. 14 38 INSTITUTIONAL THEORY IN POLITICAL SCIENCE Institutional Design If there is a well-developed conception of change in the normative perspective on institutions, the capacity of that version of institutionalism to comprehend and guide the design of institutions appears extremely weak. A Common Set of Assumptions. Some use very conventional categories such as the difference between presidential and parliamentary 20 INSTITUTIONAL THEORY IN POLmCAL SCIENCE government (Weaver and Rockman, 1993), while others use most analytic categories such as 'decision points' (Immergut, 1992a). Guy Peters, Continuum, 2005, 0826479839, 9780826479839, 195 pages. Without those rules the policy area would degenerate into something of the egoistic free-riding and defection conceptualized by Olson. 4. This is, in fact, a more benign view of legislators than is seen in other rational choice models of legislative behavior. Although perhaps less controversial, there has been some revival of explicit institutional theorizing in sociology. s Further, in this conception of the State, law is very much a formal institution of governing, developing and imposing a set of clearly articulated norms and values for the society. Institutions do not appear automatically because they are needed, but must be created (but see Sugden, 1986). Institutional theory plays a significant role in contemporary political science. From the perspective of rationality, institutions provide a stable means of making choices in what would otherwise be an extremely contentious political environment. Neither of these views provides an unambiguous definition of these questions, but they do point to significant features of institutions that require further research. In some way the routines define the nature of the organization - police departments will have different routines than do fire departments, although both are in the 'public safety' business (see McCubbins and Schwartz, 1984). The rational choice literature on institutions has tended to concentrate on two types of institutions - the public bureaucracy and legislative committees - and the types of decision problems faced by those collective actors. Peters, B. Another element of the rationality of rule-based institutions comes somewhat closer to Olson's analysis of organizations and institutions. The argument was that if political science was to be a true science then it had to develop theory. Finally, we will be interested in Societal Institutionalism, an infelicitous phrase to describe the structuring of relationships between state and society. In this view the structure-agency problem is resolved through the individual accepted and interpreting the values of institutions. Clearly the guiding assumptions of the old institutionalists were those of embeddedness (Granovetter, 1985) and complexity rather than those of autonomy. This in turn implies a continuing dynamic process linking these two basic components of social theory, as well as a sense that institutions cannot really escape a means of linking individuals with the more formal elements of social life. Guy Peters 10. This is another statement of the fundamental analytic difference between variance theories and process (institutionalization) theories of institutions (Mohr, 1982). Some institutions, e.g. These initial policy choices, and the institutionalized commitments that grow out of them, are argued to determine subsequent decisions. W here political science has left the study of something so fundamental as institutions for rational choice and behaviouralism is a loss and therefore needs to be accommodated. This view could have some credibility in the two-party system of the United States (on which the arguments were based), but appears to fall apart when confronted with multi-party systems in which the parties have deep historical and ideological roots. Kenneth Arrow argued that mmost choice situations differences among individual preferences will prevent the formation of a social welfare function that can satisfy conditions such as transitivity of outcomes and non-imposition. the analysts may assume no significant differences, but the question does appear important. Additional Physical Format: Online version: Peters, B. Last, but certainly not least, is the deontological question: What is a good institution, and what normative criteria are embedded in the theory, whether explicitly or implicitly? Institutional Formation Once we know what an institution is, we must then ask how they come into being. March and Olsen argue that this 'central faith' decomposes all collective behavior into its smallest components and therefore leaves no room for any appreciable impact of the larger structures in society and the polity. The only route around that problem was the imposition of a decision by the authority of some dominant actor. 5. We pointed out above when discussing the initial formation of institutions that although there may be a design format in the consciousness of the founders, the nature of institutions in the March and Olsen model implies that this format may not actually be implemented. No matter how careful the selection of those individual members of the organization may be, there are almost certain to be some differences in values and perceptions. O n the first page of his book Institutional Theory in Political Science (2012), 1 B. Thus, in this view individual utility maximization is the source of explanation, but it is far from the normative standard it is sometimes argued to be by critics of rational choice approaches. Criticism has, however, also been made by scholars who might be expected to be more sympathetic with the general purposes of the theory THE ROOTS OF THE NEW INSTITUTIONALISM 39 but who believe that the theory as presented has some inherent flaws as a means of explaining political phenomena. This approach can make a strong claim that individuals are the appropriate focus for social and political analysis. What is an Institution? Institutional Theory in Political Science The New Institutionalism 3rd Edition by B. How do institutions change? As we have already pointed out, although this normative element of the March and Olsen theory is appealing, in many ways it also constitutes a serious weakness in theoretical terms, given that it may make the theory unfalsifiable. The job of the public servant is clearly defined by law, and their task is largely to apply the law to specific situations. If they decide to meet every Thursday afternoon at the same time and place, that would begin to take on the features of an institution. THE BEHAVIORAL AND THE RATIONAL REVOLUTIONS It is quite common to talk of the behavioral revolution which occurred during the 1950s and 1960s as fundamentally transforming the discipline of political science, and to a lesser extent other social sciences like sociology. These are happy assumptions but not ones necessarily borne out in fact. Table of Contents Contents: Preface to 4th edition 1. European conceptualizations of these relationships, including corporatism (Schmitter, 1974) and corporate pluralism (Rokkan, 1966), imply a more structured interaction betWeen ~ffi5.~~~~E'-.9-.~?tfi:~l~t~~~~,~~,~yern­ ance process, and hence they approadl insntiinonal status (see Chapter7). Further, even the harshest critics must admit that the blending of rational choice perspectives and a general institutional outlook on political life can supply a number of important insights into politics. 9. Scholars can acquire greater analytic leverage on some questions employing one or the other approach, but the macro-level analysis of institutionalists should be informed by the analysis of individual behavior produced in other areas within the discipline. property rights, and ways to make those rules more readily enforceable in order to obtain their desired outcomes (Moe, 1984). As in the garbage can preferences may change to correspond with what the institution has RATIONAL CHOICE THEORY AND INSTITUTIONAL THEORY 57 found that it can accomplish, and both the institution and the individuals change. This may at once speak to the power and flexibility of this approach to politics, as well as to its tendency to become all things to all people. A century later other scholars might look at the same system and see some of the same faults, but would tend to see them in terms of the way in which they functioned rather than their formal status within the constitution. The problem is that this model of evaluation is very central to the conceptualization and definition of an institution in the normative model. Sort. Buy B. As is so often the case in social science research, theoretical approaches that perform well on some criteria appear to perform poorly on others, so that the researcher wishing to choose one of these approaches to institutions will be forced to choose INSTITUTIONALISM OLD AND NEW 23 very wisely, and must know precisely what he or she wants to do when studying institutions. Indeed, in some cases the characterizations of these sub-approaches will be quite different. In particular, if the initial choices made by the formulators of a policy or institution are inadequate, institutions must find some means of adaptation or will cease to exist (see Genschel, 1997). Some aspects of the role may apply to all members of the institution, while other expectations will be specific to the position held by an individual. For example, the rule-based analysts think about ways to design superior rules, e.g. Institutions have their 'logics of appropriateness' that define what behavior is appropriate for members of the institution and which behavior is not. Several analytic questions that we have raised about all the various forms of institutionalism appear in an extreme version in this particular version. This is a rich array of literature, but that very richness presents a problem of understanding. Institutional Theory in Political Science by B Guy Peters starting at $13.60. The roots were there but had been largely abandoned by the rush to explain micro-level political behavior. Members of that institution violate those norms only at their peril, even though profit is presumed to be the dominant concern in this consequentialist arrangement. As well as altering the theoretical perspective of the discipline, this change in orientation also was associated with a growing concern for the appropriate use of rigorous research methods and an equally strong concern for more explicit construction of empirical political theory. that based on rules (see pp.48-9). For example, some of the major opposition to trucking and airline deregulation in the United States came from the affected industries themselves (Derthick and Quirk, 1985). Institu tional Theories The first of the approaches is that advanced by March and Olsen in their seminal article (1984) and then in a variety of other writings (1989; 1995). Further, if those people are all senators then the meeting may be relevant for our concern with institutions in political science. Institutional theory in political science: the new institutionalism B. Just as students of organizations have argued that one rule tends to beget another rule to compensate for the inadequacies of the first rule (March and Simon, 1957; Crozier, 1962), so too can institutional rules and structures generate attempts to solve the problems that they themselves have caused. The traditional manner of command and authority within the military simply was not effective in motivating and controlling a new cohort of young people raised possessing more participative and democratic values (Inglehart and Abramson, 1994). The critics of the old institutionalists argued that there were some less clearly stated and less obvious normative implications of the old institutionalism, and that these implications were not so positive as the concern for good government. Guy Peters. Sened (1991) provides perhaps the clearest explication of this endogenous, rational choice approach to institutions. Thus, for an analyst coming from the normative perspective on institutions the understandings reached when forming the rules m1=lY be as significant as the actual rules themselves. In L. Curini & R. Franzese The SAGE handbook of research methods in political science and international relations (Vol. In the principal-agent model of institutions rules are essentially 'meta-rules' about how to make fair and binding deals between those two sets of actors. Finally, the principal-agent model of institutions provides a very clear definition of institutions as structures of relationships between principals 54 INSTITUTIONAL THEORY IN POLITICAL SCIENCE and agents. Unless we engage in personification and assign the properties of humans to institutions then institutions must be the product of human action. One final consequence of the concentration on whole political systems was that it tended to make generalization, and therefore theory construction, more difficult. The actions of the State influenced society as much as society shaped politics. Rather, in an instihltional context, efficiency refers to the capacity of a political organization to map a set of preferences expressed by the public into a policy decision in a way that produces the least unacceptable decision. Predict is placed in quotation marks simply because prediction is a goal usually associated with the social scientific mode of research and thinking, rather than with the traditional research of the old institutionalists., The structuralism characteristic of the old institutionalism tended to focus on the major institutional features of political systems, e.g. 6. They become theories of institutions as the personal actions begin to produce actions by the institutions, with the institutions frequently becoming reified as rational actors themselves, rather than the reflections of the collective actions of the individuals within them. Further, the properties of any collectivities tend to be derived from the choices of the individuals, rather than vice versa, or even having the individuals also influenced by the norms, rules and values of the institutions. Institutional explanations had remained somewhat popular in policy and governance studies, but the institutionalists also have revived their use for explaining individual level behavior? Dunleavy (1991, pp.1-2) contrasts 'institutional public choice' with 'first principles public 44 INSTITUTIONAL THEORY IN POLITICAL SCIENCE choice,' but the fundamental logic is the same for both strands. Individual physicians must then make judgements about which set of values to follow. First, there must be THE ROOTS OF THE NEW INSTITUTIONALISM 33 some conscious decision to create an organization or institution for a specified purpose. On the contrary, utility maximization appears in a context in which individual behavior is something to be constrained and shaped, rather than something to be loosed upon others. Thus, in these models, the individual politician is expected to maneuver to maximize personal utilities, but his or her options are inherently constrained because they are operating within the rule set of one or more institutions. Some of the most egregious examples of dysfunctional cultures being perpetuated come from military organizations and the tendency of generals to fight the last war. Corporate Governance Political Science Political Theory Good Governance Informal Institution These keywords were added by machine and not by the authors. As noted above, political science emerged from distinctly normative roots, and the older institutionalists often linked their descriptive statements about politics with a concern for' good government.' These approaches to institutions also should be seen as complementary (Ostrom, 1990), even if the partisans of one or the other may often claim pride of place. 2 That path may be altered, but it requires a good deal of political pressure to produce that change. Finally, linkage between the institution and individuals can be achieved through change in the individuals being recruited into the institutions. A final point about the interactions of individual and institutions in the context of normative institutionalism is that institutions will attempt to reproduce themselves so that over time the institutions may harden their profile of values. Guy Peters Abstract: Political science has had a continuing debate over the need for, and existence of, a paradigm for the discipline. This difficulty in implementing a clear organizational design is probably true to some degree for all perspectives on organizational and institutional design, but the normative version of the theory appears to make this disappointing result almost inevitable. See Reichard, 1997. In addition, however, the institutional variants of the approach focus attention on the importance of institutions as mechanisms for channeling and constraining individual behavior. 19 Further, the relationship between political collectivities and their socio-economic environment should be reciprocal, with politics having the option of shaping society as much as society does of shaping politics. What can it do, and what can it not do? Thus, there has been a flowering of rational choice literature on political institutions, including legislatures (McCubbins and Sullivan, 1987; Shepsle and Weingast, 1995; Tsebelis and Money, 1997), cabinets (Laver and Schofield, 1990; Laver and Shepsle, 1995), and bureaucracies (Johnson and Libecap, 1994; Wood and Waterman, 1994). For both of these cases, as well as for students of the behavior of legislators (Wahlke, Eulau, Buchanan, and Ferguson, 1962),12 judges (Schubert, 1965), and administrators (Aberbach, Putnam, and Rockman, 1981), political life tended to be a function of other characteristics of the individual, but still an individualistic phenomenon. As might be expected, there have been a variety of different versions of just what that relationship should be, and those differences are to SOlne degree a function of different national perspectives on both law and governing. The argument in favor of an historical understanding of a country and its politics is hardly novel, and for most area-studies scholars would hardly be controversial, but it would be for some contemporary social scientists. For example, in one of the earliest statements of this approach, Anthony Downs (1957) assumed that politicians would maximize their utility by seeking to be re-elected. He is espe~--,concemed with the impact of Keynesianism and m~netarism on 'polic~ ~ese idea~ a~~~. These critics argued that this formalism first concealed important informal features of politics from the researchers, or made them assume that key functions of a government would have to be performed in the formally designated organization - parliaments make law and executives enforce it. 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