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Institutional theory

Institutional theory is a body of research in sociology, organizational studies, and related social sciences that analyzes how enduring institutions—comprising rules, norms, routines, and cognitive schemas—shape individual and collective behavior by establishing taken-for-granted expectations of legitimacy, often prioritizing conformity over instrumental efficiency.^[1]^[2] Emerging from early 20th-century "old" institutionalism focused on habitual patterns and evolving into neo-institutionalism in the 1970s, the theory gained prominence through works emphasizing institutional isomorphism, where organizations converge in form and practice due to coercive (regulatory), mimetic (uncertainty-driven imitation), and normative (professional) pressures.^[3]^[4] Key scholars including John W. Meyer, Paul DiMaggio, and Walter Powell demonstrated empirically how such dynamics explain the diffusion of "myths" and ceremonial structures in fields like education and public administration, where legitimacy secures resources and survival despite decoupling from core activities.^[3]^[5] While influential in accounting for organizational inertia and cross-national policy convergence, the framework faces critiques for tautological explanations of stability, insufficient attention to agency and contestation, and challenges in falsifiable empirical testing, prompting extensions toward endogenous change and multi-level analysis.^[6]^[7]

Definition and Core Concepts

Defining Institutions

In institutional theory, institutions are defined as the enduring rules, norms, and structures that organize and constrain human interaction across social, economic, and political domains, thereby reducing uncertainty and enabling coordinated behavior. These elements function as the "rules of the game" that actors follow, either explicitly or implicitly, to achieve stability and predictability in collective endeavors.^[8] Formal institutions encompass codified constraints such as laws, constitutions, and property rights, while informal institutions include customs, traditions, sanctions, and codes of conduct that evolve through repeated social practice.^[8] This distinction underscores how institutions emerge from human design and adaptation, structuring incentives and outcomes without requiring constant renegotiation.^[9] Economist Douglass North formalized this conception in 1991, describing institutions as "the humanly devised constraints that structure political, economic, and social interaction," consisting of both formal rules enforced by third parties and informal constraints shaped by cultural evolution.^[8] North emphasized their role in minimizing transaction costs—such as those from information asymmetry and enforcement—by providing frameworks that align individual actions with broader societal performance, as evidenced in historical analyses of economic growth where secure property rights correlated with per capita income rises of up to 0.7% annually in institutionally robust environments from 1960 to 1990.^[10] In contrast, sociological perspectives, as in works examining organizational isomorphism, view institutions as cognitive and normative templates that confer legitimacy through conformity to taken-for-granted cultural scripts, rather than purely efficiency-driven mechanisms.^[11] These templates persist because deviation incurs social costs, such as loss of status or resources, observed in empirical studies of firms adopting similar structures despite varying internal needs, with conformity rates exceeding 80% in sectors like higher education from the 1970s onward.^[12] Institutions thus operate through multiple pillars—regulative (coercive rules), normative (obligations and expectations), and cultural-cognitive (shared understandings)—interacting to reproduce social order over time.^[13] This multifaceted definition highlights causal mechanisms where institutions not only constrain choices but also constitute actors' identities and preferences, as seen in policy domains where entrenched norms delayed welfare reforms in European states by decades post-1980s fiscal pressures.^[14] Empirical validation comes from cross-national data showing that countries with aligned formal and informal institutions, such as Singapore's blend of legal enforcement and cultural trust, achieve GDP growth rates 2-3 times higher than those with misaligned systems, like post-colonial African nations, between 1960 and 2010.^[15]

Fundamental Mechanisms

Institutional theory identifies isomorphism as a primary mechanism through which organizations converge in structure, practices, and outputs, often prioritizing conformity over technical efficiency. Paul J. DiMaggio and Walter W. Powell, in their 1983 analysis, delineated three isomorphic pressures driving this homogenization: coercive, mimetic, and normative.^[16]^[17] Coercive isomorphism emerges from formal constraints imposed by entities on which organizations depend, such as regulatory mandates from governments or resource providers, compelling adoption of standardized policies to secure compliance or access.^[18] For example, corporations facing antitrust scrutiny may implement identical governance reforms to meet legal requirements, reducing variance across the field.^[19] Mimetic isomorphism activates under uncertainty, prompting organizations to replicate the models of successful or prominent peers as a risk-mitigation strategy, even absent direct evidence of superiority.^[20] This process accelerates during ambiguous conditions, like technological shifts, where firms observe and emulate industry leaders' innovations, fostering field-wide similarity without rigorous efficiency validation.^[21] Normative isomorphism, conversely, derives from professionalization dynamics, including isomorphic personnel flows through education, hiring, and networks that propagate shared norms and cognitive templates.^[22] Professional associations and certification bodies exemplify this, as seen in accounting firms converging on uniform auditing protocols via standardized training and mobility.^[23] Underlying these pressures is the pursuit of legitimacy, a perceptual alignment with institutional norms that enhances organizational survival by signaling appropriateness rather than efficacy.^[24] Mark C. Suchman (1995) categorizes legitimacy into pragmatic (audience-perceived self-interest), moral (congruence with ethical values), and cognitive (comprehensibility and inevitability) forms, with institutional conformity bolstering all three to buffer against scrutiny.^[25]^[26] Empirical evidence from organizational fields, such as U.S. higher education post-1960s, demonstrates how legitimacy-seeking via isomorphism yields structural uniformity—e.g., proliferation of administrative bureaucracies—despite persistent performance variances, as measured by decreased inter-organizational diversity in adoption rates.^[27] This often involves decoupling, where symbolic structures are ceremonially adopted to project legitimacy while core activities remain insulated, preserving operational flexibility amid institutional demands.^[28]

Historical Origins

Early Influences

The foundations of institutional theory trace back to late 19th- and early 20th-century thinkers in sociology and economics who challenged individualistic models by emphasizing enduring social structures, habits, and collective constraints on behavior.^[29] In economics, Thorstein Veblen laid groundwork through his critique of neoclassical assumptions, arguing in The Theory of the Leisure Class (1899) that economic actions stem from ingrained cultural habits and institutional patterns like conspicuous consumption, rather than innate utility maximization.^[30] Veblen's evolutionary perspective portrayed institutions as evolving through conflict and adaptation, influencing later views on institutional persistence and change via mechanisms such as exogenous shocks.^[31] Sociological precursors included Émile Durkheim, who in The Division of Labor in Society (1893) and The Rules of Sociological Method (1895) conceptualized "social facts" as external realities—norms, values, and collective representations—that coerce individual conduct, treating institutions as sui generis forces beyond personal agency.^[29] Similarly, Max Weber's analyses in The Protestant Ethic and the Spirit of Capitalism (1905) and Economy and Society (1922) highlighted how rational-legal authority, bureaucratic hierarchies, and legitimacy underpin modern institutions, shaping action through routinized practices and ideal types rather than mere economic incentives.^[29] John R. Commons extended economic institutionalism by focusing on "working rules" in The Legal Foundations of Capitalism (1924), viewing institutions as collective transaction processes enforced by legal and organizational norms to resolve conflicts in markets.^[32] These early contributions diverged from prevailing rational actor paradigms, prioritizing historical context, power dynamics, and cultural embeddedness—ideas from the German Historical School's emphasis on inductive, context-specific analysis also informed this shift, though American institutionalists like Veblen adapted them to critique industrial capitalism's predatory instincts.^[29] Karl Marx's materialist dialectics, emphasizing class-based institutions as tools of production relations, permeated these traditions, though later institutionalists tempered his revolutionary focus with stability and incremental evolution.^[29] Collectively, such works established institutions not as epiphenomenal but as causal drivers of social and economic order, setting the stage for formalized theory.^[3]

Mid-20th Century Foundations

Philip Selznick laid early groundwork for institutional theory in organization studies through his empirical examination of the Tennessee Valley Authority (TVA) in TVA and the Grass Roots: A Study in the Sociology of Formal Organization (1949), where he demonstrated how a technical agency transformed into an institution via co-optation—integrating external interests to preserve organizational integrity—and value infusion, embedding normative commitments that transcend instrumental goals.^[3] Selznick's analysis revealed organizations as adaptive structures prone to internal displacements of goals, where leadership must safeguard institutional character against efficiency-driven erosion, marking a shift from rational bureaucratic models to viewing institutions as value-laden entities with emergent properties.^[33] Building on this, Selznick's Leadership in Administration: A Sociological Interpretation (1957) formalized institutional leadership as the stewardship of values, distinguishing it from mere administrative control by emphasizing the promotion of organizational sovereignty through selective adaptation and the defense of core commitments against pluralistic pressures.^[34] This framework highlighted causal mechanisms like character formation, where repeated commitments create path-dependent stability, influencing later sociological institutionalism by prioritizing endogenous value dynamics over exogenous mimicry.^[35] Talcott Parsons contributed to institutional foundations via structural-functionalism in The Social System (1951), conceptualizing institutions as patterned, obligatory orientations to shared values that stabilize action through normative integration within the AGIL paradigm—adaptation, goal attainment, integration, and latency.^[36] Parsons posited institutionalization as the crystallization of expectations into durable roles backed by sanctions, enabling systemic equilibrium by aligning individual motivations with societal imperatives, though critics later noted its overemphasis on consensus amid evident conflicts.^[37] These mid-century works, grounded in case studies and systemic modeling, established institutions as resilient structures shaped by value commitments rather than purely rational calculation, bridging early institutional economics with emerging organizational sociology while underscoring leadership's role in causal processes of endurance and adaptation.^[29]

Major Theoretical Schools

Sociological Institutionalism

Sociological institutionalism, a strand of new institutionalism within sociology, posits that institutions comprise taken-for-granted norms, rules, and cultural-cognitive frameworks that constitute actors' identities and shape their behaviors beyond mere efficiency considerations.^[38] It emphasizes the socially constructed nature of reality, where organizations adopt structures and practices to gain legitimacy from their environments rather than optimize technical performance.^[39] This approach draws on the idea that institutional environments impose symbolic elements—such as myths and ceremonies—that organizations incorporate to appear rational and appropriate, even if these elements decouple from actual operations.^[40] Key foundational works emerged in the 1970s and 1980s, with John W. Meyer and Brian Rowan's 1977 article arguing that formal structures in organizations often reflect institutional myths rather than causal links to efficiency, leading to ceremonial conformity.^[41] Paul J. DiMaggio and Walter W. Powell advanced this in their 1983 paper "The Iron Cage Revisited," introducing the concept of isomorphism, whereby organizations in a field converge structurally through three mechanisms: coercive (from resource dependencies and regulations), mimetic (imitation during uncertainty), and normative (via professionalization and education).^[42] These processes, they contended, arise from uncertainty, resource dependencies, and professional networks, fostering homogeneity despite rational choice predictions of diversity.^[17] Empirical studies supporting these ideas include analyses of organizational fields, such as DiMaggio's examination of arts organizations in 19th-century Boston, where institutional pressures led to bureaucratization beyond functional needs.^[43] Applications extend to education and policy, where Meyer and colleagues documented global diffusion of similar educational models, attributing this to world-level cultural scripts rather than local adaptations.^[44] However, critics highlight methodological challenges, including difficulties in operationalizing vague concepts like "cultural-cognitive pillars" and overreliance on descriptive case studies with limited causal inference from quantitative data.^[45] Some analyses question the theory's capacity to explain endogenous change, as it prioritizes stability and diffusion over agency-driven disruption, potentially underestimating actors' strategic responses to institutional pressures.^[6] Despite these limitations, the framework has influenced organizational sociology by integrating cultural and symbolic dimensions into explanations of conformity, with evidence from cross-national comparisons showing persistent isomorphism in sectors like higher education amid varying economic contexts.^[41]

New Institutional Economics

New Institutional Economics (NIE) integrates institutional analysis into neoclassical economic frameworks to explain how rules, norms, and organizations influence economic behavior and outcomes. It emphasizes that institutions serve as the "rules of the game" that structure incentives, reduce uncertainty in human interaction, and shape transaction costs, thereby affecting resource allocation and long-term economic performance. Douglass North defined institutions as humanly devised constraints that evolve incrementally, often exhibiting path dependence due to historical contingencies and enforcement mechanisms. The approach contrasts with traditional neoclassical economics by incorporating bounded rationality, opportunism, and the costs of incomplete contracts, while rejecting the old institutional economics' descriptive focus in favor of formal modeling and testable hypotheses.^[46]^[47] NIE originated in the mid-20th century, with Ronald Coase's 1937 article "The Nature of the Firm" laying foundational groundwork by arguing that firms exist to minimize transaction costs in market exchanges, such as search, bargaining, and enforcement expenses. Oliver Williamson formalized transaction cost economics in works like Markets and Hierarchies (1975), coining the term "new institutional economics" around 1979 to highlight its analytical rigor and distinction from Veblen-era institutionalism, which lacked microeconomic foundations. Douglass North extended NIE to historical and comparative analysis, demonstrating in Institutions, Institutional Change and Economic Performance (1990) how secure property rights and low transaction costs correlate with sustained growth; for instance, England's Glorious Revolution of 1688 established credible commitments to property rights, enabling capital accumulation and industrialization, unlike absolutist regimes where rulers reneged on contracts, stifling investment. North received the 1993 Nobel Prize in Economics for this integration of institutions with transaction costs to explain divergent economic trajectories.^[48]^[49]^[50] Core mechanisms in NIE revolve around property rights—clearly defined and enforced allocations of decision-making authority—and their interaction with transaction costs to determine governance structures. Asset specificity, a key Williamson concept, arises when investments are tailored to particular transactions, increasing hold-up risks and favoring hierarchical organizations over markets to safeguard against opportunism. Empirically, NIE links institutional quality to performance: cross-country studies show that countries with strong rule of law and contract enforcement, as measured by indices like the World Bank's Ease of Doing Business (pre-2021), exhibit higher GDP per capita growth rates, with secure property rights explaining up to 70% of variance in investment levels across nations from 1960 to 2000. Critics within economics note NIE's emphasis on efficiency overlooks power dynamics, yet proponents counter that empirical evidence, such as post-colonial institutional persistence in Africa versus Asia, validates causal paths from colonial-era property rights to modern development disparities. Applications span firm-level decisions, where vertical integration reduces costs in high-specificity industries like automobiles, to policy, advocating reforms that align incentives, as in China's township-village enterprises post-1978, which leveraged informal institutions to spur growth amid weak formal property rights.^[51]^[52]^[53]

Historical Institutionalism

Historical institutionalism emerged in the late 1980s and early 1990s as a distinct approach within the broader new institutionalism, emphasizing the role of historical processes in shaping political and social outcomes. Unlike rational choice institutionalism, which prioritizes individual utility maximization, historical institutionalism views institutions as enduring legacies of specific temporal sequences and contingent events that constrain future possibilities.^[54] It gained prominence through comparative analyses of policy-making and state structures, arguing that institutions structure actors' goals, strategies, and power distributions over extended periods.^[55] Central to historical institutionalism is the concept of path dependence, which posits that early decisions or institutional arrangements generate self-reinforcing dynamics—such as increasing returns, positive feedback, or lock-in effects—that make deviation from established paths costly or improbable. For instance, once an institution is selected during a formative period, subsequent changes become constrained by sunk costs, network effects, and learning processes, leading to outcomes that may not be efficient but are persistent.^[56] Path dependence does not imply historical determinism; rather, it highlights how initial choices amplify over time, as seen in analyses of welfare state development where early policy designs resist reform despite changing economic conditions.^[57] Critical junctures represent pivotal moments of contingency when multiple institutional alternatives are viable, and actor choices set trajectories that endure due to subsequent path-dependent mechanisms. These junctures are characterized by heightened uncertainty and exogenous shocks—such as wars, economic crises, or regime shifts—that temporarily weaken institutional reproduction, allowing for rapid reconfiguration.^[58] Historical institutionalists, including James Mahoney and Kathleen Thelen, stress that such events explain divergences in institutional outcomes across similar starting conditions, as in comparative studies of democratization where timing of elite pacts determines long-term stability.^[59] Key contributions include the 1992 edited volume Structuring Politics: Historical Institutionalism in Comparative Analysis by Sven Steinmo, Kathleen Thelen, and Frank Longstreth, which formalized the approach through case studies of taxation, labor markets, and macroeconomic policy.^[55] Scholars like Paul Pierson advanced endogenous explanations of stability, critiquing exogenous shock models, while Theda Skocpol's work on state autonomy integrated historical sequences into analyses of revolutions and social policies.^[60] Recent refinements address gradual change processes, such as layering (additive reforms atop existing institutions) and drift (reinterpretation amid environmental shifts), challenging strict punctuated equilibrium models.^[61] This framework has been applied to international relations, revealing how institutional legacies from post-World War II settlements influence contemporary alliances and trade regimes.^[62]

Rational Choice Institutionalism

Rational choice institutionalism posits that institutions emerge as equilibria from the strategic interactions of self-interested actors who rationally pursue their preferences under constraints of uncertainty and incomplete information.^[63] Actors are assumed to possess stable, exogenous preferences and to select actions that maximize expected utility, with institutions functioning as rules or structures that alter incentives, reduce transaction costs, and facilitate credible commitments by shaping the payoffs in repeated games.^[64] ^[65] This approach emphasizes methodological individualism, reducing institutional outcomes to aggregates of individual calculations rather than collective norms or historical legacies.^[66] Core to rational choice institutionalism is the view of institutions as solutions to collective action dilemmas, such as prisoner's dilemmas or coordination problems, where formal rules—like constitutional provisions or organizational bylaws—enforce cooperation by making defection costly.^[65] For instance, in legislative settings, committee structures are analyzed as mechanisms that align private interests with public outcomes through agenda control and veto points, as modeled by Kenneth Shepsle in his 1986 work on institutional arrangements.^[67] Unlike sociological institutionalism, which sees institutions as culturally embedded logics that constitute actors' identities and preferences, rational choice institutionalism treats preferences as fixed and prior, with institutions influencing only the strategic environment.^[63] ^[12] It diverges from historical institutionalism by prioritizing calculable equilibria over path-dependent lock-ins, assuming institutions can be redesigned if actors anticipate net gains from change.^[68] ^[69] Empirical applications often employ game-theoretic models to predict institutional effects, such as how electoral rules influence party competition or how property rights regimes mitigate hold-up problems in economic exchanges.^[65] Proponents argue this framework's strength lies in its falsifiability and predictive power, as demonstrated in analyses of U.S. congressional organization where institutional rules explain variance in policy stability better than actor-specific factors alone.^[67] However, the approach has faced scrutiny for over-relying on thin rationality assumptions, potentially underestimating bounded cognition or endogenous preference shifts, though defenders counter that relaxing perfect rationality—via models of bounded or procedural rationality—preserves the core logic without invoking unobservable cultural variables.^[66] In comparative politics, rational choice institutionalism has informed studies of delegation in international organizations, where states rationally cede sovereignty to gain enforcement credibility, as in principal-agent frameworks applied to EU decision-making since the 1990s.^[63]

Applications Across Disciplines

Organizational and Management Contexts

In organizational and management studies, institutional theory emphasizes how organizations embed themselves within broader social, cultural, and regulatory environments to secure legitimacy, often prioritizing conformity over pure technical efficiency.^[70] This perspective views organizational structures and practices as responses to institutional pressures rather than solely rational adaptations to market demands, with legitimacy conferring access to resources, stability, and survival advantages.^[71] A foundational argument, advanced by Meyer and Rowan in 1977, posits that many formal organizational structures function as "myths and ceremonies" that signal alignment with societal expectations, decoupling symbolic elements from actual technical operations to avoid conflict and maintain external approval.^[71] For instance, organizations may adopt bureaucratic hierarchies or standardized procedures not for internal coordination but to demonstrate rationality to stakeholders like regulators or accreditors.^[71] DiMaggio and Powell extended this in 1983 by introducing the concept of institutional isomorphism, which describes the process by which organizations within the same field converge in form and practice due to three mechanisms: coercive isomorphism from state mandates or resource dependencies (e.g., compliance with legal standards); mimetic isomorphism amid uncertainty, where firms imitate perceived successful peers (e.g., adopting total quality management during economic ambiguity); and normative isomorphism via professional networks and education, fostering shared norms (e.g., MBA training emphasizing similar managerial templates). Empirical studies, such as analyses of U.S. higher education or healthcare sectors, have documented these pressures leading to homogeneity, with over 70% of organizations in mature fields exhibiting structural similarities by the 1990s.^[70] Subsequent developments incorporate institutional logics—coherent sets of cultural beliefs, rules, and practices that prescribe appropriate behaviors in specific contexts, such as market versus community logics in hybrid organizations.^[72] In management applications, this framework explains strategic choices, like corporate social responsibility initiatives blending profit and societal logics, or resistance to change when dominant logics clash, as seen in banking sector shifts post-2008 financial crisis where regulatory logics overrode pure efficiency imperatives.^[73] Research applying these ideas has influenced fields like strategic management, revealing how institutional factors account for 40-60% of variance in firm practices across industries, per meta-analyses of diffusion studies.^[70]

Economic Development and Policy

Institutional theory posits that formal rules, informal norms, and enforcement mechanisms profoundly influence economic development by shaping incentives for investment, innovation, and exchange. In new institutional economics, secure property rights and rule of law reduce uncertainty and transaction costs, enabling markets to function efficiently and spurring long-term growth.^[74] ^[75] Empirical analyses across countries demonstrate that variations in institutional quality explain significant portions of differences in per capita income and growth rates; for instance, colonial origins fostering inclusive institutions in settler economies correlated with higher GDP per capita by 2000 compared to extractive ones.^[74] ^[76] Cross-national studies reinforce this causal link, with econometric models showing that improvements in institutional indicators—such as constraints on executive power and protection against expropriation—predict sustained economic expansion, independent of geography or initial conditions.^[77] In Latin America and the Caribbean versus advanced economies, weaker institutions have constrained growth by amplifying corruption and policy volatility, leading to lower average annual GDP increases from 1990 to 2020.^[77] However, some research challenges strict causality, suggesting human capital accumulation precedes and drives institutional strengthening, as evidenced by regressions where education levels better forecast subsequent reforms than vice versa.^[78] In policy contexts, institutional theory advocates prioritizing reforms that build credible commitment devices, such as independent judiciaries and anti-corruption agencies, over short-term fiscal interventions.^[79] Successful cases include post-1980s liberalization in East Asia, where gradual institutional adaptations supported export-led growth averaging 7-10% annually, contrasting with failed interventions in sub-Saharan Africa hampered by elite capture.^[52] Yet, implementation faces path dependence: entrenched interests often resist change, as seen in stalled World Bank-backed governance programs where aid tied to institutional benchmarks yielded mixed results due to local elite subversion.^[80] Policymakers thus emphasize incremental, endogenous reforms grounded in local norms to avoid backlash and ensure durability.^[75]

Political and Governance Analysis

In political science, institutional theory, particularly through the lens of new institutionalism, posits that formal rules, informal norms, and organizational structures mediate political actors' strategies, constraining or enabling governance outcomes such as policy stability and state capacity. Revived in the late 1980s, this approach critiques behavioralist emphases on individual preferences by highlighting institutions' independent effects on power distribution and decision-making processes.^[81] For instance, empirical analyses demonstrate that institutional arrangements, like veto points in fragmented polities, increase policy gridlock by raising transaction costs for collective action.^[82] Historical institutionalism applies these principles to governance by emphasizing path dependence, where early institutional choices—often forged during critical junctures—generate self-reinforcing feedback loops that resist reform. A key example is the persistence of federal structures in countries like the United States, where constitutional divisions of power established in 1787 have shaped fiscal federalism and intergovernmental relations, limiting centralized responses to economic crises as evidenced in studies of New Deal-era adaptations.^[83] Empirical cross-national research supports this, showing that path-dependent welfare regimes, differentiated by decommodification levels, correlate with divergent policy trajectories; Scandinavian social-democratic models, locked in post-World War II, exhibit higher public spending persistence compared to liberal variants in Anglo-American systems.^[14] Rational choice institutionalism models governance as equilibria among self-interested actors navigating institutional incentives, such as electoral rules that alter bargaining dynamics in legislatures. In multi-level governance contexts like the European Union, institutions reduce information asymmetries and credible commitment problems, facilitating integration outcomes; quantitative studies from 1957 onward reveal that supranational delegation has lowered member-state defection rates in trade policy by 20-30% through repeated interactions.^[84] This strand underscores causal mechanisms like principal-agent delegation, where oversight institutions mitigate bureaucratic drift, as seen in delegation to independent central banks correlating with lower inflation volatility across 20 OECD countries since the 1990s.^[66] Cross-disciplinary applications reveal institutional theory's role in explaining governance variations, with empirical evidence linking robust institutional designs—measured via rule of law indices—to superior outcomes like reduced corruption and enhanced public goods provision. Panel data analyses of over 100 countries from 1996-2020 indicate that countries with higher institutional quality scores experience 1-2% annual GDP growth premiums, though endogeneity challenges persist, prompting instrumental variable approaches using colonial legal origins.^[85] Sociological variants further illuminate how mimetic isomorphism drives policy diffusion, as governance reforms in developing states often emulate Western models for legitimacy, yielding mixed efficiency gains per World Bank evaluations.^[86]

Criticisms and Controversies

Theoretical and Methodological Weaknesses

Institutional theory faces criticism for its conceptual ambiguities, particularly in defining core terms such as "institution," "institutionalization," and "institutionalism," which complicates precise theoretical application and reconciliation of macro- and micro-level factors.^[45] This vagueness contributes to a static orientation, emphasizing stability and conformity over dynamic processes of change, thereby limiting explanations of institutional evolution in response to external shocks or internal conflicts.^[45] Critics argue that the theory underemphasizes agency, power imbalances, and conflicts of interest, often portraying institutions as consensual structures while neglecting domination by dominant groups, as highlighted in contrasts with Weberian or Marxist perspectives.^[45] Furthermore, it perpetuates dualisms between structure and agency, relying on normative logics rather than interdependencies and power ratios to explain behavior, which restricts processual understandings of organizational dynamics.^[87] Methodologically, institutional theory struggles with linking multiple levels of analysis, as standard designs rooted in methodological individualism fail to adequately compare explanatory power across micro-behavioral and macro-institutional factors, often relying on national-level data proxies that obscure causal mechanisms.^[88] Empirical testing is hampered by difficulties in directly measuring abstract constructs like legitimacy or cognitive scripts, leading to indirect evidence such as field convergence or global event correlations, which conflate cultural, political, and structural influences without isolating specific processes.^[88] Quantitative approaches are limited by challenges in operationalizing institutional variables, while qualitative case studies, though prevalent, suffer from poor generalizability and vulnerability to endogeneity, where institutions and outcomes are hard to disentangle causally.^[45] These issues result in designs focused on covariance rather than underlying institutionalization dynamics, potentially insulating core claims from rigorous falsification and reducing predictive utility.^[88]

Debates on Institutional Efficiency

A central debate in institutional theory revolves around whether institutions inherently promote efficiency by minimizing transaction costs and aligning incentives, or if they frequently engender inefficiencies through mechanisms like path dependence and power asymmetries. Proponents of efficiency-oriented views within New Institutional Economics (NIE), such as Oliver Williamson, argue that institutions evolve as governance structures to economize on bounded rationality and opportunism, thereby enhancing contractual and organizational performance.^[89] In contrast, Douglass North contends that institutions rarely achieve Pareto efficiency, as they are often devised to serve the interests of powerful actors rather than societal welfare, resulting in suboptimal equilibria that persist due to historical lock-in effects.^[89]^[90] Path dependence exacerbates institutional inefficiencies by creating increasing returns to established arrangements, making reversal costly even when superior alternatives exist. North illustrates this with historical divergences in economic performance: post-colonial North America developed secure property rights fostering investment and growth, while Latin America entrenched extractive institutions prioritizing elite rents, yielding per capita income gaps persisting into the 20th century—e.g., U.S. GDP per capita reached $5,300 by 1990 versus Argentina's $4,000, despite similar starting points.^[90] Historical institutionalists extend this critique, emphasizing that critical junctures and sequencing imprint inefficient rules, as institutions designed for past contingencies resist adaptation amid changing environments.^[91] Empirical cross-national studies corroborate inefficiencies' drag on growth; for instance, World Bank governance indicators from 1996–2020 show countries with low institutional quality (e.g., rule of law scores below 0) averaging 1.5% annual GDP growth versus 3.2% for high-quality peers.^[92] Sociological institutionalism challenges efficiency primacy by positing that organizations prioritize mimetic and normative isomorphism for legitimacy over technical optimization, often yielding ritualistic compliance that undermines performance. Firms adopting symbolic structures to signal conformity, such as bureaucratic redundancies, may survive longer but operate less efficiently than non-conformists, as evidenced in DiMaggio and Powell's 1983 analysis of U.S. organizational fields where isomorphism correlated with homogenized but suboptimal practices.^[45] Critics of this view, drawing from rational choice institutionalism, counter that selection pressures eventually weed out inefficiencies, though North's framework highlights ideological and cognitive barriers impeding such corrections.^[91]^[89] These debates underscore causal tensions: while efficient institutions demonstrably boost outcomes—e.g., secure contracting regimes raising firm productivity by 20–30% in panel data from emerging markets—persistent inefficiencies reflect not market failures alone but entrenched interests resisting reform.^[92] Institutional theory thus cautions against assuming equilibrium efficiency, advocating empirical scrutiny of power dynamics over idealized functionalism.^[93]

Agency Versus Structure Dilemma

The agency versus structure dilemma in institutional theory centers on reconciling the role of individual or collective actors' intentional actions—agency—with the enduring constraints and enablements imposed by institutions, such as rules, norms, and organizational fields that shape behavioral expectations. Proponents of structural determinism, prevalent in sociological institutionalism, argue that institutions exert powerful isomorphic pressures, leading actors to conform through mechanisms like mimetic, coercive, and normative isomorphism, thereby limiting independent agency and perpetuating stability over change. This view posits that deviations from institutional scripts are rare and costly, as evidenced by empirical studies of organizational fields where non-conformity correlates with legitimacy deficits and resource withholding.^[94]^[95] Conversely, agency-centric perspectives, often aligned with rational choice institutionalism, emphasize actors' strategic calculations and resource mobilization to navigate, exploit, or alter structures, treating institutions as outcomes of aggregated preferences rather than exogenous constraints. Rational actors, in this framework, engage in cost-benefit analyses to challenge institutional arrangements when opportunities arise, such as through bargaining or innovation, supported by game-theoretic models demonstrating how repeated interactions can shift equilibria. Empirical evidence from economic development contexts, including firm-level adaptations in transitioning economies, illustrates agency overriding structural inertia, where entrepreneurial initiatives disrupt entrenched practices despite prevailing norms.^[96]^[97] Attempts to resolve the dilemma, notably through Anthony Giddens' structuration theory introduced in 1984, propose a duality wherein structures are both the medium and outcome of agency: actors reflexively draw upon institutional rules and resources in their practices, simultaneously reproducing or transforming them via knowledgeable action. This recursive process underscores that institutions lack autonomy apart from human enactment, yet empirical applications reveal challenges in operationalization, as micro-level agency often remains underspecified in macro-structural analyses. Critics contend that such syntheses risk theoretical ambiguity, failing to prioritize causal mechanisms—empirical data from organizational change studies indicate that agency drives deinstitutionalization only under specific conditions, like field-level crises, rather than routine duality. In practice, the dilemma persists in explaining institutional change, where overemphasis on structure in academia may undervalue verifiable instances of agentic disruption, such as policy entrepreneurs reforming governance amid path-dependent lock-in.^[98]^[99]

Processes of Institutional Change

Mechanisms of Institutional Evolution

Mechanisms of institutional evolution encompass processes through which formal and informal rules, norms, and practices persist, adapt, or transform over time, often balancing inertia with incremental or disruptive shifts. These mechanisms highlight endogenous dynamics, such as reinterpretation of existing structures amid changing contexts, alongside exogenous pressures like technological or environmental shocks. Empirical studies emphasize gradualism over abrupt replacement, as institutions rarely dissolve entirely but evolve via layering new elements onto legacy frameworks or through subtle reinterpretations that alter their functional effects.^[100] A primary mechanism is layering, where new rules or policies are appended to preexisting institutions without dismantling the old, allowing gradual displacement as the additions gain prominence. For instance, in welfare state reforms during the 1990s and 2000s, governments in advanced economies added market-oriented incentives atop traditional entitlement systems, shifting resource allocation over decades without formal abolition. This process thrives in veto-rich environments where comprehensive overhaul faces resistance, enabling change agents to bypass entrenched interests.^[101]^[102] Displacement involves the slow supplanting of dominant institutions by emergent alternatives, often through differential growth rates or policy experimentation. In labor market institutions, for example, coordinated bargaining systems in Europe have been eroded since the 1980s by rising firm-level negotiations and temporary contracts, where new practices expand in niches before overtaking incumbents. This mechanism underscores how institutional "defection"—actors exploiting ambiguities—amplifies alternatives, particularly under exogenous liberalization pressures.^[103]^[104] Drift occurs when institutions remain formally unchanged but lose efficacy due to evolving socioeconomic contexts, prompting reinterpretation without deliberate reform. Regulatory frameworks from the mid-20th century, such as U.S. antitrust laws enacted in 1890 and strengthened in the 1910s, have drifted in application; originally targeting industrial monopolies, they increasingly addressed digital platforms by the 2010s amid technological shifts, altering enforcement without legislative updates. This passive evolution relies on interpretive flexibility by actors like judges or bureaucrats.^[101] Conversion repurposes existing institutions for novel purposes, leveraging their sunk legitimacy while redirecting functions. In vocational training systems, Germany's dual apprenticeship model—established in the 19th century—has been converted since the 2000s to emphasize high-tech skills for global competition, adapting core structures to new economic demands without foundational redesign. Such shifts exploit ambiguities in institutional mandates, often driven by political coalitions reorienting implementation.^[101]^[100] Path dependence reinforces evolutionary trajectories by generating self-reinforcing feedbacks, such as network effects or learning economies, that lock in early choices and constrain alternatives. QWERTY keyboard layouts, standardized in the 1870s, persisted into the 21st century despite ergonomic critiques due to training costs and compatibility, illustrating how increasing returns embed institutions. While path dependence explains stickiness, it permits "branching" evolutions within constraints, as seen in modular adaptations rather than wholesale resets.^[105]^[106] Exogenous shocks, like economic crises or technological disruptions, can trigger punctuated evolution, accelerating mechanisms such as displacement or layering by weakening institutional defenses. The 2008 financial crisis, for instance, prompted central banks worldwide to layer unconventional monetary tools onto classical frameworks, with the U.S. Federal Reserve expanding balance sheets from $900 billion in 2007 to over $4 trillion by 2014, marking a rapid institutional shift. These events interact with endogenous processes, amplifying gradual changes during windows of heightened plasticity.^[107]^[102] Isomorphic pressures contribute to convergent evolution across organizations or polities, via coercive mandates (e.g., supranational regulations), mimetic imitation under uncertainty, or normative professionalization. Multinational firms adopting similar corporate governance since the 1990s, influenced by global standards like IFRS accounting rules effective from 2005, exemplify mimetic and coercive isomorphism driving parallel institutional forms. These mechanisms promote homogeneity but can evolve institutions toward efficiency or legitimacy amid competitive emulation.^[40]^[11]

Deinstitutionalization and Disruption

Deinstitutionalization in institutional theory describes the erosion of legitimacy and taken-for-granted status of established practices, norms, or structures, resulting in their partial weakening or complete abandonment.^[108] This process counters the emphasis on institutional stability in early neo-institutionalism by highlighting how exogenous and endogenous pressures can dismantle entrenched arrangements.^[109] Key antecedents include political pressures, such as shifts in regulatory enforcement or policy mandates that undermine coercive isomorphism; functional pressures, where practices prove inefficient or maladaptive in changing environments; and social pressures, driven by evolving cultural values or stakeholder critiques that erode normative support.^[108] These mechanisms often interact, with empirical studies showing gradual erosion through decoupling from original rationales rather than abrupt collapse.^[110] Disruption extends deinstitutionalization by involving active challenges from actors or technologies that introduce competing logics, often accelerating change through targeted interventions.^[111] Institutional disruption mechanisms, as outlined in foundational work, encompass disconnecting sanctions and rewards from old practices, disassociating moral or ethical foundations from institutionalized rules, and suppressing mechanisms that sustain the status quo, such as by amplifying field-level contradictions.^[111] In organizational fields, this manifests as actors leveraging resources to reframe institutional myths, leading to legitimacy shifts; for instance, technology platforms like Uber disrupted taxi regulations by decoupling licensing sanctions from service delivery and promoting efficiency-based moral justifications over traditional guild protections.^[111] Such disruptions are empirically linked to field reconfiguration, with data from ride-sharing markets showing a 20-30% decline in traditional taxi revenues in major cities post-2010 due to eroded institutional barriers.^[112] Empirical evidence underscores varying degrees of deinstitutionalization and disruption outcomes, from reversible erosion in stable fields to irreversible discontinuity amid shocks. In healthcare, deinstitutionalization of large-scale institutional care for mental illness, initiated in the U.S. via the Community Mental Health Act of 1963, reduced state hospital populations from over 550,000 in 1955 to under 100,000 by 1980, driven by policy shifts and pharmaceutical advancements that challenged custodial norms.^[113] Similarly, in organizational contexts like sports science departments, disruption arose from resource reallocations and performance critiques, leading to program closures between 2000 and 2010 in select institutions as taken-for-granted research paradigms lost funding support.^[114] These cases reveal causal pathways where disruption amplifies deinstitutionalization when actors exploit institutional voids, though incomplete processes often yield hybrid forms rather than total replacement.^[115] Overall, such dynamics highlight agency in institutional change, with success hinging on actors' ability to mobilize networks against path dependencies.^[109]

Empirical Evidence

Cross-National Economic Performance Studies

Cross-national studies consistently demonstrate a strong positive association between institutional quality—encompassing secure property rights, rule of law, and constraints on executive power—and economic performance metrics such as GDP per capita and long-term growth rates. In a seminal analysis of 64 former colonies, Acemoglu, Johnson, and Robinson (2001) employed settler mortality rates as an instrumental variable to address endogeneity, finding that differences in economic institutions explain approximately 75% of the variation in log GDP per capita today, with a coefficient indicating that a one-standard-deviation improvement in institutional quality raises income levels by about 0.7 log points.^[74] This instrumental approach mitigates reverse causality concerns, attributing prosperity divergences primarily to inclusive institutions that incentivize investment and innovation over extractive ones that concentrate rents among elites.^[74] Hall and Jones (1999) further corroborated these patterns in a sample of 130 countries, decomposing output per worker into physical capital, human capital, and total factor productivity components, and attributing nearly all cross-country differences to "social infrastructure," defined as institutions and government policies promoting productive activity and investment. Their regressions showed that a one-standard-deviation increase in social infrastructure correlates with a 1.2 log point rise in output per worker, dwarfing the effects of factor accumulation alone, with endogeneity addressed by instrumenting infrastructure with historical factors like location and language origins.^[116] Similarly, Knack and Keefer (1995) analyzed data from 98 countries using International Country Risk Guide (ICRG) indicators of property rights and bureaucratic quality, revealing that stronger institutions predict higher investment rates and growth, with a one-point improvement in their composite index associated with 0.5-1% additional annual growth over 1974-1989.^[117] Panel data extensions reinforce these cross-sectional findings; for instance, using World Bank governance indicators across 200+ countries from 1996-2020, institutional quality measures like control of corruption and rule of law exhibit robust positive coefficients in growth regressions, often explaining 20-40% of variation in per capita GDP growth after controlling for initial income, trade openness, and education.^[118] However, debates persist on causality: Glaeser et al. (2004) critiqued instrumented approaches like Acemoglu's, arguing in OLS regressions over 1960-2000 that human capital accumulation precedes and fosters good institutions, with no direct growth effect from institutions once education is included, suggesting omitted variables or sequencing where low initial human capital entrenches poor institutions.^[78] Despite such challenges, meta-analyses affirm that institutional effects hold in specifications addressing endogeneity, underscoring their causal primacy in fostering sustained economic divergence.^[118]

Organizational and Firm-Level Findings

Empirical research at the organizational and firm level demonstrates that institutional pressures drive isomorphic adoption of structures and practices, conferring legitimacy that bolsters survival rates but often at the expense of operational efficiency. A meta-analysis of 30 neo-institutional theory studies published between 1983 and 2007 found strong support for the proposition that institutional structures shape organizational behavior more than agency, with isomorphic conformity evident across coercive, mimetic, and normative mechanisms, though the "iron cage" of rigid isomorphism exerts weaker constraints than initially theorized, allowing some strategic discretion. In the franchising sector, analysis of 1,292 new U.S. franchisors founded from 1979 to 1996 revealed that institutional legitimacy—gained through conformity to field norms—significantly extended firm survival, independent of economic factors like initial capital.^[119] Mimetic isomorphism, where firms imitate peers amid uncertainty, similarly yields performance benefits via enhanced stability and resource access, as evidenced in studies of multinational subsidiaries adopting parent practices influenced by relational and institutional factors.^[120] However, such conformity can homogenize strategies, potentially undermining competitive differentiation; for instance, board independence isomorphism has been linked to relative firm performance variations, with mimetic pressures amplifying adoption in uncertain environments but not always translating to superior financial outcomes.^[121] In the French film production industry, institutional specialization—aligning deeply with prevailing logics—improved survival odds, with a 0.10 increase in specialization raising survival chances by a factor of 1.086, and fully specialized firms surviving 2.28 times longer than generalists, based on accelerated failure time models applied to 7,541 observations from 2,277 firms (1994–2008).^[122] Decoupling, the separation of formal policies from actual practices, enables firms to signal compliance for legitimacy while buffering core operations from disruptive costs, often sustaining short-term performance. Case studies of Swedish fast-fashion retailers (2016–2020) illustrate means-ends decoupling through outsourcing sustainability efforts, such as garment collection (e.g., 29,005 tons by one firm in 2019), which minimized interference with profit-driven activities and deferred substantive environmental gains, though vulnerability emerged under economic strain, as seen in one firm's 2017 program cessation.^[123] Overall, firm-level outcomes reflect a legitimacy-efficiency tension: institutional alignment secures stakeholder approval and longevity, yet persistent decoupling or over-isomorphism risks innovation stagnation, with meta-analytic evidence indicating moderated effects where agency tempers structural determinism.

Recent Developments and Future Directions

Integration with Emerging Theories

Institutional theory has increasingly integrated with evolutionary approaches to address the endogenous drivers of institutional change, moving beyond static equilibrium models to incorporate variation, selection, and retention mechanisms. This synthesis posits that institutions evolve through processes akin to biological evolution, where cognitive biases and network interactions among actors generate institutional variants that are selected based on their fitness in specific contexts. For instance, evolutionary institutional models use cognitive science to explain how path-dependent lock-ins emerge from decentralized decision-making, resolving some tensions in traditional institutionalism by emphasizing adaptive, non-intentional dynamics over deliberate design.^[107]^[124] Complementing this, integrations with complexity theory highlight non-linear, emergent properties in institutional systems, drawing on Douglass North's new institutional economics to model institutions as complex adaptive systems influenced by feedback loops and tipping points. Such frameworks underscore how small perturbations, like policy shocks or technological shifts, can cascade into systemic reconfiguration, challenging reductionist views that aggregate individual behaviors into institutional outcomes. Empirical applications, particularly in economic development, reveal that institutional persistence often stems from self-reinforcing complexity rather than mere path dependence, enabling predictions of resilience or collapse under varying environmental pressures.^[125]^[1] In organizational contexts, institutional theory has merged with practice theory to provide microfoundations for the reproduction and evolution of institutional logics, focusing on how everyday routines and situated actions sustain or disrupt entrenched norms. This approach counters critiques of institutional theory's overemphasis on isomorphism by examining how actors' practical engagements—embedded in material artifacts and social interactions—generate endogenous variation within logics, as seen in studies of hybrid organizations navigating multiple institutional demands. Recent work extends this to longitudinal analyses, showing that practice-driven bricolage can foster incremental deinstitutionalization without requiring exogenous shocks.^[126] A prominent contemporary integration involves digital transformation theories, where institutional perspectives reframe platform economies and algorithmic governance as new institutional forms that both conform to and challenge existing logics. Scholars argue that digital technologies accelerate institutional hybridization, as firms adopt data-driven practices that embed novel rules of appropriateness, such as algorithmic accountability, while facing regulative pressures from legacy institutions. This synthesis reveals causal pathways where digital affordances enable rapid diffusion of institutional scripts across borders, yet also provoke resistance due to misalignments with cultural-cognitive pillars, evidenced in cases of fintech disruption and gig economy platforms. Empirical studies from 2018 onward document how these integrations enhance explanatory power for institutional entrepreneurship in volatile tech ecosystems, predicting faster cycles of legitimation and contestation compared to analog eras.^[127]^[128]^[129]

Applications to Contemporary Challenges

Institutional theory provides a framework for analyzing how entrenched rules, norms, and logics influence responses to pressing modern issues, revealing both constraints from path dependencies and opportunities for reconfiguration through isomorphic pressures or hybrid logics. In environmental governance, for example, the theory explains persistent policy inertia amid escalating climate risks, where formal institutions like international agreements often yield under-reaction due to veto points and interest group capture, despite empirical evidence of warming exceeding 1.1°C since pre-industrial levels as of 2023. Analyses of public organizations adapting to climate impacts underscore how regulative, normative, and cultural-cognitive pillars limit proactive measures, with field-level logics prioritizing short-term stability over long-term resilience.^[130]^[131] Applied to technological disruptions, institutional theory illuminates the coercive push toward digitalization, as firms mimic peers under normative pressures to integrate AI and automation, yet face resistance from incompatible logics embedded in legacy structures. A 2023 study posits that AI algorithms drive organizational isomorphism by standardizing practices across sectors, but this risks amplifying biases if institutions fail to evolve, as seen in regulatory lags where ethical frameworks trail deployment speeds exceeding 40% annual growth in AI adoption rates among enterprises. In healthcare, for instance, digital tools imposed during the COVID-19 pandemic—such as telehealth platforms adopted by over 70% of U.S. providers by mid-2021—exposed tensions between efficiency logics and professional autonomy, prompting partial deinstitutionalization of in-person norms.^[132]^[133]^[134] The COVID-19 pandemic further demonstrated institutional theory's utility in dissecting crisis responses, where conflicting logics—such as state-mandated health protocols versus market-driven economic imperatives—led to heterogeneous outcomes, including accelerated institutional change in global vaccine distribution systems that reached 13 billion doses administered by late 2023. In low-trust environments, weak enforcement mechanisms exacerbated disparities, with institutional voids in developing nations correlating to excess mortality rates 2-3 times higher than in high-institutional-quality peers. This highlights causal pathways where pre-existing institutional strength, measured by rule-of-law indices averaging 0.7 on a 0-1 scale in advanced economies versus 0.4 elsewhere, determined adaptive capacity.^[135]^[136] On economic inequality, institutional theory critiques how field conditions entrench disparities, with globalization's institutional diffusion failing to equalize outcomes; for instance, cross-national data from 2010-2020 show Gini coefficients rising in 40% of economies despite trade liberalization, attributable to labor market institutions favoring capital over wage compression. In emerging markets, institutional quality—proxied by corruption perceptions indices below 50/100 in many cases—mediates globalization's effects, channeling benefits unevenly and perpetuating cycles where informal norms undermine formal equality mandates. These applications underscore the theory's emphasis on endogenous change processes, where exogenous shocks catalyze but do not guarantee equitable reconfiguration without addressing power asymmetries in institutional fields.^[137]^[138]

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Institutional analysis uses research designs to document higher-order effects, link levels of analysis, and assess dynamic processes of institutionalization.
[89]
NORTH VS WILLIAMSON: THE DEBATE OVER INSTITUTIONS ...
On the opposite, institutional economists evaluate institutions' efficiency through institutional real comparison among feasible alternatives. New ...
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Institutions, Institutional Change, and Economic Performance
Nov 4, 2009 · Examines the role that institutions, defined as the humanly devised constraints that shape human interaction, play in economic performance.<|separator|>
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Institutions and (In)efficiency (Chapter 4) - Theories of Institutions
Jan 6, 2022 · Institutions produce social effects, and one vocabulary for thinking about these effects derives from economics and focuses on efficiency ...
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The Issue of Efficiency and the Role of State in New Institutional ...
Jan 31, 2020 · This article scrutinises and criticises the notion of efficiency and the role of state in the emergence and evolution of institutions and property rights.
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Introduction to the Douglass C. North memorial issue
Dec 1, 2016 · ... inefficient institutions and promote efficiency. By 1990, in emphasizing path dependence, North fully established a different view.
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the agency/structure dilemma in organization theory. - ResearchGate
This article reviews and assesses the various ways in which the agency/structure dilemma has been dealt with in organization theory.
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Agency and Institutions in Organization Studies
Jun 9, 2017 · ... institutional relations and what it enables? Rather than engage with the agency–structure debate as a genuine theoretical problem and object ...
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Structure, institution, agency, habit, and reflexive deliberation
Aug 1, 2008 · The conceptual apparatus referred to generally as agency-structure or agency-institution is central to a great deal of social science, ...
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https://papers.ssrn.com/sol3/papers.cfm?abstract_id=840255
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Structure, Agency, and Institutions | The Relational Economy
This chapter explains an idea that integrates structure and agency through the role of institutions. It starts by discussing the role of economic agency, ...
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[PDF] Microfoundations of institutions: A matter of structure vs. agency or ...
By defining social structure as social positions or habitus, Cardinale is able to critique the oversimplified parallel sometimes made between structure only ...
[100]
Beyond Continuity: Institutional Change in Advanced Political ...
This book brings together a distinguished set of contributors from a variety to examine current theories of institutional change.
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(PDF) A Theory of Gradual Institutional Change - ResearchGate
Notably, Streeck and Thelen (2005) and Mahoney and Thelen (2009) have distinguished several change mechanisms. In brief, layering refers to the addition of ...
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[PDF] Introduction: institutional change in advanced political economies
Recent work on path dependence in particular has emphasized mechanisms of increasing returns and positive feedback that sustain and reinforce institutions.
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[PDF] Institutional change in varieties of capitalism - Harvard DASH
Streeck and Thelen (2005). Defection is the mechanism that defines the mode of change that. Streeck and Thelen call institutional “displacement,” and their ...
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[PDF] Institutional Change in Advanced Political Economies - MPG.PuRe
This mode of change depicts a situa- tion in which the original institutions are left in place, but new elements are added alongside the old system, elements ...
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Why are institutions the 'carriers of history'?: Path dependence and ...
Three main analytical insights into the conditions that give rise to path dependence in economic phenomena generally can be applied to answer the question why ...Missing: inefficiency | Show results with:inefficiency
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Path Dependence - A Foundational Concept for Historical Social ...
This introduction to the concept of path dependence, its pertinence for the development of historical social science, and its application in economic analysis ...
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[PDF] Evolutionary Theory and Endogenous Institutional Change
Sep 18, 2019 · Their major theories stress stability, treating institutions as fixed game theoretic structures or equilibria (economics and political science), ...
[108]
The Antecedents of Deinstitutionalization - Christine Oliver, 1992
Deinstitutionalization refers here to the erosion or discontinuity of ... Contrary to the emphasis in institutional theory on the cultural persistence ...
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(PDF) Deinstitutionalization revisited - ResearchGate
Aug 6, 2025 · ... A theory of deinstitutionalization is an important milestone for institutional theory as it asks whether and how even highly ...
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[PDF] Why do established practices deinstitutionalize?
Existing institutional theory highlights different degrees of deinstitutionalization, from complete abandonment of practices to partial erosion, with an ...
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Institutional disruption and technology platforms: the Uber case
Apr 29, 2021 · For Lawrence & Suddaby (2006), there are three basic types of institutional disruption mechanisms: (1) disconnecting sanctions and rewards; (2) ...
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(PDF) Institutional disruption and technology platforms: the Uber case
mechanisms: (1) disconnecting sanctions and rewards; (2) disassociating moral foundations,. rules and institutionalized technologies; and (3) suppressing ...
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Institutionalization of deinstitutionalization: a cross-national analysis ...
Nov 22, 2014 · This study contributes to the empirical literature on global health, neo-institutional theory, and governance. Deinstitutionalization ...
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[PDF] Institutional theory and change: the deinstitutionalization of sports ...
Institutional theory and change: the deinstitutionalization of sports science at Club X ... American Sociological Review, Vol. 59 No 4, pp. 547-570 ...
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Deinstitutionalization in the Organizational Field of Health Care
The concept of deinstitutionalization is central to institutional theory. It represents the process by which the legitimacy of an established or ...
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[PDF] Why Do Some Countries Produce So Much More Output Per Worker ...
We concentrate on the relation between social infrastructure and differences in economic performance. The production function-productivity analysis allows us to ...
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[PDF] INSTITUTIONS AND ECONOMIC PERFORMANCE
The impact of property rights on economic growth is examined using indicators provided by country risk evaluators to potential foreign investors.
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(PDF) Institutions and Economic Performance: A Review of the ...
Aug 7, 2025 · The aim of this article is to take stock of the theoretical debate and empirical findings concerning the impact of institutions on economic performance.
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New Firm Survival: Institutional Explanations for New Franchisor ...
This paper examines the survival of 1292 new franchisors established in the United States from 1979–1996. The results show that institutional legitimacy adds to ...
[120]
Analysis on institutional theory, mimetic isomorphism, and firm ...
Dec 5, 2022 · Analysis on institutional theory, mimetic isomorphism, and firm performance ... Gurwinder Kaur Dua Research scholar, Chitkara Business ...
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(PDF) The Influence of Board Independence Isomorphism on Firm ...
Oct 16, 2024 · This study aims to investigate affect of isomorphism in presence of board independence on firm performance. Specifically, this study has taken ...
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Institutional Specialization and Survival: Theory and Evidence from ...
Jun 15, 2018 · In this paper, I explore whether and to what extent institutional specialization may affect a critical firm outcome: survival.
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Organizing Means–Ends Decoupling: Core–Compartment ...
Apr 15, 2021 · Extant theory suggests that means–ends decoupling has real consequences, which makes it unstable and difficult for organizations to sustain. Yet ...
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[PDF] Evolutionary Theory and the Dynamics of Institutional Change - AWS
In biological evolution, mechanisms such as sexual reproduction, mutation, and the swapping of genes among bacteria may lead to variations, which are then ...
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Douglass North, New Institutional Economics, and Complexity Theory
Feb 15, 2024 · Douglass North, New Institutional Economics, and Complexity Theory ... evolutionary theory of property rights,”. Iowa L. Rev., 100, 2255 ...
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The Reproduction and Evolution of Institutional Logics: A practice ...
Feb 24, 2025 · Practice theory is a rich domain that can ... Beyond constraining and enabling: Toward new microfoundations for institutional theory.
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Digital innovation and transformation: An institutional perspective
Institutional theory emphasizes that organizations are not purely rational systems of producing goods and services, adapting to an environment of suppliers, ...
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Institutional Perspectives on Digital Transformation - ResearchGate
Mar 22, 2022 · We envisage this volume as an opportunity to explore how manifestations of digital transformation requires rethinking of our understanding and theorization of ...
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Digital Transformation and Institutional Theory - Emerald Bookstore
Digital Transformation and Institutional Theory explores how manifestations of digital transformation requires rethinking of our understanding and theorization ...
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Over-reaction and under-reaction in climate policy: an institutional ...
We employ institutional theory to develop a set of propositions about the likelihood of different public policy responses to climate change. The various ...
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Explaining Public Organization Adaptation to Climate Change ...
Climate change can bring about large-scale irreversible physical ... institutional theory's field-level logics and the sense-making activities of ...
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The digital imperative: Institutional pressures to digitalise
Due to the projected radical nature of digital technologies, institutional theory can offer insights into how these technologies (and associated changes) ...
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(PDF) New Institutional Theory and AI: Algorithms as a Driving Force ...
Aug 2, 2023 · New institutional theory represents an appropriate lens through which the influence of AI on organizations and organizing can be studied.
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Digitalization & Covid-19: An institutional-contingency theoretic ...
We employ institutional theory to dive into the digitalization phase and hence disassociate the study from a specific technology or specific kind of firm making ...
[135]
Burning Down the House: COVID‐19 and Institutions - PMC
'Institutional theory: Contributing to a theoretical research program'. In Smith, K. G. and Hitt, M. A. (Eds), Great Minds in Management: The Process of ...
[136]
An Institutional Theory Perspective to COVID-19 Vaccine Passport ...
This review and commentary article utilises an institutional theory perspective to uncover the factors contributing to the global vaccine divide.
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Institutionalizing Inequality: Field Conditions, Institutional Belonging ...
Jun 10, 2024 · This article addresses this issue in terms of a new conceptual model that combines institutional theory on field conditions and Amartya Sen's ...
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Globalization, economic development, and corruption: A cross ...
Feb 22, 2021 · Drawing on resource dependence and institutional theory, we test the two contingencies of the country's stage of economic development (low, ...