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Endogenous Dynamics of Institutional Change

DellaPosta, Daniel; Victor, Nee and Opper, Sonja LU (2017) In Rationality and Society 29(1). p.5-48
Abstract
A parsimonious set of mechanisms explains how and under which conditions behavioral deviations build into cascades that reshape institutional frameworks from the bottom up, even if institutional innovations initially conflict with the legally codified rules of the game. Specifically, we argue that this type of endogenous institutional change emerges from an interplay between three factors: the utility gain agents associate with decoupling from institutional equilibria, positive externalities derived from similar decoupling among one’s neighbors, and accommodation by state actors. Where endogenous institutional change driven by societal action is sufficiently robust, it can induce political actors to accommodate and eventually to legitimize... (More)
A parsimonious set of mechanisms explains how and under which conditions behavioral deviations build into cascades that reshape institutional frameworks from the bottom up, even if institutional innovations initially conflict with the legally codified rules of the game. Specifically, we argue that this type of endogenous institutional change emerges from an interplay between three factors: the utility gain agents associate with decoupling from institutional equilibria, positive externalities derived from similar decoupling among one’s neighbors, and accommodation by state actors. Where endogenous institutional change driven by societal action is sufficiently robust, it can induce political actors to accommodate and eventually to legitimize institutional innovations from below. We provide empirical illustrations of our theory in two disparate institutional contexts—the rise of private manufacturing in the Yangzi delta region of China since 1978, focusing on two municipalities in that region, and the diffusion of gay bars in San Francisco in the 1960s and 1970s. We validate our theory with an agent-based simulation. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Institutional change, institutional innovation , emergence , network externalities, mechanisms
in
Rationality and Society
volume
29
issue
1
pages
43 pages
publisher
SAGE Publications Inc.
external identifiers
  • scopus:85014656239
  • wos:000395399200002
ISSN
1461-7358
DOI
10.1177/1043463116633147
language
English
LU publication?
yes
id
5380472f-438b-44da-98ae-98fdc6718369 (old id 8258821)
date added to LUP
2015-12-04 09:21:17
date last changed
2018-04-01 03:54:26
@article{5380472f-438b-44da-98ae-98fdc6718369,
  abstract     = {A parsimonious set of mechanisms explains how and under which conditions behavioral deviations build into cascades that reshape institutional frameworks from the bottom up, even if institutional innovations initially conflict with the legally codified rules of the game. Specifically, we argue that this type of endogenous institutional change emerges from an interplay between three factors: the utility gain agents associate with decoupling from institutional equilibria, positive externalities derived from similar decoupling among one’s neighbors, and accommodation by state actors. Where endogenous institutional change driven by societal action is sufficiently robust, it can induce political actors to accommodate and eventually to legitimize institutional innovations from below. We provide empirical illustrations of our theory in two disparate institutional contexts—the rise of private manufacturing in the Yangzi delta region of China since 1978, focusing on two municipalities in that region, and the diffusion of gay bars in San Francisco in the 1960s and 1970s. We validate our theory with an agent-based simulation. },
  author       = {DellaPosta, Daniel and Victor, Nee and Opper, Sonja},
  issn         = {1461-7358},
  keyword      = {Institutional change,     institutional innovation  ,emergence  ,network externalities, mechanisms    },
  language     = {eng},
  number       = {1},
  pages        = {5--48},
  publisher    = {SAGE Publications Inc.},
  series       = {Rationality and Society},
  title        = {Endogenous Dynamics of Institutional Change},
  url          = {http://dx.doi.org/10.1177/1043463116633147},
  volume       = {29},
  year         = {2017},
}