Modeling Institutional Change: Some Critical Thoughts

By Edgren, John | Journal of Economic Issues, December 1996 | Go to article overview

Modeling Institutional Change: Some Critical Thoughts


Edgren, John, Journal of Economic Issues


This paper addresses neoinstitutionalist theories about institutional change in one important school as summarized by Paul D. Bush [1987].(1) The intent is not an exhaustive critique, but identification of problematic ideas. There are three major areas of criticism. One deals with the concept of community embodied in Bush's work. A second concerns aspects of the core idea of value - there is a relatively weak and unsatisfactory treatment of ceremonial values, while distinguishing ceremonial from instrumental values is difficult and may be often impossible. The third concerns sources of change, its discretionary nature, and implications for valuing. As a general characterization, I offer the proposition that Bush's theory is a rather loosely structured set of useful concepts, not a tight logical system.

As defined by Bush, a society is a collection of institutions, while an institution is a collection of socially prescribed behaviors correlated or held in relation to one another by a value.(2) In other contexts [Bush 1987, 1083], values are said to "rationalize behaviors."

For Bush, the core of the social process is problem solving using the community's fund of knowledge. Solutions are the community's technology and are utilized through the community's institutions. The term "technology" is broadly construed, and institutionalist uses of the idea are traced from Veblen through Dewey and Ayres to J. Fagg Foster. That which is prescribed by society are values which, in turn, prescribe behaviors.(3)

A first important reservation about this theory concerns the concept of community. The community (society, culture) is often discussed as though it were almost corporeal. The following quotation is representative:

The community at large has a stake in the manner in which its tools and intelligence are brought to bear on its life processes. Those patterns of behavior perceived to be vital to the survival of the community are the most carefully prescribed and carry the heaviest sanctions [Bush 1987, 1077].

In this treatment, the community becomes almost organic in its coherence. It has intentions; it possesses resources (such as intelligence); it has life processes; it imposes sanctions.(4) It sounds very like a person. Yet we know that the community in fact is not organic. Therefore, this description of the community-as-person is either a metaphor or a theoretical construct economically conveyed by a metaphor.

Metaphors are extremely treacherous as theoretical devices because they feel satisfying, but one never knows exactly what they mean. The whole point of a metaphor is that it connotes more than it denotes: it casts a penumbra of possibilities that alter illusively when ruthlessly illuminated and made explicit.

On the other hand, organic coherence may be a theoretical construct, an explicit product of social interaction. But how is it decided that "the community . . . has a stake?" Some particular individuals must, in fact, decide. Do others disagree? How is the decision made? Some behaviors are "perceived to be vital to the survival of the community." Who perceives?

And what does the phrase "life processes" mean when applied to the community? Presumably these relate to "the survival of the community." Individual persons are unambiguous when it comes to survival. I die, I decay, I am gone. But communities rarely die in this way. They change into some other kind of community. What kinds of changes must we observe before we conclude that some particular community no longer exists? Should sweeping changes arise, they do so through the initiative of some persons. These particular individuals must be happy to see the community die! How is this possible, when "the community at large" apparently seeks to survive? One senses that a continuity is intended from the life processes and survival of the various individuals (somehow aggregated or weighted) to the life and survival of the community itself. …

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