Institutions

Most of my work centres around the concept of institutions, which makes it purposeful to (briefly) explain what I mean when referring to institutions as manifestations of social behaviour.

  1. Behavioural vs. Organisational Dimension

When talking about institutions we commonly think about institutions as organisations, such as schools, hospitals, universities, etc. But in fact those are usually just objectified artefacts of behavioural institutions, such as conventions (e.g. language), social norms (e.g. table manners), and rules (e.g. traffic laws, contracts). For example, we could interpret an organisation as a web of interlinked contracts, with the organisation as an emergent or planned artefact (see e.g. Stinchcombe, 1986).

2. Definitions

The institutional literature offers a wide range of different definitions, some of which provide contextualised viewpoints (such as North’s conception as “rules of the game” (North, 1990)), or detailed definitions that capture the concepts comprehensively, but whose descriptive nature bears the risk to obscure the essentials of institutions. Greif’s (Greif, 2006) or Ostrom’s (Ostrom, 2005) definitions are examples of those.

3. Condensed definition

In an attempt to “stipulate as little as possible” (Robinson, 1950), we signify the essence of institutions based on the following characteristics:

  • Social Behaviour – i.e. they describe the interaction of individuals or groups (not a single individual)
  • Stability – i.e. they are stable over long time frames and evolve slowly (if at all)
  • Persistence – i.e. institutions may still survive even if the circumstances that brought them about (e.g. individuals, necessities) may no longer be exist. (Examples: The historical reasons for driving on the left or right side of the road are no longer relevant, yet the conventions in different countries have largely remained stable. Similarly, the evidently inefficient QWERTY keyboard layout is entrenched as the default layout.) The fact that institutions persist, even if their purpose is no longer apparent, differentiate institutions from behavioural regularities which can be described as stable patterns of observable social behaviour. However, the latter can subside, and thus cease to exist, where as institutions persist.

Based on these characteristics, institutions can be understood as manifestations of social behaviour, i.e. capturing the essence without being overly descriptive or restrictive. This rationale discussed in greater detail here (p. 25) and here (p. 1).

References

Greif, A. (2006), Institutions and the Path to the Modern Economy: Lessons from Medieval Trade, Cambridge University Press.

North, D.C. (1990), Institutions, Institutional Change, and Economic Performance
Cambridge University Press.

Ostrom, E. (2005), Understanding Institutional Diversity, Princeton University Press.

Robinson, R. (1950), Definition, Clarendon Press.

Stinchcombe, A. (1986), Contracts as hierarchical documents, in: Stinchcombe, A. & Heimer, C. (eds.), Organisational theory and project management, Norwegian University Press, p. 212-171.