Historical Institutionalism Summary and Analysis

In this essay I will argue that Historical Institutionalism offers a superior and more comprehensive view of change than the Sociological Institutionalism or Rational Choice Institutionalism alternatives. Is important to point out that the definition of change considered for this essay is the intended or unintended consequences of a strategic set of actions taken in a precise and determined time and space, in contrast to other possibilities in the same context (Hay and Wincott, 1998).

To do this I will compare the competing views of Institutional Change that are presented in Rational Choice Institutionalism, Sociological Institutionalism and Historical Institutionalism to unveil that the view of the latter is more comprehensive than the other two due to the wide scope of the concept of change and the versatility provided by the cultural and calculus approaches included in the branch.

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I will examine the proposal of Rational Choice Institutionalism, first. Describe shortly what this new form of Institutionalism introduces to the discipline and evaluate what the scholars of this form consider that institutional change is. Then I will show how and why their vision is narrowed and cannot really explain most of institutional change on its own.

Secondly, I will analyse Sociological Institutionalism, mentioning the elemental characteristics that separates it from the other two forms of New Institutionalism. Following I will explain the engine of change for sociological institutionalism and I will point out why there is not enough comprehension of how context affect the outcomes and why it is inherently contradictory by denying Rational Choice assumptions, yet assuming rationality in the way organizations operate.

Lastly I will describe Historical Institutionalism to recognize their originality and explain the ambidexterity it possesses between Rational Choice Institutionalism and Sociological Institutionalism. I will clarify the calculus and cultural approaches to understand how they bring concepts of the two previously mentioned into the historical study. On the last part I will explain why is the analysis of change superior under the branch of Historical Institutionalism than both Sociological and Rational Choice Institutionalisms by pointing out how scholars on the first one have surpassed the critiques and flaws of the other two.

Rational Choice

Rational Choice Institutionalism is predicated on the idea that the individuals composing a society seek utility maximization (Tsebelis, 1990). In a process of rational negotiation, individuals consciously enact the rules determined to act upon every member of society. In that way, they choose rationally the characteristics that will shape their institutions (Shepsle, 1989). In other words, institutions are, for this approach, a set of rules, agreed by society in order to set the correct behaviour under certain circumstances and in specific situations. This way conflicts are prevented and the social costs of collective actions are contained and reduced (Hall and Taylor, 1996).

To understand more about this current, we need to point out that the genesis of the Rational Choice Institutionalism is the study of congressional behaviour in the United States as a way of expanding classical Rational Choice into matter that did not fit the models provided up until then by the discipline, like stability of congressional outcomes (Hall and Taylor, 1996).

When referring to change in institutions, Rational Choice does not offer much explanation or even -some would argue- does not consider the existence of a possibility that institutions might change. The term renegotiation-proof must come into consideration now. This concept defines the situation where none of the actors with considerable power to change an institution are willing to do so. Since the core affirmation is that institutions are selected rationally by rational thinkers that seek to optimize their benefit within society, it is logical to understand that there was a previous negotiation process prior to the adoption of such institution, in which all the related subjects to the institution where discussed and approved by the individuals.  According to Selten (1975) an institution must be the proof of renegotiation since that particular and central characteristic provides society with the consistency that precludes any deviation of the expected behaviour, therefore eliminating the cost of instability. Since the utility and effectiveness of institutions is locked to its capability to regulate the behaviour of the members of society, changes would bring instability, confusion and unexpected set of affairs that would increase social costs. It is, thusly, understood that one of the main duties of the state and the higher governmental apparatus is to maintain the institutional arrangement among the individuals, utilizing the processes of cooperation and socialization, (i.e. education) to inculcate this and minimize the virtual perception that institution do not serve the common good (Seznick, 1949; Lipset and Rokkan, 1967; Eisenstadt and Rokkan, 1973; Widavsky, 1987; Sunstein, 1990; Greber and Jackson, 1993 in March and Olsen, 1996).

Instead of changing institutions, according to Rational Choice, it is expected that institution, when faced to different context from which it emerged, apply a pre-arranged framework that can support the inclusion of the new ideas and perceptions of the society but keeping the fundamental attributes of the institution itself. Therefore we may say that beforehand, institutions provide a plan of change that is intrinsic to the institution itself, preventing the transition from one to the other but not impeding the transformation of the original one, meaning that this variations are included in the starting vision of the institution (Shepsle, 1989) In other words, institutional change would only consist of institutions following the pre-set plan. For this reason, it is my consideration that the Rational Choice Institutionalism concept of change, should be replaced and referred more precisely as Institutional Evolution since it does not contemplate the substitution of one institution for another nor a transformation that suits better for reality or for the society’s need, rather than the morphology of the existing ones according to the original projection.

In brief, institutions do not really want to change, those who can change it rather reaffirm it through education to avoid the costs of uncertainty and re-adaptation. Therefore, we can state that Rational Choice Institutionalism studies the ways in which an institution is reinforced and reproduced within the members of a state, by sustaining the idea that spontaneous change or diversity has more cons than pros. Also it is comprehended in this argument the idea that a functional society works better with a faulty institution than without institutions. On the other hand, Rational Choice Institutionalism face the undeniable modification of an institution, it is assumed by this view that all transformation occur within the evolutionary plan of an institution, so that it is not viewed as a change, rather than a natural development through time. And, more importantly, departing from the point that institutions are rationally constructed for the benefit of an organised society, one might also ask, as a valid criticism, cui bono from this arrangement.

Sociological Institutionalism

The second current of the new institutionalism is the one that arose from organizational theory in the field of sociology. Since the work of Weber, the sociologists turn their attention to the bureaucracies that shaped structures in different societies. Whether that was on state level, private enterprises, educational organizations, etc. Later in the 1970s, the need to separate those who study organizations from those focused on culture related analysis was explicit. But opposing to this, the new form of institutionalism arrived. It stated that the way bureaucracies where organized was not predicated on the premise of the greater efficiency, but they were often shaped to its core by the particular culture surrounding the structure in question. They found that this mandatory resemblance to the cultural identity was, in that way, in order to secure and support the complex process of cultural transmission. From this perspective, we can say that it seeks to answer the question of why do certain organizations take a particular shape and form (Hall and Taylor, 1996).

Sociological Institutionalism is concerned with the legitimacy of organizations and bureaucracy. This branch of institutionalism considers that legitimate institutions get bureaucratized essentially following the norms that culture imposes. That is to say, institutions are shaped by culture, to the point that it is difficult to find two with a perfect resemblance since they must be adapted to the context in which they are reproduced or take place. Although certain degree of affinity can be found, for example, in the education systems of different countries, which researchers of this form of new institutionalism call isomorphism. If it is so that culture is the ultimate determinant of the shape of organizations and the structures of institutions, then there would be no room in this current for this type of isomorphism, but said concept is cleverly explained by the natural similarity of the needs of every human community in the world. Since we all have the same basic needs, and advances in those specific areas have been done to make them more efficient, it is logical to think that structures in some degree will copy a functioning model (Meyer and Rowan, 1977).

The most important factor for a social behaviour to be transformed into an institution and ultimately bureaucratized is the legitimacy gained among the actors of the society (Finnemore, 1996). The State is considered to be the ultimate example of such phenomenon. Finnemore (1996) argues that institutions are constantly challenged because of the contradictions within the dominant cultural norms, pointing at their constant need to refresh and renew their legitimacy to ensure endurance. In this idea lies the concept of institutional change according to the sociological discipline. They argue that organizations often adopt and promote new institutional practices, leaving aside the rational concern of efficiency and cost reduction, to increase the legitimacy of such organization (Hall and Taylor, 1996). Ironically, though, following Finnemore (1996), institutionalized bureaucracies are rationally substituted for other institutionalized bureaucracies for reasons that go against a rational scope.

As for my opinion, sociological institutionalism does not really focuses on explaining the change in institutions but rather excuses the fact that institutions change by saying it is all a matter of the legitimacy of the organizations trying to stand the test of time. If it is so, that organizations have the power to shape the structural context of behaviour in such way as to regulate what is considered wrong and right behaviour, then there would be little stopping organizations from assuming total control of society they indirectly direct. Further, it is clear that they deny strongly the grand rational assumption that individuals act rationally (which I consider an appropriate critique) upheld by Rational Choice Institutionalism, yet they reinforce with the same effervescence the rational claim that all organizations act rationally in pursue of their interest moulding institutions accordingly. Finally, for a branch of new institutionalism that claims that context is the key concept in the development and understanding of the institutions, saying that change is only promoted by organizations, is undermining the possibilities of cultural diversity, as proven recently by the Arab Spring or , not so recently, the communist revolutions on the beginning of the 20th century.

Historical Institutionalism

Since the 1990s there has been an increment in the importance that ideas, economic interest and political institutions have and the relation between them. This has led to a great transformation of the historical institutionalism school trying to explain political outcomes (Béland, 2005).

Historical Institutionalism took great influence from structural functionalist, but for a change, they reject the idea that psychological, cultural, social or any individual trait could be extrapolated as a general characteristic of the system that contains them. Instead they suggest that institutional organizations shape the behaviour of the collective, thus generating political outcomes (Hall and Taylor, 1996). In this analysis they include the factor of rationality of the individual and the organizations but under an historical interpretation of the culture in order to decode the interpretation of both the norm and what was considered rational in such a context (Ferejohn, 1991; Thelen, 1999). This way, Historical Institutionalism has a pivotal approach that comprehends and exceed the previously two analysed (Hall and Taylor, 1996), specifically when one analyses the cultural and calculus approaches.

Hay and Wincott (1998) argue that Hall and Taylor (1996) are trying to propose a dialogue between the Sociological Institutionalism and the Rational Choice Institutionalism by incorporating the cultural and calculus approaches to the Historical branch. The calculus approach assume that in every period of time, individuals tend to act strategically to maximize their gain, and institution provide a frame to make it easier to predict and limit the set of actions possible to take place. Now the Historical Institutionalism part in this approach is that the possibilities are reviewed into the historical context surrounding the decisions taken. The cultural approach contrast the calculus without denying it, analysing the degree on which individuals leave aside the rational decision, and lean to familiar structures or established routines. But for that it is necessary to comprehend the historical and contextual rational decision that was left aside and the familiar structures and established routines of such individual in that precise time (Hall and Taylor, 1996).

The main contribution of Historical Institutionalism leads logically to the concept of path dependency. This is the assumption that the same processes can generate different results on different places because there are no two equal circumstances, an assumption that can be considered axiomatic, and therefor problematic (Hall and Taylor, 1996). One way to look at it is that the specific order in which things occur affect how they occur (Hay and Wincott, 1998; Fioretos, 2011). Following Fioretos (2011) the particular timing and sequence in which a phenomenon takes place contributes to four characteristics that remark the importance of context: i) unpredictability, by which it is expected that outcomes on similar events vary in great manner; ii) inflexibility, the idea that as more time passes, it gets harder to reverse the effects of such event; iii) nonergodicity, the probability that this effects can stand the test of time; iv) inefficiencies, the fact that abandoned ideas and alternatives might have produced more efficient outcomes but are out of the possibility range anymore.

Another concept that is essential to path dependence is “historical inefficiency” (Fioretos, 2011: 376). The idea that the specific consequences of the path dependence of one precise experience would make institutional alternatives designed in a different context, far more likely to fail, despite of the fact that analysis of utility models may indicate their superior expected performance (Fioretos, 2011).

The concept of path dependence, although taken from a blend between Rational Choice Institutionalism and Sociological Institutionalism, particularly from and formed inside the original contributions of Historical Institutionalism renders the first two approaches out-dated and unhelpful when talking about institutional change (Thelen, 1999). Change is comprehended as the outcomes, whether they are intended or not, of a set of strategic actions that are conceived inside the context of institutions in a definite time and space that provided the conditions needed to favour certain choices over others (Hay and Wincott, 1998). And that exact analysis is only provided by Historical Institutionalism thanks to the incorporation of calculus approach and cultural approach and path dependence.

Since the concept of path dependence tell us that there is no way in which we can calculate with certainty what will be the overall cost of choosing an option over another when undergoing institutional change, considering unknown factors may intervene and affect the outcome, there is no way of formulating a model that can apply to any situation without risking a mayor margin of error (Harty, 2005). By leaving aside grand generalizations Historical Institutionalism can easily surpass the barriers of Sociological Institutionalism and Rational Choice, of assuming that organizations only use institutional change to reinforce their legitimacy and that every institutional change made in any context must fall into a rational choice, respectively.

Moreover by not denying rationality, Historical Institutionalism does not fall in the contradiction of using Rational Choice to understand the behaviour of organizations or individuals, such as the case of the Sociological branch.

Lastly, in my opinion, Historical Institutionalism is stronger than Rational Choice also, because it contemplates real change on institutions and not merely the evolution of them, since they hold no delusion of a supposed pre-calculated plan by institutions to transform within in order to avoid undergo real change. And is stronger than Sociological Institutionalism, also, as a result of giving the deserved and necessary level of importance to context as a determinant of the outcome and structure of the institutional change process.

Conclusions

We have showed that Historical Institutionalism has a more precise and deeper view of institutional change than the other forms of new institutionalism, Rational Choice Institutionalism and Sociological Institutionalism.

I have compared the concept of change in the three branches, and found that Rational Choice Institutionalism and Sociological Institutionalism have a reduced view of what composes and provokes change leading to unsatisfactory conclusions that leave aside important parts of the reality without encompassing the inputs of one another.

Rational Choice Institutionalism, due to its genesis, has defined a very limited scope, and only considers change to happen within and according to the institution’s plan, assuming that in every step of the way, rationality is a perfect process undergone by every individual and actor in the society. Historical Institutionalism embraces a wider view of what constitutes change, enabling it to study a much substantial range of political situations that would be left out by Rational Choice. Moreover Historical Institutionalism goes as deep as to question what seemed like a rational choice in the context of analysis, providing with a view that does not deny rationality but also, does not consider it to be fixed and static.

Sociological Institutionalism denies the absolute rationality that is assumed by Rational Choice Institutionalism. Scholars in this branch understand institutional change as the tool that organizations use to endure in time. They suggest that organizations are the ones that promote and seek institutional changes that fit their own maximization of benefits, but by doing this; they make use of the principle that they so firmly oppose from Rational Choice. Sociological Institutionalism only analyses context as a force that shapes the form of the institutions upheld by a society. Historical Institutionalism gives much more importance to context, saying it can determine not only the particular shape of an institution, but also argues that we should take into consideration the values and possibilities provided by the context. It also calls upon the importance of context in the elaboration of the concept path dependency under which it is understood that due to the specifics of some situations, the same process may have different results. Lastly, since Historical Institutionalism does not deny rationality of actors, rather than question what rationality is, it does not fall on the contradiction that we saw on Sociological Institutionalism.

We have seen how Historical Institutionalism, thanks to the calculus and cultural approaches and the path dependency concept is a synthesis of the Rational Choice Institutionalism and Sociological Institutionalism. Historical Institutionalism is capable of analysing much deeper into political phenomena by bringing together concepts of both and stating that results may not replicate in the exact same way due to the differences in context. Therefore not intending to push grand assumptions or create laws on studies and in that what being able to widen the range of situations to study.

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