Political Science and the Three New Institutionalisms

Overview and Genesis of the Three New Institutionalisms

  • Definition and Scope of the Term:

    • The term 'new institutionalism' emerged with increasing frequency in political science starting in the late 1970s and 1980s.
    • It does not represent a unified body of thought, but rather encompasses at least three distinct analytical approaches: historical institutionalism, rational choice institutionalism, and sociological institutionalism.
    • A fourth potential school, the 'new institutionalism in economics', overlaps heavily with rational choice institutionalism; rational choice institutionalism puts greater emphasis on strategic interaction, whereas new institutional economics stresses property rights, rents, and competitive selection mechanisms (Eggertsson 1990; Putterman 1986).

  • Common Foundations and Shared Objectives:

    • All three schools developed in reaction to the behavioralist perspectives dominant in political science during the 1960s and 1970s.
    • All three schools seek to elucidate the precise role that political and social institutions play in determining social and political outcomes.
    • Despite shared interests, these three approaches developed in relative isolation from one another, marked by a paucity of cross-references and minimal interchange prior to the mid-1990s.

Historical Institutionalism

  • Genesis and Theoretical Foundations:

    • The term 'historical institutionalism' was coined by Sven Steinmo, Kathleen Thelen, and Frank Longstreth (1992).
    • The school developed in response to group theories of politics (pluralism) and structural-functionalism prominent in the 1960s and 1970s (Chilcote 1981; Bill and Hardgrave 1981).
    • From group theory, historical institutionalists accepted the premise that conflict among rival groups for scarce resources lies at the heart of politics. However, they rejected pluralist conclusions, seeking better explanations for national outcome distinctiveness and structural inequalities.
    • They found these explanations in how the institutional organization of the polity and economy structures conflict, privileging specific interests while demobilizing others. This built on older political science traditions prioritizing formal political institutions (Eckstein and Apter 1963), expanded to encompass a broader array of institutional forms.
    • From structural-functionalism, historical institutionalists accepted the systemic view of the polity as an interacting whole (Almond and Powell 1956). However, they rejected the emphasis on individual social, psychological, or cultural traits as primary system drivers, prioritizing instead the 'structuralism' implicit in institutional organization over functionalist system 'needs'.
    • Pluralist and neo-Marxist debates of the 1970s regarding the state played a critical role (Blackburn 1972; Block 1987; Carnoy 1984), leading historical institutionalists to conceptualize the state as a complex of institutions capable of structuring group conflict outcomes rather than as a neutral broker (Evans et al. 1985; Krasner 1980; Katzenstein 1978).
    • Scholars extended institutional analysis to national labor movements, employer organization, financial systems, and neo-corporatism (Zysman 1983; Schmitter and Lehmbruch 1982; Hall 1986; Goldthorpe 1984; Soskice 1990; Scharpf 1992).
    • Cross-national policy comparisons highlighted how national political structures condition relations between legislators, organized interests, electorates, and judiciaries (Steinmo et al. 1992; Weaver and Rockman 1993).

  • Conceptualizing Institutions:

    • Institutions are defined as the formal or informal procedures, routines, norms, and conventions embedded in the organizational structure of the polity or political economy (Thelen and Steinmo 1992; Hall 1986; Ikenberry 1988).
    • Range of institutions includes constitutional rules, bureaucratic standard operating procedures (SOPs), trade union conventions, and bank-firm relationships.
    • Institutions are generally associated with formal organizations and the rules or conventions promulgated by them.

  • Four Distinctive Features:

    • Broad Conceptualization of Institution-Actor Relationships: Employs both calculus and cultural frameworks to explain individual behavior.
    • Prominence of Power Asymmetries: Focuses on how institutions distribute power unevenly across groups, giving disproportionate access to decision-making to specific interests rather than creating win-win scenarios (Steinmo 1993 on tax policy; Weir 1992 on political coalition formation).
    • Path Dependence and Historical Dynamics: Rejects the claim that identical forces produce identical results everywhere. Operative forces are mediated by contextual, historical institutional features inherited from the past (Collier and Collier 1991; Downing 1992; Krasner 1988).
    • Historical trajectories are driven by existing state capacities and policy legacies (Weir and Skocpol 1985).
    • Past policies generate policy feedback, encouraging social forces to organize along specific lines, adopt particular identities, or develop vested interests in existing arrangements (Pierson 1993, 1994; Jenson 1989; Katznelson 1981).
    • Highlights institutional inefficiencies and unintended consequences over pure system efficiency (March and Olsen 1984; North 1990).
    • Views history as periods of continuity punctuated by 'critical junctures'—formative moments where substantial institutional change creates branching points for new developmental paths (Gourevitch 1986; Collier and Collier 1991; Krasner 1984; Skocpol 1979).
    • Integration with Non-Institutional Causal Factors: Integrates institutions into broader causal chains containing socioeconomic developments and the diffusion of ideas (Goldstein 1988 on US trade policy; Weir 1989 on Keynesianism timing in Britain vs. the US; Sikkink 1991 on developmentalism in Brazil and Argentina).

Theoretical Approaches to Institution-Actor Dynamics

  • The Calculus Approach:

    • Behavioral Postulates: Actors are instrumental, utility-maximizing, strategic calculators operating under exogenous preference functions.
    • Institutional Function: Institutions provide information about other actors, enforcement mechanisms for agreements, and penalties for defection, thereby reducing uncertainty and altering expectations of others' behavior.
    • Institutional Persistence: Institutions persist because they reflect a Nash equilibrium where deviation makes an individual worse off (Calvert 1995). Robustness increases with the institution's ability to resolve collective action dilemmas and facilitate gains from exchange (Shepsle 1986; Grafstein 1992).
    • Exemplar: Ellen Immergut (1992) explains health care reform variations via physicians' willingness to compromise based on political veto points shaping expectations of reform appeal success.

  • The Cultural Approach:

    • Behavioral Postulates: Actors have bounded rationality, acting as satisficers relying on routines, worldviews, and interpretations of situations rather than pure instrumental calculation.
    • Institutional Function: Institutions provide moral and cognitive templates, symbols, scripts, and routines that filter interpretation of the world and construct actor identities, self-images, and preferences (March and Olsen 1989).
    • Institutional Persistence: Institutions persist because their conventions are taken for granted, escaping direct scrutiny and structuring the choices available for institutional reform.
    • Exemplar: Victoria Hattam (1993) demonstrates how judicial review power led the US labor movement to adopt business unionism strategies that ossified over time into distinct union worldviews and identities, contrasting with British trade unions.

Rational Choice Institutionalism

  • Genesis and Theoretical Foundations:

    • Developed in the late 1970s primarily within the study of American congressional behavior.
    • Formulated to resolve a core theoretical paradox: classic social choice theory predicts majority rule disequilibrium and endless legislative cycling in multidimensional voting spaces (Riker 1980; McKelvey 1976; Ferejohn and Fiorina 1975), yet congressional legislative outcomes exhibit high stability.
    • Solution: Congressional procedural rules and committee structures restrict agendas, allocate jurisdiction, and provide enforcement mechanisms for logrolling, lowering transaction costs to enable gains from exchange and solve collective action problems (Shepsle 1989; Weingast and Marshall 1988).
    • Analytical Borrowings from the New Economics of Organization:
    • Transaction cost economics and property rights (Moe 1984; Williamson 1975, 1985; North and Thomas 1973).
    • Principal-agent theory: Monitoring and enforcement mechanisms used by principals to control agents (Milgrom and Roberts 1992; Pratt and Zeckhauser 1991).
    • Domain Expansion:
    • Congressional committees, regulatory oversight, and party leadership (McCubbins and Sullivan 1987; Cox and McCubbins 1987; Ferejohn 1991; Shepsle and Weingast 1994; Moe 1987; McCubbins and Schwartz 1984).
    • Coalition government and cabinet stability (Laver and Shepsle 1990).
    • Constitutional developments and historical political rights (North and Weingast 1989).
    • Ethnic and regional conflict management (Weingast 1994).
    • Democratic transitions analyzed via game theory (Przeworski 1991; Geddes 1994; Marks 1992; Cohen 1994; deNardo 1985).
    • European Union institutional reform (Tsebelis 1994; Pollack 1995; Martin 1994).
    • International regimes, multilateralism, and state delegation to international organizations (Keohane and Martin 1994; Martin 1992; Oye 1993; Krasner 1991).

  • Four Distinctive Features:

    • Characteristic Behavioral Assumptions: Fixed, exogenous, transitive preferences; instrumental behavior designed to maximize preference attainment; highly strategic calculation (Shepsle and Weingast 1987; Elster and Hylland 1986).
    • Image of Politics as Collective Action Dilemmas: Politics consists of instances where individual preference maximization leads to collectively sub-optimal outcomes (e.g., Prisoner's Dilemma, Tragedy of the Commons) due to missing institutional guarantees for complementary behavior (Hardin 1968, 1982; Ostrom 1990).
    • Strategic Interaction Mechanics: Behavior is driven by strategic calculation conditioned by expectations of others' behavior. Institutions alter available options, sequence agendas, and reduce behavioral uncertainty.
    • Deductive and Functionalist Explanation of Institutional Origins:
    • Institutional origins are explained deductively by identifying the functions an institution performs and the value (gains from cooperation) these functions deliver to actors.
    • Assumes voluntary agreement among relevant actors or competitive selection mechanisms where superior functional efficiency ensures survival (Milgrom and Roberts 1990; Krehbiel 1991).
    • Examples: Firms minimize transaction and influence costs; congressional rules secure legislative gains from exchange; 1680s English constitutional changes protect property rights.

Sociological Institutionalism

  • Genesis and Theoretical Foundations:

    • Originated in organization theory during the late 1970s (Meyer and Rowan 1977; Meyer and Scott 1983; DiMaggio and Powell 1991).
    • Challenged Weberian claims that modern bureaucratic organizational forms emerge purely from technical efficiency or means-ends rationality.
    • Central Thesis: Bureaucratic forms and procedures are culturally specific practices—akin to social myths and ceremonies—adopted not for technical efficiency, but to secure social legitimacy (Dobbin 1994).
    • Problematic Focus: Explaining why diverse organizations adopt uniform institutional forms, procedures, and symbols, and how these practices diffuse across organizational fields and borders.
    • Applications:
    • Global standardization of Education Ministries.
    • Proliferation of corporate employee training programs (Scott et al. 1994).
    • East Asian organizational isomorphism (Orru et al. 1991; Cole 1989).
    • Corporate diversification in American industry (Fligstein 1990).
    • Contemporary European and American immigration policies (Soysal 1994).

  • Three Distinctive Features:

    • Broad Definition of Institutions: Includes formal rules, procedures, and norms alongside symbol systems, cognitive scripts, and moral templates ('frames of meaning').
    • Blurs the boundary between 'institutions' and 'culture'.
    • Challenges political science distinctions between structural institutional explanations and cultural explanations (Almond and Verba 1963; Hall 1986).
    • Reflects a 'cognitive turn' in sociology, defining culture as a network of routines, scripts, and symbols rather than solely affective values (Swidler 1986; March and Olsen 1989; Zucker 1986).
    • Cognitive Dimension of Institution-Actor Impact:
    • Shifts emphasis from normative compliance (socialization into role norms) to cognitive construction.
    • Institutions provide the cognitive scripts, categories, and models essential for interpreting the world and imagining possible action (Berger and Luckmann 1966; Wendt 1987).
    • Social identities, self-images, and basic preferences are constituted through social institutional forms.
    • The relationship between individuals and institutions is mutually constitutive and interactive, based on 'practical reasoning' (DiMaggio and Powell 1991; Zucker 1991; Jepperson 1991).
    • Conceptions of 'rational action' are themselves socially constructed.
    • Institutional Origins via Social Legitimacy:
    • Institutional practices originate and spread because they enhance the social legitimacy of the organization within its broader cultural environment, even if dysfunctional for technical task performance.
    • Driven by a 'logic of social appropriateness' rather than a 'logic of instrumentality' (Campbell 1995; March and Olsen 1989).
    • Sources of Cultural Legitimacy:
      • Direct regulatory state imposition.
      • Professionalization and professional community norms (DiMaggio and Powell 1983; Powell 1991).
      • Interactive networking, business schools, and shared cognitive mapping (Campbell 1995).
      • Transnational concepts of modernity and international regime dynamics (Meyer et al. 1987; Strang and Meyer 1994).

Comparative Evaluation: Strengths and Weaknesses

  • Evaluating the Institution-Behaviour Relationship:

    • Historical Institutionalism:
    • Strength: Commodious and realistic framework combining both calculus and cultural approaches.
    • Weakness: Lacks theoretical precision regarding the exact causal chains through which institutions directly dictate behavior.
    • Rational Choice Institutionalism:
    • Strength: High analytical precision, systematic theory-building, and strong focus on strategic interaction, information flows, and uncertainty management.
    • Weakness: Relies on a simplistic model of human motivation. Predictions are highly sensitive to small, arbitrary changes in payoff matrix assumptions (Friedman 1953; Green and Shapiro 1994). Treats preferences exogenously, limiting application when actor goals are multifaceted or ambiguous (Cook and Levi 1990; Mansbridge 1990).
    • Sociological Institutionalism:
    • Strength: Captures cognitive antecedents to instrumental action, explaining preference formation, identity construction, and the cultural boundaries of strategic choice repertoires (Johnson 1994).

  • Evaluating Explanations of Institutional Origins and Change:

    • Rational Choice Institutionalism:
    • Strength: Highly elegant explanations of institutional persistence based on functional utility and cooperation gains.
    • Weaknesses:
      • Hyper-Functionalism: Deduces institutional origins solely from current outcomes/effects, ignoring pervasive unintended consequences (Bates 1987; Moe 1990).
      • Hyper-Intentionalism: Assumes unrealistic actor prescience and precise control over historical outcomes (North and Weingast 1989; Knight 1992).
      • Hyper-Voluntarism: Treats institutional creation as quasi-contractual agreement among equals, masking power asymmetries (Bates 1987; Grafstein 1992; Knight 1992).
      • Equilibrium Paradox: Modeling institutions as Nash equilibria makes explaining institutional change difficult, as actors lack incentive to alter an equilibrium state (Shepsle 1986).
      • Scope Limits: Most applicable to settings requiring consensus among equal strategic actors (legislatures, international bodies) or intense market competition selecting for efficiency (Ertman 1997; Root 1994; Runciman 1984).
    • Sociological Institutionalism:
    • Strength: Explains non-functional inefficiencies via social legitimacy motives and institutional template borrowing.
    • Weakness: Offers a 'bloodless' view of political processes that ignores material power clashes, competing interests, and political conflict, resulting in 'action without agents' (DiMaggio 1988; Fligstein 1990; Edelman 1990).
    • Historical Institutionalism:
    • Strength: Incorporates power asymmetries ('mobilization of bias'), path dependence, and inductive historical realism, utilizing neo-Weberian reconstructions of actor meaning (Schattschneider 1960; Swenson 1991; Rothstein 1991).
    • Weakness: Slow to aggregate inductive findings into a systematic, generalizable theory of institutional creation and change.

Synthesis and Prospects for Integration

  • Rationale and Limits of Integration:

    • The isolation of the three schools should be replaced by active interchange to resolve internal analytical gaps within each paradigm.
    • Full theoretical unification is constrained by fundamental incompatibilities on first principles (e.g., exogenous preferences vs. socially constructed identities; universal strategic rationality vs. culturally bounded rationality).
    • Substantive complementarity exists because human action simultaneously exhibits strategic calculation and cultural framing.

  • Substantive Complementarities:

    • Institutional rules and cultural templates operate side-by-side in real-world contexts (e.g., 1950s French workers were constrained both by divided union structures [calculus incentives to free-ride] and syndicalist union ideologies [cultural/historical barriers to cooperation]).
    • Both calculus and cultural approaches recognize that institutions function by structuring expectations about the behavior of other actors.
    • Strategic actors select options from historically and culturally bounded repertoires of appropriateness.

  • Existing Models of Theoretical Synthesis:

    • Corporate Culture as Information Sets: David Kreps (1990) incorporates corporate culture into rational choice agency models as shared cognitive templates that provide focal points where formal contracts cannot specify responses to unexpected contingencies.
    • Ideas and Norms as Focal Points: Geoffrey Garrett and Barry Weingast (1993) and Stephen Krasner (1991) demonstrate that cultural ideas and norms act as 'focal points' allowing rational actors to select a single outcome among multiple Nash equilibria.
    • Decision Rules and Decision Styles: Fritz Scharpf (1989) models choices through a combination of institutional 'decision rules' (calculus payoff matrices) and actor 'decision styles' (cultural orientations toward relative vs. absolute gains). Similar dynamics explain long-term civic cooperation variations across Italian regions (Putnam 1993).
    • Signalling Games and Cultural Contexts: Robert Bates and Barry Weingast (1995) and John Ferejohn (1991) construct strategic interaction models where game signals require specific cultural contexts to transmit intended meaning.
    • Historical Institutionalism as a Bridge: Historical institutionalism synthesizes calculus and cultural perspectives by demonstrating how actors select institutions instrumentally (rational choice) from historically available cultural templates (sociological institutionalism) (Ertman 1997), and how initial strategic responses ossify into long-term cultural worldviews (Hattam 1993; Steinmo 1993; Immergut 1992; Hall 1994).