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New institutionalism or neo-institutionalism is a school of thought that focuses on developing a sociological view of institutions—the way they interact and how they affect society. It provides a way of viewing institutions outside of the traditional views of economics by explaining why and how institutions emerge in a certain way within a given context. This institutional view argues that institutions have developed to become similar (showing an isomorphism) across organizations even though they evolved in different ways, and has studied how institutions shape the behavior of actors (i.e. people, organizations, and governments).
The study of institutions and their interactions has been a focus of academic research for many years. In the late 19th and early 20th century, social theorists began to systematize this body of literature. One of the most prominent examples of this was the work of German economist and social theorist Max Weber; Weber focused on the organizational structure (i.e. bureaucracy) within society, and the institutionalization created by means of the iron cage which organizational bureaucracies create.
In Britain and the United States, the study of political institutions dominated political science until the 1950s. This approach, sometimes called 'old' institutionalism, focused on analyzing the formal institutions of government and the state in comparative perspective. It was followed by a behavioral revolution which brought new perspectives to analyzing politics, such as positivism, rational choice theory, and behavioralism, and the narrow focus on institutions was discarded as the focus moved to analyzing individuals rather than the institutions which surrounded them.
Institutionalism experienced a significant revival in 1977 with an influential paper published by John W. Meyer of Stanford University and his Ph.D. student at the time, Brian Rowan. The revised formulation of institutionalism proposed in this paper prompted a significant shift in the way institutional analysis was conducted. Research that followed became known as "new" institutionalism, a concept that is generally referred to as "neo-institutionalism" in academic literature.
Another significant reformulation occurred in the early 1980s when Paul DiMaggio and Walter W. Powell consciously revisited Weber's iron cage. The following decade saw an explosion of literature on the topic across many disciplines, including those outside of the social sciences. Examples of the body of work in the decade which followed can be found in DiMaggio and Powell's 1991 anthology in the field of sociology; in economics, the Nobel Prize-winning work of Douglass North is a noted example.
New institutionalism posits that institutions operate in an open environment consisting of other institutions, called the institutional environment. Every institution is influenced by the broader environment (or institutional peer pressure). In this environment the main goal of organizations is to survive and gain legitimacy. In order to do so, they need to do more than succeed economically, they need to establish legitimacy within the world of institutions.
Much of the research within new institutionalism deals with the pervasive influence of institutions on human behavior through rules, norms, and other frameworks. Previous theories held that institutions can influence individuals to act in one of two ways: they can cause individuals within institutions to maximize benefits (regulative institutions, also called rational choice institutionalism), similar to rational choice theory or to act out of duty or an awareness of what one is "supposed" to do (normative institutions, also called historical institutionalism). An important contribution of new institutionalism was to add a cognitive influence. This perspective adds that, instead of acting under rules or based on obligation, individuals act because of conceptions. According to prominent organisational sociologist Richard Scott, "Compliance occurs in many circumstances because other types of behavior are inconceivable; routines are followed because they are taken for granted as 'the way we do these things'" (p. 57) —also called social institutionalism. Individuals make certain choices or perform certain actions not because they fear punishment or attempt to conform; neither do they do so because an action is appropriate or the individual feels some sort of social obligation. Instead, the cognitive element of new institutionalism suggests that individuals make certain choices because they can conceive of no alternative.
In a 1990 article Terry Karl portrays institutions as constraining the preferences and policy choices of elite actors' during transition. The focus upon economics in this article is misleading; institutions are politics: they are the substance of which politics is constructed and the vehicle through which the practice of politics is transmitted.[according to whom?] New institutionalism was born out of a reaction to the behavioural revolution. In viewing institutions more widely as social constructs, and by taking into account the influence that institutions have on individual preferences and actions, new institutionalism has moved away from its institutional (formal legal descriptive historical)[vague] roots and become a more explanatory discipline within politics.
More-recent work has begun to emphasize multiple competing logics, focusing on the more-heterogeneous sources of diversity within fields and the institutional embeddedness of technical considerations . The concept of logic generally refers to broader cultural beliefs and rules that structure cognition and guide decision-making in a field. At the organization level, logic can focus the attention of key decision-makers on a delimited set of issues and solutions , leading to logic-consistent decisions that reinforce extant organizational identities and strategies . In line with the new institutionalism, social rule system theory stresses that particular institutions and their organizational instantiations are deeply embedded in cultural, social, and political environments and that particular structures and practices are often reflections of as well as responses to rules, laws, conventions, paradigms built into the wider environment (Powell, 2007).
New institutionalism can take different focuses and can draw its inspiration from different disciplines. The following sections briefly outline some types of new institutional study:
Much of the introduction of this article relates to a normative view, sometimes seen as the "original" new institutionalism. Normative institutionalism is a sociological interpretation of institutions and holds that a "logic of appropriateness" guides the behavior of actors within an institution. It predicts that the norms and formal rules of institutions will shape the actions of those acting within them. According to James March (1994, 57–58), the logic of appropriateness means that actions are "matched to situations by means of rules organized into identities." Thus normative institutionalism views that much of the behavior of institutional actors is based on the recognized situation that the actors encounter, the identity of the actors in the situation, and the analysis by the actor of the rules that generally govern behavior for that actor in that particular situation.
Rational choice institutionalismEdit
This approach contrasts with normative institutionalism: rather than a series of calculated actions designed to maximize perceived benefit, any given actor within an institution will feel constrained and obligated by the norms and rules of the institution.
Rational choice institutionalism draws heavily from rational choice theory but is not identical to it. Proponents argue that political actors' rational choices are constrained (called "bounded rationality"). These bounds are accepted as individuals realize their goals can be best achieved through institutions. In other words, institutions are systems of rules and inducements to behavior in which individuals attempt to maximize their own benefit.
This version of institutionalism states that "history matters". Paths chosen or designed early in the existence of an institution tend to be followed throughout the institution's development. Institutions will have an inherent agenda based on the pattern of development, both informal (the way things are generally done) and formal (laws, rule sets and institutional interaction).
A key concept is path dependency: the historical track of a given institution or political entity will result in almost inevitable occurrences. In some institutions, this may be a self-perpetuating cycle: actions of one type beget further actions of this type.
This theory does not hold that institutional paths will forever be inevitable. Critical junctures may allow rapid change at a time of great crisis.
Sociological institutionalism is a form of new institutionalism that concerns "the way in which institutions create meaning for individuals, providing important theoretical building blocks for normative institutionalism within political science".
This theory concerns the problem of whether institutions in fact matter. For example, one of the questions empirical institutionalism deals with is presidential or parliamentary system and whether is a better system or not.
Actor-centered institutionalism, also called neo-institutionalism,[inconsistent] emphasizes the autonomy of political institutions from society in which they exist. It assumes a greater influence on human behaviour coming from the socio-political environment surrounding people and organizations than from within individual or group-based interactions.
Since 2000 a number of authors have used the term constructivist institutionalism or discursive instituionalism, which is described as a more "dynamic approach to institutional change than the older three new institutionalisms". Constructivist institutionalists assert that political, social, or policy discourses can perform communicative functions: actors publicly expressing ideas can lead to social change, or coordinating functions. Thus ideas and meaning provide a mechanism for multiple actors to achieve consensus on norms and values and thus create social change. This is increasingly moving beyond political science and into international relations theory and foreign policy analysis.
Feminist institutionalism is a new institutionalist approach that looks at "how gender norms operate within institutions and how institutional processes construct and maintain gender power dynamics".
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New institutionalism is often contrasted with "old" or "classical" institutionalism, the latter of which was first articulated in the writings of John Dewey, Thorstein Veblen, John Commons, and others, and which has been further extrapolated by various philosophers and scholars such as Donald Davidson, Richard Rorty, Amartya Sen, Donald McCloskey, Warren Samuels, Daniel Bromley, E. J. Mishan, and Yngve Ramstad.
Proponents of the older institutionalism are strongly opposed to new institutionalism, most saliently in the manner in which new institutionalism seeks to explain institutional change as merely another instance of maximization. Instead, old institutionalism seeks to articulate reasons for the institutional change in terms of social and political volition.
There is an academic skepticism that new institutionalism implies a top-down approach and neglects to match each developmental meaning to its timely event. Casual interpretations may thus take retrospective views toward historical paths. In contrast, classical institutionalism theory had originally been derived from national response to public demands on politico-economic changes.
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