Monday, December 12, 2005

New Institutionalism

Theoretical discourse dynamically evolves over time, as it responds to the emerging trend of the moment and the specific needs of the scholars. Thus, the rationalization of reality through conception of theories is a fluid task that requires continues refinement process. This cyclical process ensures the absence of monopoly of but a single perspective, and compels future theories to patch up the flaws of their predecessors (for lack of a beter term).
The idea of institutionalism was brought forth at the onset of rapid globalization and bureaucratization. This institutionalism adopted the traditional definition of the state - who components include state structures and the government. The formal institutions and the formal structures are the basic unit of analysis for this institutionalism. As it was to formalist, abstract, and statist, it was for w while overshadowed by more individual-centered theories like raional choice and behavioralism. As these rival theories does not ignore the role of the individual as institutionalism does, it was deemed more appropriate as tools for analysis in the social sciences. The response thereafter was the idea of new institutionalism, which saw the marriage of the state and the society - how institutions and structures would determine and regulate individual behavior.

Old Institutionalism vis-a-vis New Institutionalism
Old institutionalism assumes that institutions are the totality of man's actions. Institutions are defined as "settled habits of thought common to the generality of men." (Veblen) New institutionalism would define institutions as the "humanly devised constraints that shape human interaction." (North) The focus therefore of new institutionalism are the 'constraints to human interaction' as opposed to the 'formed/acquired habits' of old institutionalism.
For the old institutionalist, the scope of institutionalism are the structures (rather than processes) in the social milieu and the coordination of organizations. New institutionalist on the other hand focuses not sole on the grand structures, but incorporates aspects of its rival theories - behavioralism and rational choice- which recognizes the consequential role of social and political actors. New institutional would focus on the interactions of the institution and the individual.

(All Readings. Lecture of Dr. Teehankee.)
North, Douglas. (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
Hodgson, Geoffrey. (n.d.). "The approach of institutional economics". JEL. Vol. 86, p. 166-192.


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