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Institutions are structures and mechanisms of social order and cooperation governing the behavior of a set of individuals within a given human collectivity. Institutions are identified with a social purpose and permanence, transcending individual human lives and intentions, and with the making and enforcing of rules governing cooperative human behavior. The term "institution" is commonly applied to customs and behavior patterns important to a society, as well as to particular formal organizations of government and public service. As structures and mechanisms of social order among humans, institutions are one of the principal objects of study in the social sciences, including sociology, political science, and economics. Institutions are a central concern for law, the formal mechanism for political rule-making and enforcement. The creation and evolution of institutions is a primary topic for history.
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Aspects of institutions
The trade of goods.
Perspectives of the social sciences
While institutions tend to appear to people in society as part of the natural, unchanging landscape of their lives, study of institutions by the social sciences tends to reveal the nature of institutions as social constructions, artifacts of a particular time, culture and society, produced by collective human choice, though not directly by individual intention.
The relationship of institutions to human nature is a foundational question for the social sciences. Institutions can be seen as "naturally" arising from, and conforming to, human nature—a fundamentally conservative view—or institutions can be seen as artificial, almost accidental, and in need of architectural redesign, informed by expert social analysis, to better serve human needs—a fundamentally progressive view. Adam Smith anchored his economics in the supposed human "propensity to truck, barter and exchange". Modern feminists have criticized traditional marriage and other institutions as element of an oppressive and obsolete patriarchy. The Marxist view which sees human nature as historically 'evolving' towards voluntary social cooperation, shared by some anarchists, is that supraindividual institutions such as the market and the state are incompatible with the individual liberty which would obtain in a truly free society.
Economics, in recent years, has used game theory to study institutions from two perspectives. Firstly, how do institutions survive and evolve? In this perspective, institutions arise from Nash equilibria of games. For example, whenever people pass each other in a corridor or thoroughfare, there is a need for customs, which avoid collisions. Such a custom might call for each party to keep to their own right (or left—such a choice is arbitrary, it is only necessary that the choice be uniform and consistent). Such customs may be supposed to be the origin of rules, such as the rule, adopted in many countries, which requires driving automobiles on the right side of the road.
Secondly, how do institutions affect behaviour? In this perspective, the focus is on behaviour arising from a given set of institutional rules. In these models, institutions determine the rules (i.e. strategy sets and utility functions) of games, rather than arise as equilibria out of games. For example, the Cournot duopoly model is based on an institution involving an auctioneer who sells all goods at the market-clearing price. While it is always possible to analyse behaviour with the institutions-as-equilibria approach instead, it is much more complicated.
In political science, the effect of institutions on behavior has also been considered from a meme perspective, like game theory borrowed from biology. A "memetic institutionalism" has been proposed, suggesting that institutions provide selection environments for political action, whereby differentiated retention arises and thereby a Darwinian evolution of institutions over time.
Public choice theory, another branch of economics with a close relationship to political science, considers how government policy choices are made, and seeks to determine what the policy outcomes are likely to be, given a particular political decision-making process and context.
Sociology traditionally analyzed social institutions in terms of interlocking social roles and expectations. Social institutions created and were composed of groups of roles, or expected behaviors. The social function of the institution was executed by the fulfillment of roles. Basic biological requirements, for reproduction and care of the young, are served by the institutions of marriage and family, for example, by creating, elaborating and prescribing the behaviors expected for husband/father, wife/mother, child, etc.
In history, a distinction between eras or periods, implies a major and fundamental change in the system of institutions governing a society. Political and military events are judged to be of historical significance to the extent that they are associated with changes in institutions. In European history, particular significance is attached to the long transition from the feudal institutions of the Middle Ages to the modern institutions, which govern contemporary life.
References
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This article includes a list of references, related reading or external links, but its sources remain unclear because it lacks inline citations. Please improve this article by introducing more precise citations where appropriate. (July 2009) |
- Berger, P. L. and T. Luckmann (1966), The Social Construction of Reality: A Treatise in the Sociology of Knowledge, Anchor Books, Garden City, NY.
- Chang, Ha-Joon (ed.) (2007), Institutional Change and Economic Development, Anthem Press.
- Greif, Avner (2006), Institutions and the Path to the Modern Economy: Lessons from Medieval Trade, Cambridge University Press, ISBN 9780521671347
- North, D. C. (1990), Institutions, Institutional Change and Economic Performance. Cambridge University Press, Cambridge.
- Schotter, A. (1981), The Economic Theory of Social Institutions. Cambridge University Press, Cambridge.
External links
- International Society for New Institutional Economics
- Institutional reform
- "Social Institutions," Stanford Encyclopedia of Philosophy