INSTITUTIONALISM
Institutionalism
• It is an approach that highlights the roles of the institutions, both formal and
informal. It was a reaction to prevailing strands of thought in the late 19th
century that ignored institutions, historical context, and practice that gave
way to wide-ranging hypothesizing.
• It is a theory that views institutions as humanly devised constraints that
structure political, economic, and social interactions.
• Within New Institutionalism, distinctions between the macro and micro level
of this theory has been emphasized.
• Old Institutionalism concentrates on state or government and how its various
laws are implemented to citizens.
Institutionalism
• While Old Institutionalism focused on how formal institutions constraints
human behavior, New Institutionalism recognizes the importance of both
formal and informal institutions in shaping social behavior.
• Historical institutionalism uses institutions to find cycles of social, political,
and economic behavior and change across time.
• In the Philippines, the historical institutionalist approach can be utilized in
examining the role of the state as being structurally unable to provide genuine
democracy to the Filipino people as it is still controlled by the political and
economic elites, making it challenging to broaden political participation and
making equitable distribution of resources impossible.
Historical Context
• The American economist and sociologist Thorstein Veblen was a leading figure who
described the neoclassical approach as being too focused on individuals when
Institutionalism made its debut during the late 19th and early 20th century. In the mid-20th
century, institutionalism found its way to anthropology through the works of Karl Polanyi,
who argued that economic interactions are historically dependent and can only be
understood in terms of their social context. Institutionalism made its appearance in
political science through Carl Friedrich. Institutionalism also made its way to sociology
through Chester Irving Bernard.
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• In the 1980s, studies in social structures paved the way for a resurgence of interest in
institutions and the appearance of New Institutionalism as initiated by political scientists
James March and Johan Olsen.
Key Concepts in Institutionalism
• Some key concepts in institutionalism are institutions, formal institutions,
and informal institutions. Institutions are often referred to as the “rules of the
game” (North, 1991). They are humanly devised constraints that affect human
interaction, devised by people to be able to gain control over their environment
for the purpose of bringing certainty in an uncertain world. They maybe
divided into formal and informal institutions. Informal institutions refer to
rules governing behavior outside official channels (or formal institutions such
as the government and the church) which may have constitutive and regulative
effects. Formal institutions, on the other hand, refer to those officially
established, often by governments. They are legally introduced and enforced by
the state.
Key Concepts in Institutionalism
• Formal and informal institutions not only constraints but also enable
human behavior such as choices and actions that otherwise would not
exist without the rules imposed by the institutions (Hodgson, 2006).
Thinkers and their Contributions
• Johan Olsen – He was born on August 14, 1939 in Norway. He is one of the developers of
the systematic-anarchic perspective of organizational decision-making known as garbage
Can Model. He is a prominent thinker and writer on a wide variety of topics such as new
institutionalism and Europenization.
• Max Weber - He was born on April 21, 1864 in Erfurt, Prussia (present day Germany). In
1903, he resigned from teaching and became the associate editor of the Archives for
Social Sciences and Social Welfare where his interest lied in more fundamental issues of
social sciences. He died on June 14, 1920. Some of his notable works are: The Protestant
Ethic and the Spirit of Capitalism, 1904; The City, 1912; The Sociology of Religion,1922;
General Economic History, 1923; and The Theory of Social and Economic Organization,
1925.
• James March – He was born in 1928 in Cleveland, Ohio. He is best
known for his research on organization and organizational decision
making. Together with Olsen, he launched new or neo-institutionalism
in 1984 as a reaction against various reductionist approaches that
attempt to explain how non-political factors affect the operation of
political institutions.
Institutionalism: Strengths and Criticisms
• New Institutionalism has often been classified into three school of
thought –rational choice institutionalism, historical institutionalism,
and sociological institutionalism (Bethani, 2011).
• One of the strengths of rational choice institutionalism would be its
emphasis on the role of deliberate interaction in determining political
results. It also explains how institutions originate, explaining the
functions they perform and the benefits they provide. It is being
criticized however, for its claim that rationality is the basic factor of
human choice in all undertakings.
Institutionalism: Strengths and Criticisms
• Sociological institutionalism’s strength lies in its broader definition of
institutions that involves formal and informal rules, norms, and
conventions. It claims that formal and informal institutions comprise
actors which in turn shape the way they view the world. Its weakness
seems to be its focus on macro-level analysis.
• Historical institutionalism’s strength also lies in its broader definition of
institutions which includes both formal and informal ones, and its focus
on the effect of institutions over time. Its weakness lies on its inability to
offer a refined comprehension of how institutions affect human behavior
(Bethani, 2011).