How Institutions Evolve

The institutional arrangements governing skill formation are widely seen as a key element in the institutional constellations defining 'varieties of capitalism' across the developed democracies. This book explores the origins and evolution of such institutions in four countries - Germany, Britain, the United States and Japan. It traces cross-national differences in contemporary training regimes back to the nineteenth century, and specifically to the character of the political settlement achieved among employers in skill-intensive industries, artisans, and early trade unions. The book also tracks evolution and change in training institutions over a century of development, uncovering important continuities through putative 'break points' in history. Crucially, it also provides insights into modes of institutional change that are incremental but cumulatively transformative. The study underscores the limits of the most prominent approaches to institutional change, and identifies the political processes through which the form and functions of institutions can be radically reconfigured over time.

Capitalism is the dominant economic framework in modern history, but it s unclear how it really works. Relying on the free movement and spontaneous coordination of seemingly infinitesimal market forces, its very essence is remarkably complex. Geoffrey M. Hodgson offers a more precise conceptual framework, defines the concepts involved, and illustrates that what is most important, and what has been most often overlooked, are institutions and contractsthe law. Chapter by chapter, Hodgson focuses in on how capitalism works at its very core to develop his own definitive theory of capitalism. By employing economic history and comparative analysis toward explanatory and analytical ends, Hodgson shows how capitalism is not an eternal or natural order, but indeed a relatively recent institution. If anyone were qualified to venture such a comprehensive and definitive analysis of such an important economic, legal, and social phenomenon, it is Geoffrey Hodgson. "Conceptualizing Capitalism" will significantly alter and carry forward our understanding of markets and how they work."

The essays in this book contribute to emerging debates in political science and sociology on institutional change, providing a theoretical framework and empirical applications.

In this novel introduction to modern microeconomic theory, Samuel Bowles returns to the classical economists' interest in the wealth and poverty of nations and people, the workings of the institutions of capitalist economies, and the coevolution of individual preferences and the structures of markets, firms, and other institutions. Using recent advances in evolutionary game theory, contract theory, behavioral experiments, and the modeling of dynamic processes, he develops a theory of how economic institutions shape individual behavior, and how institutions evolve due to individual actions, technological change, and chance events. Topics addressed include institutional innovation, social preferences, nonmarket social interactions, social capital, equilibrium unemployment, credit constraints, economic power, generalized increasing returns, disequilibrium outcomes, and path dependency. Each chapter is introduced by empirical puzzles or historical episodes illuminated by the modeling that follows, and the book closes with sets of problems to be solved by readers seeking to improve their mathematical modeling skills. Complementing standard mathematical analysis are agent-based computer simulations of complex evolving systems that are available online so that readers can experiment with the models. Bowles concludes with the time-honored challenge of "getting the rules right," providing an evaluation of markets, states, and communities as contrasting and yet sometimes synergistic structures of governance. Must reading for students and scholars not only in economics but across the behavioral sciences, this engagingly written and compelling exposition of the new microeconomics moves the field beyond the conventional models of prices and markets toward a more accurate and policy-relevant portrayal of human social behavior.

This book presents a novel and innovative approach to the study of social evolution using case studies from the Old and the New World, from prehistory to the present. This approach is based on examining social evolution through the evolution of social institutions. Evolution is defined as the process of structural change. Within this framework the society, or culture, is seen as a system composed of a vast number of social institutions that are constantly interacting and changing. As a result, the structure of society as a whole is also evolving and changing. The authors posit that the combination of evolving social institutions explains the non-linear character of social evolution and that every society develops along its own pathway and pace. Within this framework, society should be seen as the result of the compound effect of the interactions of social institutions specific to it. Further, the transformation of social institutions and relations between them is taking place not only within individual societies but also globally, as institutions may be trans-societal, and even institutions that operate in one society can arise as a reaction to trans-societal trends and demands. The book argues that it may be more productive to look at institutions even within a given society as being parts of trans-societal systems of institutions since, despite their interconnectedness, societies still have boundaries, which their members usually know and respect. Accordingly, the book is a must-read for researchers and scholars in various disciplines who are interested in a better understanding of the origins, history, successes and failures of social institutions.

​This short books offers the reader a remarkable new perspective on the way markets, laws and societies evolve together. It can be of use to anyone interested in development, market and public sector reform, public administration, politics & law. Based on a wide variety of case studies on three continents and a variety of conceptual sources, the authors develop a theory that clarifies the nature and functioning of dependencies that mark governance evolutions. This in turn delineates in an entirely new manner the spaces open for policy experiment. As such, it offers a new mapping of the middle ground between libertarianism and social engineering. Theoretically, the approach draws on a wide array of sources: institutional & development economics, systems theories, post-structuralism, actor- network theories, planning theory and legal studies.

An analytical framework for explaining the ways in which institutions and institutional change affect the performance of economies is developed in this analysis of economic structures.