Historical Institutionalism

Historical institutionalism developed in response to the group theories of politics and

structural-functionalism prominent in political science during the 1960s and 1970s. It borrowed
from both approaches but sought to go beyond them. From group theory, historical
institutionalists accepted the contention that conflict among rival groups for scarce resources
lies at the heart of politics, but they sought better explanations for the distinctiveness of national
political outcomes and for the inequalities that mark these outcomes. They found such
explanations in the way the institutional organization of the polity and economy structures
conflict so as to privilege some interests while demobilizing others. Hence, they built on an older
tradition in political science that assigned importance to formal political institutions but they
developed a more expansive conception both of which institutions matter and of how they
matter.

The historical institutionalists were also influenced by the way in which structural functionalists
saw the polity as an overall system of interacting parts. They accepted this contention but
reacted against the tendency of many structural functionalists to view the social, psychological
or cultural traits of individuals as the parameters driving much of the system’s operation.
Instead, they saw the institutional organization of the polity or political economy as the principal
factor structuring collective behaviour and generating distinctive outcomes. They emphasized
the ‘structuralism’ implicit in the institutions of the polity rather than the ‘functionalism’ of earlier
approaches that viewed political outcomes as a response to the needs of the system.

Structural functionalism and group conflict theories had both pluralist and neo-Marxist variants
and debate about the latter played an especially influential role during the 1970s in the
development of historical institutionalism.
In particular, it led many historical institutionalists to look more closely at the state, seen no
longer as a neutral broker among competing interests but as a complex of institutions capable of
structuring the character and outcomes of group conflict.⁷ Shortly thereafter, analysts in this
school began to explore how other social and political institutions, of the sort associated with
labour and capital, could structure interactions so as to generate distinctive national
trajectories.⁸ Much of this work consists of cross-national comparisons of public policy, typically
emphasizing the impact of national political institutions structuring relations among legislators,
organized interests, the electorate and the judiciary.⁹ An important sub-literature in comparative
political economy extended such analyses to national labour movements, employer
organization, and financial systems.¹⁰

How do historical institutionalists define institutions? By and large, they define them as the
formal or informal procedures, routines, norms and conventions embedded in the organizational
structure of the polity or political economy. They can range from the rules of a constitutional
order or the standard operating procedures of a bureaucracy to the conventions governing trade
union behaviour or bank–firm relations. In general, historical institutionalists associate
institutions with organizations and the rules or conventions promulgated by formal
organization.¹¹
In the context of the other schools reviewed here, four features of this one are relatively
distinctive. First, historical institutionalists tend to conceptualize the relationship between
institutions and individual behaviour in relatively broad terms. Second, they emphasize the
asymmetries of power associated with the operation and development of institutions. Third, they
tend to have a view of institutional development that emphasizes path dependence and
unintended consequences. Fourth, they are especially concerned to integrate institutional
analysis with the contribution that other kinds of factors, such as ideas, can make to political
outcomes. Let us elaborate briefly on each of these points.¹²
Central to any institutional analysis is the question: how do institutions affect the behaviour of
individuals? After all, it is through the actions of individuals that institutions have an effect on
political outcomes. In broad terms, new institutionalists provide two kinds of responses to this
question, which might be termed the ‘calculus approach’ and the ‘cultural approach’
respectively. Each gives slightly different answers to three seminal questions: how do actors
behave, what do institutions do, and why do institutions persist over time?

In response to the first of these questions, those who adopt a calculus approach focus on those
aspects of human behaviour that are instrumental and based on strategic calculation. They
assume that individuals seek to maximize the attainment of a set of goals given by a specific
preference function and, in doing so, behave strategically, which is to say that they canvass all
possible options to select those conferring maximum benefit. In general, the actor’s goals or
preferences are given exogenously to the institutional analysis.

What do institutions do, according to the calculus approach? Institutions affect behaviour
primarily by providing actors with greater or lesser degrees of certainty about the present and
future behaviour of other actors. More specifically, institutions provide information relevant to the
behaviour of others, enforcement mechanisms for agreements, penalties for defection, and the
like. The key point is that they affect individual action by altering the expectations an actor has
about the actions that others are likely to take in response to or simultaneously with his own
action. Strategic interaction clearly plays a key role in such analyses.

Contrast this with a ‘cultural approach’ to such issues. The latter stresses the degree to which
behaviour is not fully strategic but bounded by an individual’s worldview. That is to say, without
denying that human behaviour is rational or purposive, it emphasizes the extent to which
individuals turn to established routines or familiar patterns of behaviour to attain their purposes.
It tends to see individuals as satisficers, rather than utility maximizers, and to emphasize the
degree to which the choice of a course of action depends on the interpretation of a situation
rather than on purely instrumental calculation.¹²

What do institutions do? From this perspective, institutions provide moral or cognitive templates
for interpretation and action. The individual is seen as an entity deeply embedded in a world of
institutions, composed of symbols, scripts and routines, which provide the filters for
interpretation, of which provide the filters for interpretation, of both the situation and oneself, out
of which a course of action is constructed. Not only do institutions provide strategically-useful
information, they also affect the very identities, self-images and preferences of the actors.¹³

These two approaches also supply different explanations for why the regularized patterns of
behaviour that we associate with institutions display continuity over time.¹⁴ The calculus
approach suggests that institutions persist because they embody something like a Nash
equilibrium. That is to say, individuals adhere to these patterns of behaviour because deviation
will make the individual worse off than will adherence.¹⁵ It follows that the more an institution
contributes to the resolution of collective action dilemmas or the more gains from exchange it
makes possible, the more robust it will be.¹⁶

A cultural approach, on the other hand, explains the persistence of institutions by noting that
many of the conventions associated with social institutions cannot readily be the explicit objects
of individual choice. Instead, as the elemental components from which collective action is
constructed, some institutions are so ‘conventional’ or taken-for-granted that they escape direct
scrutiny and, as collective constructions, cannot readily be transformed by the actions of any
one individual. Institutions are resistant to redesign ultimately because they structure the very
choices about reform that the individual is likely to make.¹⁷

Historical institutionalists are eclectic; they use both of these approaches to specify the
relationship between institutions and action. Immergut, for instance, explains cross-national
differences in health care reforms by reference to the willingness of physicians’ groups to
compromise with the advocates of reform, a willingness she links, in turn, to the way in which
the institutional structure of the political system affects these groups’ expectations about the
likelihood of successfully appealing an unpalatable decision beyond the legislature.¹⁸ Hers is a
classic calculus approach. Hattam employs a similar approach, when she argues that the
entrenched power of the judiciary led the American labour movement away from strategies that
were susceptible to judicial review. However, like many historical institutionalists, she goes
farther to explore the way in which differences in the institutional setting facing organized labour
in the United States and Britain fostered trade union movements with quite different worldviews.
This kind of analysis suggests that the strategies induced by a given institutional setting may
ossify over time into worldviews, which are propagated by formal organizations and ultimately
shape even the self-images and basic preferences of the actors involved in them.¹⁹

The second notable feature of historical institutionalism is the prominent role that power and
asymmetrical relations of power play in such analyses. All institutional studies have a direct
bearing on power relations. Indeed, they can usefully be read as an effort to elucidate the
‘second’ and ‘third’ dimensions of power identified some years ago in the community power
debate.²⁰ But historical institutionalists have been especially attentive to the way in which
institutions distribute power unevenly across social groups. Rather than posit scenarios of
freely-contracting individuals, for instance, they are more likely to assume a world in which
institutions give some groups or interests disproportionate access to the decision-making
process; and, rather than emphasize the degree to which an outcome makes everyone better
off, they tend to stress how some groups lose while others win. Steinmo, for instance, explains
cross-national differences in tax policy largely by reference to the way in which political
institutions structure the kinds of social interests most likely to be represented in the policy
process.²¹ In the realm of American economic policy, Weir shows how the structure of the
political system militates in favour of the formation of some social coalitions and against
others.²²

The historical institutionalists are also closely associated with a distinctive perspective on
historical development. They have been strong proponents of an image of social causation that
is ‘path dependent’ in the sense that it rejects the traditional postulate that the same operative
forces will generate the same results everywhere in favour of the view that the effect of such
forces will be mediated by the contextual features of a given situation often inherited from the
past. Of course, the most significant of these features are said to be institutional in nature.
Institutions are seen as relatively persistent features of the historical landscape and one of the
central factors pushing historical development along a set of ‘paths’.²³

Accordingly, historical institutionalists have devoted a good deal of attention to the problem of
explaining how institutions produce such paths, i.e. how they structure a nation’s response to
new challenges. Early analysts emphasized the impact of existing ‘state capacities’ and ‘policy
legacies’ on subsequent policy choices.²⁴ Others stress the way in which past lines of policy
condition subsequent policy by encouraging societal forces to organize along some lines rather
than others, to adopt particular identities, or to develop interests in policies that are costly to
shift.²⁵ In this context, historical institutionalists stress the unintended consequences and
inefficiencies generated by existing institutions in contrast to images of institutions as more
purposive and efficient.²⁶

In keeping with this perspective, many historical institutionalists also divide the flow of historical
events into periods of continuity punctuated by ‘critical junctures’, i.e., moments when
substantial institutional change takes place thereby creating a ‘branching point’ from which
historical development moves onto a new path.²⁷ The principal problem here, of course, is to
explain what precipitates such critical junctures, and, although historical institutionalists
generally stress the impact of economic crisis and military conflict, many do not have a
well-developed response to this question.²⁸

Finally, although they draw attention to the role of institutions in political life, historical
institutionalists rarely insist that institutions are the only causal force in politics. They typically
seek to locate institutions in a causal chain that accommodates a role for other factors, notably
socioeconomic development and the diffusion of ideas. In this respect, they posit a world that is
more complex than the world of tastes and institutions often postulated by rational choice
institutionalists. The historical institutionalists have been especially attentive to the relationship
between institutions and ideas or beliefs. Goldstein, for instance, shows how the institutional
structure devised for making trade policy in the United States tends to reinforce the impact of
certain ideas about trade while undermining others; and Weir argues that structural differences
between the British and American political systems affected the timing at which Keynesian ideas
became influential and the durability of their influence.²⁹
Rational Choice Institutionalism
It is one of the curiosities of contemporary political science that a second ‘new institutionalism’,
which we term rational choice institutionalism, developed at the same time as historical
institutionalism but in relative isolation from it. Initially, rational choice institutionalism arose from
the study of American congressional behaviour. In large measure, it was inspired by the
observation of a significant paradox. If conventional rational choice postulates are correct, it
should be difficult to secure stable majorities for legislation in the US Congress, where the
multiple preference-orderings of legislators and multidimensional character of issues should
lead to rapid ‘cycling’ from one bill to another as new majorities appear to overturn any bill that
is passed.³⁰ However, Congressional outcomes actually show considerable stability. In the late
1970s, rational choice analysts began to ask: how can this discrepancy be explained?

For an answer, they turned to institutions. Many began to argue that stable majorities could be
found for legislation because of the way in which the rules of procedure and committees of
Congress structure the choices and information available to its members.³¹ Some of these rules
provide agenda control that limits the range and sequence of the options facing Congressional
votes. Others apportion jurisdiction over key issues to committees structured so as to serve the
electoral interests of Congressmen or provide enforcement mechanisms that make logrolling
among legislators possible. In the most general terms, the institutions of the Congress are said
to lower the transaction costs of making deals so as to allow gains from exchange among
legislators that make the passage of stable legislation possible. In short, institutions solve many
of the collective action problems that legislatures habitually confront.³²

As this suggests, the rational choice institutionalists in political science drew fruitful analytical
tools from the ‘new economics of organization’ which emphasizes the importance of property
rights, rent-seeking, and transactions costs to the operation and development of institutions.³³
Especially influential was Williamson’s argument that the development of a particular
organizational form can be explained as the result of an effort to reduce the transaction costs of
undertaking the same activity without such an institution.³⁴ North applied similar arguments to
the history of political institutions.³⁵ And theories of agency, which focus on the institutional
mechanisms whereby ‘principals’ can monitor and enforce compliance on their ‘agents’, proved
useful for explaining how Congress structures relations with its committees or the regulatory
agencies it superintends.³⁶

The efflorescence of work on the American legislature that rational choice institutionalism has
inspired is well-represented in recent collections.³⁷ By and large it focuses on explaining how the
rules of Congress affect the behaviour of legislators and why they arise, with an emphasis on
the Congressional committee system and the relationship between Congress and regulatory
agencies. More recently, Cox and McCubbins have attempted to shift the emphasis away from
Congressional committees toward the way in which political parties structure deliberations.
Ferejohn has begun to explore the relationship between Congress and the courts; and a lively
debate has emerged about the capacity of Congress to control regulatory agencies.38
In recent years, rational choice institutionalists have also turned their attention to a variety of
other phenomena, including cross-national coalition behaviour, the development of political
institutions, and the intensity of ethnic conflict.39 Przeworski, Geddes, Marks and others
analyse democratic transitions in game-theoretic terms.40 Tsebelis and others explore the
implications of institutional reform in the European Union,41 and scholars of international
relations have used the concepts of rational choice institutionalism to explain the rise or fall of
international regimes, the kind of responsibilities that states delegate to international
organizations, and the shape of such organizations.42

Like all of these schools, rational choice institutionalism contains internal debates and some
variation in outlook. However, we want to emphasize four notable features of this approach.

First, rational choice institutionalists employ a characteristic set of behavioural assumptions. In

general, they hold that the relevant actors have a fixed set of preferences or tastes (usually
conforming to more precise conditions such as the transitivity principle), behave entirely
instrumentally so as to maximize the attainment of these preferences, and do so in a highly
strategic manner that presumes extensive calculation.⁴³

Second, if all schools of thought tend to promulgate a characteristic image of politics, whether
as a ‘struggle for power’, a ‘process of social learning’ or the like, rational choice institutionalists
also purvey a distinctive image of politics. They tend to see politics as a series of collective
action dilemmas. The latter can be defined as instances when individuals acting to maximize the
attainment of their own preferences are likely to produce an outcome that is collectively
suboptimal (in the sense that another outcome could be found that would make at least one of
the actors better off without making any of the others worse off). Typically, what prevents the
actors from taking a collectively-superior course of action is the absence of institutional
arrangements that would guarantee complementary behaviour by others. Classic examples
include the ‘prisoner’s dilemma’ and the ‘tragedy of the commons’ and political situations
present a variety of such problems.⁴⁴

Third, one of the great contributions of rational choice institutionalism has been to emphasize
the role of strategic interaction in the determination of political outcomes. That is to say, they
postulate, first, that an actor’s behaviour is likely to be driven, not by impersonal historical
forces, but by a strategic calculus and, second, that this calculus will be deeply affected by the
actor’s expectations about how others are likely to behave as well. Institutions structure such
interactions, by affecting the range and sequence of alternatives on the choice-agenda or by
providing information and enforcement mechanisms that reduce uncertainty about the
corresponding behaviour of others and allow ‘gains from exchange’, thereby leading actors
toward particular calculations and potentially better social outcomes. We can see that rational
choice theorists take a classic ‘calculus approach’ to the problem of explaining how institutions
affect individual action.

Finally, rational choice institutionalists have also developed a distinctive approach to the
problem of explaining how institutions originate. Typically, they begin by using deduction to
arrive at a stylized specification of the functions that an institution performs. They then explain
the existence of the institution by reference to the value those functions have for the actors
affected by the institution. This formulation assumes that the actors create the institution in order
to realize this value, which is most often conceptualized, as noted above, in terms of gains from
cooperation. Thus, the process of institutional creation usually revolves around voluntary
agreement by the relevant actors; and, if the institution is subject to a process of competitive
selection, it survives primarily because it provides more benefits to the relevant actors than
alternate institutional forms.⁴
Thus, a firm’s organizational structure is explained by reference to the way in which it minimizes
transaction, production or influence costs.⁴⁶ The rules of the American Congress are explained
by reference to the gains from exchange they provide to members of Congress. The
constitutional provisions adopted by the English in the 1680s are explained by reference to the
benefits they provide to property holders. Such examples could be multiplied. There is plenty of
room for contention within this general framework but it usually focuses on whether the
functions performed by the institution at hand are specified correctly. Thus, Krehbiel engages
the field in a lively debate about whether legislative committees in the US Congress exist
primarily to provide members with gains from exchange or information about the outcomes of
proposed legislation.⁴⁷

Sociological Institutionalism
Independent from but contemporaneous with these developments in political science, a new
institutionalism has been developing in sociology. Like the other schools of thought, it is rife with
internal debate. However, its contributors have developed a set of theories that are of growing
interest to political scientists.
What we are calling sociological institutionalism arose primarily within the subfield of
organization theory. The movement dates roughly to the end of the 1970s, when some
sociologists began to challenge the distinction traditionally drawn between those parts of the
social world said to reflect a formal means-ends ‘rationality’ of the sort associated with modern
forms of organization and bureaucracy and those parts of the social world said to display a
diverse set of practices associated with ‘culture’. Since Weber, many sociologists had seen the
bureaucratic structures that dominate the modern landscape, in government departments, firms,
schools, interest organizations and the like, as the product of an intensive effort to devise
ever-more efficient structures for performing the tasks associated with modern society. The
striking similarities in form taken by these otherwise rather-diverse organizations were said to be
the result of the inherent rationality or efficiency of such forms for performing these tasks.⁴⁸
Culture was seen as something altogether different.
Against this, the new institutionalists in sociology began to argue that many of the institutional
forms and procedures used by modern organizations were not adopted simply because they
were most efficient for the tasks at hand, in line with some transcendent ‘rationality’. Instead,
they argued that many of these forms and procedures should be seen as culturally-specific
practices, akin to the myths and ceremonies devised by many societies, and assimilated into
organizations not necessarily to enhance their formal means–ends efficiency, but as a result of
the kind of processes associated with the transmission of cultural practices more generally.
Thus, they argued, even the most seemingly bureaucratic of practices have to be explained in
cultural terms.⁴⁹
Given this perspective, the problematic that sociological institutionalists typically adopt seeks
explanations for why organizations take on specific sets of institutional forms, procedures or
symbols; and it emphasizes how such practices are diffused through organizational fields or
across nations. They are interested, for instance, in explaining the striking similarities in
organizational form and practice that Education Ministries display throughout the world,
regardless of differences in local conditions or that firms display across industrial sectors
whatever the product they manufacture. Dobbin employs the approach to show how
culturally-constructed conceptions of the state and market conditioned nineteenth century
railroad policy in France and the United States.⁵⁰ Meyer and Scott use it to explain the
proliferation of training programmes in American firms.⁵¹ Others apply it to explain institutional
isomorphism in East Asia and the relative facility with which East Asian production techniques
were diffused throughout the world.⁵² Fligstein takes this approach to explaining the
diversification of American industry, and Soysal uses it to explain contemporary immigration
policy in Europe and America.⁵³
Three features of sociological institutionalism render it relatively distinctive in the context of the
other ‘new institutionalisms’.
First, the sociological institutionalists tend to define institutions much more broadly than political
scientists do to include, not just formal rules, procedures or norms, but the symbol systems,
cognitive scripts, and moral templates that provide the ‘frames of meaning’ guiding human
action.⁵⁴ Such a definition breaks down the conceptual divide between ‘institutions’ and ‘culture’.
The two shade into each other. This has two important implications. First, it challenges the
distinction that many political scientists like to draw between ‘institutional explanations’ based on
organizational structures and ‘cultural explanations’ based on an understanding of culture as
shared attitudes or values.⁵⁵ Second, associations that redefine what constitutes ‘best practices’.
In this respect, this approach tends to redefine ‘culture’ itself as ‘institutions’.⁵⁶ In this respect, it
reflects a ‘cognitive turn’ within sociology itself away from formulations that associate culture
exclusively with affective attitudes or values toward ones that see culture as a network of
routines, symbols or scripts providing templates for behaviour.⁵⁷
Second, the new institutionalists in sociology also have a distinctive understanding of the
relationship between institutions and individual action, which follows the ‘cultural approach’
described above (pp. 939–40) but displays some characteristic nuances. An older line of
sociological analysis resolved the problem of specifying the relationship between institutions
and action by associating institutions with ‘roles’ to which prescriptive ‘norms of behaviour’ were
attached. In this view, individuals who have been socialized into particular institutional roles
internalize the norms associated with these roles, and in this way institutions are said to affect
behaviour. We might think of this as the ‘normative dimension’ of institutional impact. Although
some continue to employ such conceptions, many sociological institutionalists put a new
emphasis on what we might think of as the ‘cognitive dimension’ of institutional impact. That is
to say, they emphasize the way in which institutions influence behaviour by providing the
cognitive scripts, categories and models that are indispensable for action, not least because
without them the world and the behaviour of others cannot be interpreted.⁵⁸ Institutions influence
behaviour not simply by specifying what one should do but also by specifying what one can
imagine oneself doing in a given context. Here, one can see the influence of social
constructivism on the new institutionalism in sociology. In many cases, institutions are said to
provide the very terms through which meaning is assigned in social life. It follows that
institutions do not simply affect the strategic calculations of individuals, as rational choice
institutionalists contend, but also their most basic preferences and very identity. The self-images
and identities of social actors are said to be constituted from the institutional forms, images and
signs provided by social life.⁵⁹
Accordingly, many sociological institutionalists emphasize the highly-interactive and
mutually-constitutive character of the relationship between institutions and individual action.
When they act as a social convention specifies, individuals simultaneously constitute
themselves as social actors, in the sense of engaging in socially meaningful acts, and reinforce
the convention to which they are adhering. Central to this reasoning is the notion that action is
tightly bound up with interpretation. Thus, the sociological institutionalists insist that, when faced
with a situation, the individual must find a way of recognizing it as well as of responding to it,
and the scripts or templates implicit in the institutional world provide the means for
accomplishing both of these tasks.
often more or less simultaneously. The relationship between the individual and the institution,
then, is built on a kind of ‘practical reasoning’ whereby the individual works with and reworks the
available institutional templates to devise a course of action.⁶⁰
None of this suggests that individuals are not purposive, goal-oriented or rational. However,
sociological institutionalists emphasize that what an individual will see as ‘rational action’ is itself
socially constituted, and they conceptualize the goals toward which an actor is striving in much
broader terms than others do. If rational choice theorists often posit a world of individuals or
organizations seeking to maximize their material well-being, sociologists frequently posit a world
of individuals or organizations seeking to define and express their identity in socially appropriate
ways.
Finally, the new institutionalists in sociology also take a distinctive approach to the problem of
explaining how institutional practices originate and change. As we have seen, many rational
choice institutionalists explain the development of an institution by reference to the efficiency
with which it serves the material ends of those who accept it. By contrast, sociological
institutionalists argue that organizations often adopt a new institutional practice, not because it
advances the means–ends efficiency of the organization but because it enhances the social
legitimacy of the organization or its participants. In other words, organizations embrace specific
institutional forms or practices because the latter are widely valued within a broader cultural
environment. In some cases, these practices may actually be dysfunctional with regard to
achieving the organization’s formal goals. Campbell captures this perspective nicely by
describing it as a ‘logic of social appropriateness’ in contrast to a ‘logic of instrumentality’.⁶¹
Thus, in contrast to those who explain the diversification of American firms in the 1950s and
1960s as a functional response to economic or technological exigency, Fligstein argues that
managers embraced it because of the value that became associated with it in the many
professional forums in which they participated and the validation it offered for their broader roles
and worldviews.⁶² Similarly, Soysal argues that the policies toward immigrants adopted by many
states were pursued, not because they were most functional for the state, but because the
evolving conceptions of human rights promulgated by international regimes made such policies
seem appropriate and others illegitimate in the eyes of national authorities.⁶³
Central to this approach, of course, is the question of what confers ‘legitimacy’ or ‘social
appropriateness’ on some institutional arrangements but not others. Ultimately, this is an issue
about the sources of cultural authority. Some of the sociological institutionalists emphasize the
way in which a modern state of expanding regulatory concern spreads many practices on
societal organizations by public fiat. Others stress the way in which the growing
professionalization of many spheres of endeavour creates professional communities with the
cultural authority to press certain standards on their members.⁶⁴ In other cases, common
institutional practices are said to emerge from a more interactive process of discussion among
the actors in a given network – about shared problems, how to interpret them, and how to solve
them – taking place in a variety of forums that range from business schools to international
conclaves. Out of such interchanges, the actors are said to develop shared cognitive maps,
often embodying a sense of appropriate institutional practices, which are then widely deployed.
In these instances, the interactive and creative dimensions of the process whereby institutions
are socially constructed is most apparent.⁶⁵ Some argue that we can even see such processes
at work on a transnational scale, where conventional concepts of modernity confer a certain
measure of authority on the practices of the most ‘developed’ states and exchanges under the
aegis of international regimes encourage shared understandings that carry common practices
across national boundaries.⁶⁶