Models, Interpretations, and Theories: Constructing Explanations of Institutional Emergence and Change

Abstract

Identifies & evaluates various rational-choice models of institutional change. Although all rational-choice models are based on the initial assumption that social actors pursue specific interests in a rational fashion, this premise leads to a diverse range of explanations for institutional change. Three models of institutional change are identified: (1) an evolutionary approach to the emergence of social norms, (2) a market-based theory of exchange & selection founded on competition, & (3) a bargaining theory that explains institutional creation through power inequality structures. The decentralized emergence of social institutions is the product of repeated interactions among a small number of social actors. These interactions are characterized by multiple choices, & institutional rules are established when equilibrium & norms are created through individual actors' repeated pursuit of the same preference or choice. Following a detailed critique of each model, it is concluded that the bargaining approach is most valid because of its ability to accommodate a broad range of social conditions in the initial premise of rational action. 1 Figure. T. Sevier