TRADITIONAL AND NEO-INSTITUTIONALISM
Political science, and comparative politics in particular, have as their primary goal the study of governing institutions;
consequently, the catchphrase “institutions matter” is frequently used in political studies. The discipline’s fundamental tenet,
institutionalism, supplied its initial foundation. Institutions seen essentially as sets of “rules” which are either informal or formal,
are foundation of all types of political behaviour. All forms of political actions are shaped by institutions. March and Olsen
propose that institutions are “collections of structures, rules and standard operating procedures that have a partly autonomous
role in political life,” in light of their overall contribution to the discourse on the function of institutions. Despite the numerous
factors that separate citizens, they offer the ties that keep them together. In the twentieth century, institutional theory constituted
the first comprehensive approach to political science as a whole. The description of constitutions, legal systems and
governmental institutions, as well as their comparison across national boundaries and historical periods, constituted the main
focus of political science outside of political philosophy. Political science, in the context of institutionalism, focused on the study
of constitutions and the structures governing representation and authority. However, it was recognised very early in the post–
World War II era that most of what was passed off as analysis was actually narrative or description, without theoretical
perspective and fundamentally unscientific. Multiple sources of criticism were directed at this conventional manifestation of
institutionalism. Behaviourists aimed to elucidate the reasons behind people’s actions in “real life,” as opposed to accepting the
roles played by political institutions automatically. A generation later, proponents of rational choice theory tried to use the
interaction of people’s self-interest to explain politics. The unambiguous takeaway was that formal frameworks for
“representation, decision-making, and policy implementation” were only a small part of politics. Therefore, in order to create
“new” institutional methods, it was necessary to integrate the more successful aspects of both classic institutionalism and
behaviouralists’ views regarding the crucial importance of theory and rigorous enquiry. Stated differently, new institutionalism
aims to explain political phenomena, whereas earlier institutional approaches tried to describe them.
WHAT IS AN INSTITUTION?
The term “institution” is used broadly in political science to refer to a wide range of things, including markets and law as well as
more nebulous concepts like social class and formal structures like parliament. In sociology, it is also used very haphazardly
and frequently seems to denote the same thing as an organisation. The concept of an institution is made extremely difficult by
the requirement to concentrate on formal, semi-formal and informal regulations. According to Rhodes et al., there isn’t a
“singular definition of an institution on which political science students can find wide agreement.” Dowding and King caution
against the use of “trivially true” formulations, which impede the identification of non-institutional entities. According to
Rothstein, if an “institution” is defined as “everything,” it has no meaning at all. Most definitions place a strong emphasis on
consistent behavioural patterns as well as laws and conventions. However, there are issues when we shift from examining
consistent behavioural patterns to formulating rules, determining which rules are most crucial, and evaluating the degree to
which rules are adhered to and upheld.
Institutions are durable, reflect common ideals and can be replicated in many ways by people with varying perspectives on the
law and behavioural patterns. This makes identifying institutions extremely difficult. Institutions can be unstable sets of ideas
that are accepted one day only to be questioned the next, or they can be comparatively robust and permanent organisations
that outlast individuals. We can approach them as real-world structures or as concepts that are exclusive to the imaginations of
those involved in policy.
THE EVOLUTION FROM “TRADITIONAL” INSTITUTIONAL APPROACH TO NEW INSTITUTIONALISM
Among the renowned academics involved in the old institutionalism were Carl Friedrich, James Bryce, Herman Finer and
Samuel Finer. Traditional institutionalism, according to Rod Rhodes, is the “historic heart” of the field and “part of the toolkit of
every political scientist”.
The primary distinguishing feature of the old institutionalism is its focus on the law and its essential function in governance. The
idea that structure matters was another important tenet of the old institutional ism, which tended to concentrate on the main
institutional characteristics of political systems, such as whether they were unitary or federal, presidential or parliamentary and
so on. Moreover, traditional institutionalism tended to be formal and constitutional.
The analysis of the old institutionalists also tended to have a strong historical basis. Their approach focused on the ways that
historical development, socio-economic background and cultural norms were interwoven with mod ern political institutions.
Lastly, the analyses of the more established institutionalists frequently included a significant normative component.
Political science, along with certain other social sciences, underwent a significant transformation in the 1950s and 1960s due to
the behavioural revolution. This “revolution” did represent a fundamental change in the way that political science was
approached from an academic standpoint. Behavioural approach functioned as the harbinger of a deeper and more profound
change in the underlying presumptions that underpinned the work of a noteworthy and progressively influential branch of the
discipline: the rational choice method.
Methodological individualism is one of the core concepts of behavioural and rational choice analysis. This individualism is
essential to behavioural analysis since the individual is frequently the centre of attention. Particularly, it was believed that
political figures and organisations would rationally maximise their own utility. Despite being substantially distinct from one
another in certain ways, both movements have had a profound impact on the discipline.
While it is easily argued that many intriguing and significant aspects of mass political behaviour were excluded by the previous
institutionalism, the behavioural revolution and rational choice approach seemed to take things too far. Even while they were
somewhat interested in the actions of the people who worked in those organisations, they tended to downplay the significance
of formal institutions in influencing the outcomes of government. Furthermore, as the official hierarchies of government came
under strain in many nations, the old institutionalism, the “tools of the lawyer and the historian,” proved to be increasingly
insufficient. Furthermore, political science tends to become more ethnocentric than necessary as a result of the formalism.
Later, there were serious questions regarding the validity of classical Marxist theory with the fall of the Berlin Wall and the
consequent revelation of state socialism’s shortcomings. In this context, first-phase rational choice theory’s predictions of
constant fluctuation reflecting the sum of the decisions made by individual players were called into question by the relative
stability of markets. Scholars from many intellectual traditions and with distinct goals in mind came together to form new
institutionalism as these forces came together.
Many of the old institutionalist tenets were reiterated by the new institutionalism that emerged in the 1980s. The “new” in March
and Olsen’s Redis covering Institutions originates from their argument that the rational choice school and the behavioural
approach both abolished the significance of institutions in understanding political outcomes. In addition to a renewed focus on
institutional change in developing nations, the 1980s saw a surge in study on social and political structures and an examination
of how institutions define interests and influence decisions beyond the formal norms.
NEW INSTITUTIONALISM
The “new institutionalism” in political science is referred to as “the next revolution” by Goodin and Klingemann. Beyond official
constitutions and organisational frameworks, the new institutionalists are interested in the unwritten rules of political life.
The focus of new institutionalism is on “Hard” institutions, or formal rules that define a political system. However, soft institutions
are also given the attention they deserve. The activities that are institutionalised through unwritten rules as opposed to those
found in the text of laws are referred to as “soft” institutions. Soft institutional rules are typically upheld by habit and the
application of informal consequences to those who “break the rules,” rather than by formal penalties.
Different societies may have different institutional practices, both soft and hard. It is crucial to understand, therefore, that
nations with seemingly equivalent hard institutions may have different soft institutions, and that this may or may not play a
substantial role in explaining the results of the relevant political process. The core idea of the new institutionalism is that
institutions matter, regardless of whether they are the rigid institutional framework of formal legislation or the flexible institutional
norms contained in customs, traditions and beliefs. The ways in which pro ponents of this viewpoint diverge are in how they
explain why institutions matter and how they influence behaviours. Two general replies to this topic are offered by new
institutionalists; these could be referred to as the “calculus approach” and the “cultural approach,” respectively. The calculus
method focuses on the parts of human behaviour that are calculated strategically and have an instrumental component. They
operate under the premise that people act strategically in order to optimise the achievement of a set of goals specified by a
particular preference function. Institutions largely influence behaviour by giving individuals varying degrees of assurance on the
actions of other actors both now and in the future. Institutions more precisely offer data on other people’s behaviour, agreement
enforcement procedures, defection penalties and similar things. The term “cultural approach” highlights how much behaviour is
influenced by one’s world view rather than being entirely intentional. This means that, while acknowledging the rationality and
purposefulness of human behaviour, it highlights the degree to which people rely on ingrained habits or recognisable
behavioural patterns to achieve their goals. Accord ing to this viewpoint, institutions offer moral or intellectual frameworks for
judgement and behaviour.
WHAT’S NEW ABOUT NEW INSTITUTIONALISM
Within the framework of increasingly explicit and complex theoretical frame works, new institutionalism frequently builds upon
the ideas of the greatest traditional institutionalists.
Shifting the Emphasis from the Organisation to Rules
What Fox and Miller refer to as the “brass name-plate” tradition of institutional analysis is abandoned in new institutionalism.
Political institutions are now viewed as sets of “rules” that direct and regulate the actions of individual players rather than being
synonymous with political organisations.
Shifting from a Formal to an Informal Understanding of Institutions
The new institutionalism emphasises both formal regulations and informal customs, in contrast to the conventional institutional
approach. Research on policy networks demonstrates how parallel institutional frameworks, consisting of informal processes
for policymaking, may coexist with formal structures. Understanding political institutions is expanded and deepened by
emphasising both formal and informal regulations.
Transforming the Idea of Institutions from Static to Dynamic
Four decades ago, Huntington (1968) defined political institutions as “stable, valued, and recurring patterns of behaviour.”
Stability is a characteristic of institutions. Institutionalists have been interested in investigating the mechanisms that achieve
institutional stability because they believe that same mechanisms could also provide insights on how institutions change. Every
institution is a part of a larger network of institutions that either enhance or reinforce its effects; none of them exist in isolation.
According to this view point, an institution becomes unstable when the institutional environment changes, especially when the
institutions it is associated with also become unstable. The second kind of explanation holds that institutions are constantly
created, repaired, redefined and defended against various disorganising influences. It looks for endogenous rather than
exogenous sources of stability and change. Hence, this strategy highlights the role that human activity plays in establishing and
maintaining stability as well as the institutions’ ongoing susceptibility to political actors’ neglect and onslaught.
Moving from Values that are Submerged to a Value-Critical Position
The “old” institutionalism was implicitly committed to a specific set of principles and style of governance, while also openly
concerned with “good government.” On the other hand, contemporary institutionalists aim to pinpoint the diverse manners in
which institutions represent and mould society ideals, which can also be subject to disagreement and change.
Changing from a Comprehensive to a Specialised Understanding of Institutions
The focus of contemporary institutionalists is on the individual institutions that make up political life, such as contracting rules,
cabinet decision-making, tax and benefit systems, electoral systems and arrangements for budgeting and policymaking. This is
in contrast to the “old” institutionalists who tended to characterise and compare entire systems of government.
Transitioning from Autonomy to Embeddedness
Recent institutionalists emphasise that political institutions are not autonomous entities that exist outside of space and time,
building on the ideas of the greatest of the old institutionalists. New institutionalists investigate how political institutions are
“embedded” in specific circumstances, but from diverse perspectives. The interaction between political and non-political
institutions at the local level gives birth, at least in part, to the diversity of political institutions by providing chances for not just
distinct but also diverse approaches to the same problems. For instance, even within the pur ported Westminster system, the
legislatures and executive branches of the UK, Kenya and Australia differ greatly, as do the ways in which federalism is
implemented in Germany, Brazil and India.
RATIONAL CHOICE INSTITUTIONALISM
The analysis of rational choice institutionalism looks at how various institutions impact the incentive structures, or patterns of
costs and benefits, that face individual political actors. This perspective holds that people constantly make the same decisions –
that is, they maximise benefits above costs – but the institutions in place will have an impact on how these decisions turn out.
They also frequently view politics as a sequence of problems requiring collaborative action. It is characterised as situations in
which individuals acting in a way that maximises the fulfilment of their own preferences are likely to result in a collectively
suboptimal outcome.
Rational choice institutionalism mainly addresses the existence of principal versus agent and collective action issues in the
political process, as well as the degree to which various institutions in various countries either exacerbate or aid in resolving
these issues. Many political outcomes, from this perspective, have the characteristics of community goods since they are made
available to all parties involved, regardless of their level of contribution, and as such, they are vulnerable to the free rider issue.
If the institution is subject to a process of competitive selection, it survives primarily because it offers greater benefits to the
relevant actors than alternative institutional forms. This formulation assumes that the actors create the institution, and the
process of institutional creation typically revolves around voluntary agreement by the relevant actors. According to strong
rational choice, the political institutions that are in place at any one time are the result of interactions between individuals who
are each pursuing their own interests. Rational choice theory’s “weak” variants provide ideas on a greater role to engage in the
institutional choice process. This point of view holds that ideas that are not reducible to self-interest can con tribute
independently to the development of institutions. Ideas are thought to have an impact on the institutional framework in which
decisions are made, and mistakes in institutional design may result in the development of inadequate incentive systems.
According to the rational choice perspective, institutions are made to correct observable flaws in the political or market systems
in order to achieve results that are desired by all parties involved. As a result, a good institution is one that carries out its
assigned duties effectively and with dedication to other strong standards like democracy. Rational choice theorists examine
institutions in terms of how much they contribute to increasing or decreasing the costs associated with taking collective action
and the possibility that free-riding behaviour will end.
The approach is severely limited in its ability to provide a framework for understanding the genesis of institutions by a number
of aspects. Firstly, the approach of rational choice institutionalism is often highly “functionalist.” In other words, it explains an
institution’s beginnings primarily in terms of the consequences of its existence. Secondly, the majority of this strategy is
“intentionalist.” Stated differently, it generally presumes that the process of creating institutions is highly intentional and
controlled by individuals who accurately recognise the consequences of the institutions they build and do so specifically to
ensure these effects. Thirdly, a lot of these studies lean heavily towards voluntarism. Institutional creation is often seen by them
as a quasi-contractual process characterised by voluntary agreement among individuals who are comparatively equal and
independent.
Theorists of rational choice propose that people establish institutions in order to further their goals and protect their interests.
DiMaggio and Powel argue that this reasoning is simply false because people are not free to choose between institutions, laws,
customs and norms. Speaking of utility-maximising and rational behaviour in a strictly economic sense is virtually nonsensical
because people are seen as “embedded” in so many social, economic and political interactions that are outside of their control
and even cognition. Since rational behaviour is only rational within the particular context of exchange, the distinction between
rational and non-rational behaviour is arbitrary. On the other hand, many behaviours may not be irrational once considered in
their larger context. The issue with rational choice theory is that it looks at human behaviour without taking social structure into
account.
SOCIOLOGICAL INSTITUTIONALISM
The definitions of institutions used by sociological institutionalists are typically far broader and encompass not only formal laws,
procedures or standards but also the moral frameworks, symbolic systems and cognitive scripts that serve as the “frames of
meaning” that direct behaviour in society. It first calls into question the line that many political scientists like to draw between
“cultural explanations,” which are based on the idea of culture as shared attitudes or values, and “institutional explanations”.
This method tends to reinterpret “culture” as “institutions.” This represents a “cognitive turn” in sociology itself, mov ing away
from theories that view culture as a system of routines, symbols, or scripts that serve as models for behaviour and instead
linking culture to affective attitudes or values alone. The relationship between institutions and individual action is also
understood differently by the new sociological institutionalists. According to this perspective, people who have been socialised
into specific institutional roles absorb the norms that go along with them; as a result, institutions are considered to have an
impact on behaviour. They highlight the ways in which institutions shape behaviour by offering the necessary cognitive
frameworks, classifications and models for action. Institutions shape behaviour by defining what is appropriate in a specific
situation as well as what an individual may envision themselves doing in that situation. Sociological institutionalists stress that
what a person may see as “rational action” is socially constructed in and of itself, and they have a far more expansive
conception of the objectives that an actor pursues than do other theorists.
Leading sociologists can readily be identified as those who have expressed concern about institutions. For instance, Max
Weber’s theory focuses on how formal institutions are shaped and infused with cultural values. Emile Durkheim, the renowned
French sociologist, also established a coherent understanding of the function of institutions in social and political life and called
sociology the “science of institutions.” The main contribution of this school of thought is to highlight how institutions are
“embedded” in society and the economy, and how much they depend on their surroundings.
This literature raises several questions, one of which is why comparatively identical institutional structures appear in starkly
diverse social and political contexts. Since Weber argued that there would be a tendency towards convergence around a
rational legal format for bureaucracy as societies developed, this question of “isomorphism” has some roots in Weber’s thinking.
Weber’s well-known “iron cage” theory has been expanded upon by DiMaggio and Powell to include a variety of sociological
mechanisms that lead to the emergence of common institutional and organisational patterns even in situations that appear
objectively distinct. But their interpretation of convergence tends to be more specialised; they argue for convergence in some
sectors but not necessarily in others, and they also claim that there are a number of distinct reasons why convergence
happens.
“Sedimentation” is one of the more intriguing ideas to come out of this corpus of sociological writing on institutions. This phrase
captures a truth about human nature: present behaviours in an organisation may have layers of values and understandings
from earlier times, and current practices are often based upon the experiences of the past. Thus, organisations or institutions
could resemble rocks taken from the bot tom where layer upon layer of deposits have gathered and cemented if they were to
be displayed graphically. The concept of sedimentation aptly captures the cumulative and historical essence of institutions.
The individualistic and rationalistic concepts that permeate most of mod ern political science are challenged by sociological
perspectives. Specifically, the rationalistic foundations of rational choice theory are directly opposed by the cognitive and
normative sociological descriptions of institutions. Hall and Taylor call the March and Olsen interpretation of institutional ism
“sociological institutionalism,” which is a fairly inaccurate reference. Undoubtedly, a significant portion of the critiques aimed at
the March and Olsen interpretation of institutionalism may also be said to apply to a significant portion of the sociological
institutionalism.
HISTORICAL INSTITUTIONALISM
In the field of political science, historical institutionalism essentially represented the first iteration of the new institutionalism.
Peter Hall’s (1986) examination of the evolution of economic policy in France and the UK was among the first research
statements. Hall made note of the significance of institutions in influencing policies over time, but he did not specifically mention
“historical institutionalism.” Hall’s main claim was that knowledge of the political and policy history of these two nations – or any
other – was essential to com prehending the decisions being made about their economic policies. Thelen and Steinmo identify
as “historical institutionalists.” Historical institutional ism emerged in reaction to the prevalent structural–functionalism and group
theories of politics in political science during the 1960s and 1970s. Historical institutionalists acknowledged the claim made by
group theory that the core of politics is rivalry between competing groups over limited resources, but they looked for more
compelling answers to the differences in national political results and the disparities that characterise these outcomes. The
long-term evolution of institutions and the ensuing temporal repercussions are of interest to historical institutionalists. Historical
institutionalism has been concerned in national-level building blocks like welfare provision and national politics on a large
geographical scale, that is, with an entire nation’s institutional machinery.
The relationship between institutions and individual behaviour is typically viewed broadly by historical institutionalists.
Institutions are thought to be comparatively enduring aspects of the historical environment and a major force behind the “paths”
that historical progress takes. Historical institutionalism has relied heavily on the idea of “path dependence” for the majority of
its evolution. The core premise is that there are significant costs associated with altering course after policymakers have
embarked on a certain path, no matter how arbitrary the initial decision may have been. While path dependency endures in
“normal” times, political upheavals, which are usually sparked by outside shocks, can produce critical junctures when actors
can drastically alter the current institutional frame work at a lower cost of change than continuity. According to this viewpoint, a
large number of historical institutionalists additionally split the progression of historical events into stretches of continuity
interspersed with “critical junctures,” or instances of significant institutional change that result in a “branching point” where
historical development shifts to a different direction. The main challenge here is to explain what leads to these crucial moments.
While historical institutionalists typically emphasise the significance of financial crises and armed conflict, many lack a
comprehensive answer to this query. Generally speaking, they aim to place institutions in a causal chain that allows for the
involvement of other variables, most notably socio-economic growth and the spread of ideas.
Integrating institutional analysis with the influence that ideas and other types of influences might have on political outcomes is
of particular relevance to them. The genesis of institutions and the relationship between personal choices and institutional
decisions are not well-understood by historical institutionalism. These academics hope that their method will help to explain
variations among political systems.
Whether the explanations can be refuted is the most challenging issue to pose about historical institutionalism. This is the
standard Popperian test for a sufficient scientific theory. The historical institutionalist can almost always produce an explanation
that shows the influence of prior choices and inertial tendencies, just as rational choice theory can almost always develop an
explanation that shows the players were acting rationally. It seems that there aren’t many ex-ante standards of proof accessible
here.
Given its implicit support of “logics of appropriateness” in determining behaviour, historical institutionalism is largely derivative
of normative institutionalism. Given its deep interest in history and the ways that institutions affect people across time, historical
institutionalism may as well be included as a part of the normative approach proposed by March and Olsen Furthermore, this
version of the strategy seems to be very good at “explaining” what happened and creating a story that actually manage to
incorporate a significant amount of historical reality. The issue is that this method seems to be at a loss for how to explain
instances in which institutions do shift in unanticipated ways. Although the model is more descriptive than explanatory or
predictive, this does limit the account of institutional theory’s overall scientific utility.
DILEMMAS OF NEW INSTITUTIONALISTS
In addition to formal constitutions and organisational frameworks, the new institutionalists are also interested in the unofficial
political customs. There is a renewed focus on the ways in which institutions represent power dynamics and values, as well as
on the challenges and possibilities facing institutional design. Importantly, new institutionalists are interested in how institutions
interact with people as well as how they affect people directly. Nonetheless, there are a lot of points of contention within the
field for “new institutionalists,” as well as between institutionalists and sceptics in other domains.
First of all, What Exactly Is an Institution?
Political institutions are considered by new institutionalists to be “the rules of the game”. The new institutionalists are able to
construct a more accurate and detailed image of what actually constrains political behaviour and decision-making by taking into
account both formal procedures and informal customs. However, if the term “institution” is interpreted broadly to encompass
everything that influences personal behaviour, there is a risk of “conceptual stretching”. John argues that new institutionalists
“include too many aspects of political life under one category . . . (which) disguises the variety of interactions and causal
mechanisms that occur.”
A useful starting point is provided by Peter Hall’s (1986) concept of “standard operating procedures,” which states that the
researcher’s goal should be to find the precise behavioural norms that are agreed upon and (generally) adhered to by agents,
whether openly or implicitly. This approach distinguishes informal institutional rules from personal habits.
Although specific actors or groups of actors may manipulate or evade standard operating procedures, actors as a whole are still
able to recognise and consider the nature of such regulations. New regulations may also be formally agreed upon, although it
may take some time for them to become accepted as standard operating procedure. A means of reconciling formal and informal
“rules” with the need to separate political institutions from more general practices and habits is provided by the concept of
standard operating procedures, which appeals to institutionalists.
How Do Institutions Evolve and Where Do they Originate?
Institutions are defined by their stability; in explaining the origins and evolution of institutions, new institutionalism is sometimes
said to be at its weakest. The understanding of the link between the individual and the institution shapes how change is
conceptualised. According to Peters, institutions can be “undone” when they cease to serve the interests of the actors involved
and only function to temporarily restrict the behaviour of individuals. According to these theorists, actors will only switch
institutions if the anticipated advantages surpass the costs of the shift itself.
Are the Various Approaches Mutually Compatible?
The debate between “calculus” and “cultural” approaches “represents an intractable divide between two contending and
incompatible approaches to institutional analyses,” according to Hay and Wincott’s (1998) argument. They advised historical
institutionalists in particular to create a fresh and unique social ontology that could subvert rather than replicate conventional
binary thinking, and they cautioned against the “cobbling together of institutional insights from differently-informed
institutionalisms”
The concepts and narratives that institutions uphold and employ to justify, deliberate or explain political conduct have the power
to influence behaviour. Understanding how concepts get codified throughout time and the circumstances in which basic ideas
are debated, challenged and replaced is necessary to explain the beginnings and subsequent development of political
institutions. Maybe the very quality that makes institutions unique is their tendency to be “over-determined.” Robust institutional
frameworks combine normative, regulatory and cognitive processes to influence behaviour. In fact, this amalgamation of
attributes is what defines a “institution” – a collection of cherished, significant and consistent behavioural patterns – and sets it
apart from a “rule book,” “organisation” or a collection of individual routines.
CONCLUSION
New institutionalism does not require any one particular theory, but it does demand a critical stance towards theory. The
strength of new institutionalism may be found precisely in its multi-theoretic character, which allows for the assessment of
competing propositions drawn from different political theories.
The contribution of new institutional approaches within political science is perhaps best understood in terms of “epistemic gain.”
Such a gain is constituted by the “movement from a problematic position to a more adequate one within a field of available
alternatives,” and can be contrasted with “epistemology’s mythical movement from falsity to truth.”
New institutionalists of all colours remain preoccupied with the central paradox, or “double life,” of institutions, which are both
“human products” and “social forces in their own right”. New institutionalism is better understood as what Gamble calls an
“organising perspective.” It is not a causal theory in the behavioural sense; instead, it “provides a map of the subject and sign
posts to its central questions”. The new institutionalism can be considered a “broad, if variegated, approach to politics,” held
together by the assertion that “institutions are the variable that explain most of political life, and they are also the factors that
require explanation”.
