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Adam Smith anchored his economics in the supposed human "propensity to truck, barter and exchange". Modern feminists have criticized traditional marriage and other institutions as element of an oppressive and obsolete patriarchy. The Marxist view—which sees human nature as historically 'evolving' towards voluntary social cooperation, shared by some anarchists —is that supra-individual institutions such as the market and the state are incompatible with the individual liberty of a truly free society.

Economics, in recent years, has used game theory to study institutions from two perspectives. Firstly, how do institutions survive and evolve? In this perspective, institutions arise from Nash equilibria of games. For example, whenever people pass each other in a corridor or thoroughfare, there is a need for customs, which avoid collisions. Such a custom might call for each party to keep to their own right or left—such a choice is arbitrary, it is only necessary that the choice be uniform and consistent.

Such customs may be supposed to be the origin of rules, such as the rule, adopted in many countries, which requires driving automobiles on the right side of the road.

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Secondly, how do institutions affect behaviour? In this perspective, the focus is on behaviour arising from a given set of institutional rules. In these models, institutions determine the rules i. Douglass North argues, the very emergence of an institution reflects behavioral adaptations through his application of increasing returns. For example, the Cournot duopoly model is based on an institution involving an auctioneer who sells all goods at the market-clearing price. While it is always possible to analyze behaviour with the institutions-as-equilibria approach instead, it is much more complicated.

In political science , the effect of institutions on behavior has also been considered from a meme perspective, like game theory borrowed from biology. A " memetic institutionalism " has been proposed, suggesting that institutions provide selection environments for political action, whereby differentiated retention arises and thereby a Darwinian evolution of institutions over time. Public choice theory , another branch of economics with a close relationship to political science, considers how government policy choices are made, and seeks to determine what the policy outputs are likely to be, given a particular political decision-making process and context.

Credibility thesis purports that institutions emerge from intentional institution-building but never in the originally intended form. In history, a distinction between eras or periods, implies a major and fundamental change in the system of institutions governing a society. Political and military events are judged to be of historical significance to the extent that they are associated with changes in institutions. In European history, particular significance is attached to the long transition from the feudal institutions of the Middle Ages to the modern institutions, which govern contemporary life.

In order to understand why some institutions persist and other institutions only appear in certain contexts, it is important to understand what drives institutional change. Acemoglu, Johnson and Robinson assert that institutional change is endogenous. They posit a framework for institutional change that is rooted in the distribution of resources across society and preexisting political institutions.

These two factors determine de jure and de facto political power, respectively, which in turn defines this period's economic institutions and next period's political institutions. Finally, the current economic institutions determine next period's distribution of resources and the cycle repeats. These entrepreneurs weigh the expected costs of altering the institutional framework against the benefits they can derive from the change. Lipscy argues that patterns of institutional change vary according to underlying characteristics of issue areas, such as network effects.

In the case of a culture of cooperation and inclusive political institutions, Guerriero builds on the institutional revolution that shook Europe during the Middle Ages to develop a model highlighting two ideas. First, a profitable enough joint investment pushes the elite to introduce more inclusive political institutions to convince the citizens that a sufficient part of its return will be shared via public spending and so, they should cooperate. Second, the citizens accumulate culture to share consumption risk and to commit to cooperating in investment at its intermediate values threatening democracy.

Consistent with these predictions, in a panel of 90 European regions spanning the period —, reforms towards tighter constraints on the elite's power were driven by factors curbing the observability of farming investments and raising the value of long-distance trade, i.

Moreover, the activity of the Cistercians and Franciscans, who dictated charity-based norms of cooperation in exchange for guidance on how to share consumption risk, intensified with the climate volatility and with the severity of shocks to the investment value, i. North argues that because of the preexisting influence that existing organizations have over the existing framework, change that is brought about is often in the interests of these organizations.

This produces a phenomenon called path dependence, which states that institutional patterns are persistent and endure over time.

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Once a choice is made during a critical juncture, it becomes progressively difficult to return to the initial point where the choice was made. James Mahoney studies path dependence in the context of national regime change in Central America and finds that liberal policy choices of Central American leaders in the 19th century was the critical juncture that led to the divergent levels of development that we see in these countries today.

Though institutions are persistent, North states that paths can change course when external forces weaken the power of an existing organization. This allows other entrepreneurs to affect change in the institutional framework. This change can also occur as a result of gridlock between political actors produced by a lack of mediating institutions and an inability to reach a bargain. North, Wallis, and Weingast divide societies into different social orders: open access orders, which about a dozen developed countries fall into today, and limited access orders, which accounts for the rest of the countries.

Open access orders and limited access orders differ fundamentally in the way power and influence is distributed. As a result, open access institutions placed in limited access orders face limited success and are often coopted by the powerful elite for self-enrichment. Transition to more democratic institutions is not created simply by transplanting these institutions into new contexts, but happens when it is in the interest of the dominant coalition to widen access.

Ian Lustick suggests that the social sciences, particularly those with the institution as a central concept, can benefit by applying the concept of natural selection to the study of how institutions change over time. This can eventually lead to institutions becoming stuck on local maxima , such that for the institution to improve any further, it would first need to decrease its overall fitness score e. The tendency to get stuck on local maxima can explain why certain types of institutions may continue to have policies that are harmful to its members or to the institution itself, even when members and leadership are all aware of the faults of these policies.

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As an example, Lustick cites Amyx's analysis of the gradual rise of the Japanese economy and its seemingly sudden reversal in the so-called "Lost Decade". According to Amyx, Japanese experts were not unaware of the possible causes of Japan's economic decline.

Rather, to return Japan's economy back to the path to economic prosperity, policymakers would have had to adopt policies that would first cause short-term harm to the Japanese people and government. Under this analysis, says Ian Lustick, Japan was stuck on a "local maxima", which it arrived at through gradual increases in its fitness level, set by the economic landscape of the s and 80s. Without an accompanying change in institutional flexibility, Japan was unable to adapt to changing conditions, and even though experts may have known which changes the country needed, they would have been virtually powerless to enact those changes without instituting unpopular policies that would have been harmful in the short-term.

The lessons from Lustick's analysis applied to Sweden's economic situation can similarly apply to the political gridlock that often characterizes politics in the United States.

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For example, Lustick observes that any politician who hopes to run for elected office stands very little to no chance if they enact policies that show no short-term results. Unfortunately, there is a mismatch between policies that bring about short-term benefits with minimal sacrifice, and those that bring about long-lasting change by encouraging institution-level adaptations. There are some criticisms to Lustick's application of natural selection theory to institutional change.

Lustick himself notes that identifying the inability of institutions to adapt as a symptom of being stuck on a local maxima within a fitness landscape does nothing to solve the problem. At the very least, however, it might add credibility to the idea that truly beneficial change might require short-term harm to institutions and their members. David Sloan Wilson notes that Lustick needs to more carefully distinguish between two concepts: multilevel selection theory and evolution on multi-peaked landscapes. This may be relatively simple in evaluating the economic prosperity of a society, for example, but it is difficult to see how objectively a measure can be applied to the amount of freedom of a society, or the quality of life of the individuals within.

The term "institutionalization" is widely used in social theory to refer to the process of embedding something for example a concept, a social role, a particular value or mode of behavior within an organization, social system, or society as a whole. The term may also be used to refer to committing a particular individual to an institution, such as a mental institution.

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To this extent, "institutionalization" may carry negative connotations regarding the treatment of, and damage caused to, vulnerable human beings by the oppressive or corrupt application of inflexible systems of social, medical, or legal controls by publicly owned, private or not-for-profit organizations. The term "institutionalization" may also be used in a political sense to apply to the creation or organization of governmental institutions or particular bodies responsible for overseeing or implementing policy, for example in welfare or development.

From Wikipedia, the free encyclopedia. This article is about institutions as social mechanisms. For formal organization, see Formal organization. For a computer science concept, see Institution computer science. Not to be confused with institute. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources.

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Unsourced material may be challenged and removed. Main article: Institutionalisation. Academic institution Actor analysis Base and superstructure Cultural reproduction Dispositif Historical institutionalism Ideological state apparatus Institute Institutional abuse Institutional economics Institutional logic Institutional memory Institutional racism Institutionalist political economy Linkage institution List of oldest institutions in continuous operation State , Nation , country , Sovereign state.

Stanford Encyclopedia of Philosophy. Metaphysics Research Lab, Stanford University.

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Mueller, ed. This study seeks to introduce a framework that can assist anchor institutions in understanding their impact on the community and, in particular, their impact on the welfare of low-income children and families in those communities. Download the report and learn more about our work to help anchors measure their impact on community wealth. This is especially true for cities that are struggling with widespread poverty and disinvestment. Urban anchors— typically hospitals and universities—have sometimes isolated themselves from the poor and struggling neighborhoods that surround them.

But this is changing. In Cleveland, the Greater University Circle Initiative is a unique, multi-stakeholder initiative with a ten-year track record. Democracy Collaborative Executive Director Ted Howard talks to ICIC about how anchor institutions can play a key role in inclusive development in traditionally underserved communities. Authored by Rita Axelroth Hodges and Steve Dubb as part of Michigan State University Press' series on Transformations in Higher Education, the book features ten in-depth cases and examines how universities, by pursuing an anchor institution mission to improve surrounding communities in cooperation with community partners, can positively impact the welfare of low-income residents.

Building community wealth.

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