Institutions and the Economy

Abstract Sociology, political science, and economics have undergone parallel revolutions since the late 1970s, following on the heels of the behavioral revolution of the 1950s and 1960s. Four distinct institutional paradigms have emerged: sociological institutionalism, rational choice institutionalism in political science, historical institutionalism in the same discipline, and new institutional economics. Sociologists argue that economic institutions—which encompass paradigms, conventions, rules, and regulations—shape modern behavior. National institutional differences produce stable patterns of economic behavior within countries, but institutions themselves change over time. Four recent trends in sociology are reviewed: studies of the global spread of regulatory institutions; studies of the use of economic theories to support policy design and economic conventions; studies of market actors as social movements promoting economic change; and studies of the moral and cultural underpinnings of the economy.