The Diversity and Rapprochement of Theories of Institutional Change: Original Institutionalism and New Institutional Economics

Understanding the complexity of institutional change is a necessary step in gaining deeper knowledge of economic performance over time, and it is one of the main challenges in the research agenda of institutionalism. Institutional change can be studied using a variety of theoretical approaches. We study some of the main approaches to institutional change in original economic institutionalism and new institutional economics. First, after comparing the approaches of Emile Durkheim and Thorstein Veblen, we focus on the contributions of the instrumental value theory and other original institutional traditions in the study of institutional change. Second, new institutional economics improved on the weak points of rational choice institutionalism regarding institutional change and incorporated the institutions-as-rules approach (Douglass North) and the institutions-as-equilibria approach (Avner Greif, Masahiko Aoki). We analyze both approaches to institutional change. Furthermore, we present an updated non-integral overview of approaches to institutional change, show several interconnections between original and new institutionalisms, and conclude that the dialogue between the different theories of institutional change is relevant and beneficial.