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The Theory of Institutional Change Revisited: The Institutional Dichotomy, Its Dynamic, and Its Policy Implications in a More Formal Analysis


  • Wolfram Elsner


The Theory of Institutional Change as elaborated by P.D. Bush in the tradition of Veblen, Ayres and J.F. Foster provided an important device for analysis, with its clarification of the value bases and of forms and dynamics of value-behavior patterns. Bush pushed institutionalism to a certain limit. Coming from different "galaxies," formal approaches, such as system dynamics, network analysis, graph theory, or game theory have been further developed by institutional and evolutionary economists in order to close gaps and to further operationalize, formalize, and develop institutionalism. This paper strives to demonstrate that we can bridge gaps between the theory of institutional change and an evolutionary-institutional interpretation of game theory. This allows for a deeper analysis of institutions, the value base in game theory, the instrumental-ceremonial asymmetry, ceremonial dominance and encapsulation, and the institutionalist policy conception. So, it is part of a broader project for the extension of institutionalism's reach.

Suggested Citation

  • Wolfram Elsner, 2012. "The Theory of Institutional Change Revisited: The Institutional Dichotomy, Its Dynamic, and Its Policy Implications in a More Formal Analysis," Journal of Economic Issues, Taylor & Francis Journals, vol. 46(1), pages 1-44.
  • Handle: RePEc:mes:jeciss:v:46:y:2012:i:1:p:1-44 DOI: 10.2753/JEI0021-3624460101

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    References listed on IDEAS

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    Cited by:

    1. Elsner, Wolfram & Schwardt, Henning, 2012. "Trust and Arena Size. Expectations, Trust, and Institutions Co-Evolving, and Their Critical Population and Group Sizes," MPRA Paper 40393, University Library of Munich, Germany.
    2. repec:zbw:espost:170540 is not listed on IDEAS
    3. Heinrich, Torsten, 2015. "Evolution-Based Approaches in Economics and Evolutionary Loss of Information," MPRA Paper 68384, University Library of Munich, Germany.
    4. Gräbner, Claudius, 2015. "Formal Approaches to Socio Economic Policy Analysis - Past and Perspectives," MPRA Paper 61348, University Library of Munich, Germany.
    5. Gräbner, Claudius, 2016. "Agent-based computational models– a formal heuristic for institutionalist pattern modelling?," Journal of Institutional Economics, Cambridge University Press, vol. 12(01), pages 241-261, March.
    6. Gräbner, Claudius, 2016. "The complementary relationship between institutional and complexity economics: The example of deep mechanismic explanations," MPRA Paper 75636, University Library of Munich, Germany.
    7. Elsner, Wolfram & Schwardt, Henning, 2015. "The (dis-)embedded firm: Complex structure and dynamics in inter-firm relations. Adding institutionalization as a Veblenian dimension to the Coase-Williamson approach – An emerging triangular organiza," MPRA Paper 67193, University Library of Munich, Germany.
    8. Vladislav Valentinov & Lioudmila Chatalova, 2016. "Institutional Economics and Social Dilemmas: a Systems Theory Perspective," Systems Research and Behavioral Science, Wiley Blackwell, vol. 33(1), pages 138-149, January.
    9. Torsten Heinrich & Henning Schwardt, 2013. "Institutional Inertia and Institutional Change in an Expanding Normal-Form Game," Games, MDPI, Open Access Journal, vol. 4(3), pages 1-28, August.
    10. Valentinov, Vladislav & Hielscher, Stefan & Pies, Ingo, 2015. "Nonprofit organizations, institutional economics, and systems thinking," Economic Systems, Elsevier, vol. 39(3), pages 491-501.
    11. Claudius Graebner & Wolfram Elsner & Alexander Lascaux, 2017. "To trust or to control: Informal value transfer systems and computational analysis in institutional economics," ICAE Working Papers 74, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    12. Elsner, Wolfram, 2015. "Policy Implications of Economic Complexity and Complexity Economics," MPRA Paper 63252, University Library of Munich, Germany.
    13. Heinrich, Torsten, 2016. "The Narrow and the Broad Approach to Evolutionary Modeling in Economics," MPRA Paper 75797, University Library of Munich, Germany.
    14. Paolo Ramazzotti, 2016. "Themes in an institutionalist theory of economic policy," Working Papers 81-2016, Macerata University, Department of Finance and Economic Sciences, revised May 2016.
    15. Valentinov, Vladislav, 2015. "From equilibrium to autopoiesis: A Luhmannian reading of Veblenian evolutionary economics," Economic Systems, Elsevier, vol. 39(1), pages 143-155.

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