IDEAS home Printed from https://ideas.repec.org/a/spr/joevec/v33y2023i2d10.1007_s00191-023-00813-x.html
   My bibliography  Save this article

Drivers of institutional evolution: phylogenetic inertia and ecological pressure

Author

Listed:
  • Hoyoon Lee

    (Seoul National University)

  • Dawoon Jeong

    (Seoul National University)

  • Jeong-Dong Lee

    (Seoul National University)

Abstract

Understanding dynamics on institution for sustainable development of society is a topical issue. Researchers in the past have qualitatively analyzed factors, such as inertia, that influence institutional evolution. This study proposes a quantitative approach. Using algorithms, we establish a phylogenetic tree based on data from the power sector institution of OECD countries during 1985–2019. Our results are verified by historical events in power sector institutions, such as the global change to a privatized competitive market and institutional revolution of the United Kingdom in 1990. We propose two quantitative measurements based on this tree: institutional inertia (which resists change) and ecological pressure (which causes change). Both institutional inertia and ecological pressure alter the dynamics of institutional evolution to be either gradual or rapid, respectively. Specifically, inertia causes a pattern shift from phyletic gradualism to punctuated equilibrium due to its diverse effect on institutional evolution. In the phyletic gradualism pattern, it suppresses rapid institutional change; however, it becomes stronger endogenously as institutions evolve and shifts the pattern to punctuated equilibrium. Using the phylogenetic tree to simultaneously analyze gradual and rapid institutional change is novel.

Suggested Citation

  • Hoyoon Lee & Dawoon Jeong & Jeong-Dong Lee, 2023. "Drivers of institutional evolution: phylogenetic inertia and ecological pressure," Journal of Evolutionary Economics, Springer, vol. 33(2), pages 279-308, April.
    • Handle: RePEc:spr:joevec:v:33:y:2023:i:2:d:10.1007_s00191-023-00813-x
    DOI: 10.1007/s00191-023-00813-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00191-023-00813-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00191-023-00813-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bacon,Robert W., 2018. "Taking stock of the impact of power utility reform in developing countries : a literature review," Policy Research Working Paper Series 8460, The World Bank.
    2. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    3. Utterback, James M & Abernathy, William J, 1975. "A dynamic model of process and product innovation," Omega, Elsevier, vol. 3(6), pages 639-656, December.
    4. David Chavalarias & Jean-Philippe Cointet, 2013. "Phylomemetic Patterns in Science Evolution—The Rise and Fall of Scientific Fields," PLOS ONE, Public Library of Science, vol. 8(2), pages 1-11, February.
    5. Greif, Avner, 1994. "Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 912-950, October.
    6. Paul L. Joskow, 2008. "Lessons Learned from Electricity Market Liberalization," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 9-42.
    7. Mary Tripsas, 2008. "Customer preference discontinuities: a trigger for radical technological change," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 79-97.
    8. Nepal, Rabindra & Jamasb, Tooraj, 2013. "Security of European electricity systems: Conceptualizing the assessment criteria and core indicators," International Journal of Critical Infrastructure Protection, Elsevier, vol. 6(3), pages 182-196.
    9. Daniel A. Levinthal, 1997. "Adaptation on Rugged Landscapes," Management Science, INFORMS, vol. 43(7), pages 934-950, July.
    10. Ehsan S. Soofi, 1990. "Generalized Entropy-Based Weights for Multiattribute Value Models," Operations Research, INFORMS, vol. 38(2), pages 362-363, April.
    11. Michael T. Hannan & L·szlÛ PÛlos & Glenn R. Carroll, 2004. "The evolution of inertia," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 13(1), pages 213-242, February.
    12. Durant, Robert F. & Diehl, Paul F., 1989. "Agendas, Alternatives, and Public Policy: Lessons from the U.S. Foreign Policy Arena," Journal of Public Policy, Cambridge University Press, vol. 9(2), pages 179-205, April.
    13. Kingston, Christopher & Caballero, Gonzalo, 2009. "Comparing theories of institutional change," Journal of Institutional Economics, Cambridge University Press, vol. 5(2), pages 151-180, August.
    14. Pablo Paniagua Prieto, 2022. "The institutional evolution of central banks," Journal of Evolutionary Economics, Springer, vol. 32(3), pages 1049-1070, July.
    15. Yi Zhang & Yue Qian & Ying Huang & Ying Guo & Guangquan Zhang & Jie Lu, 2017. "An entropy-based indicator system for measuring the potential of patents in technological innovation: rejecting moderation," Scientometrics, Springer;Akadémiai Kiadó, vol. 111(3), pages 1925-1946, June.
    16. Jeroen Bergh & Sigrid Stagl, 2003. "Coevolution of economic behaviour and institutions: towards a theory of institutional change," Journal of Evolutionary Economics, Springer, vol. 13(3), pages 289-317, August.
    17. Coriat, Benjamin & Weinstein, Olivier, 2002. "Organizations, firms and institutions in the generation of innovation," Research Policy, Elsevier, vol. 31(2), pages 273-290, February.
    18. Giuseppe Carignani & Gino Cattani & Giusi Zaina, 2019. "Evolutionary chimeras: a Woesian perspective of radical innovation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(3), pages 511-528.
    19. Yoon, Jungsub & Lee, Jeong-Dong & Hwang, Seogwon, 2022. "Episodic change: A new approach to identifying industrial transition," Technovation, Elsevier, vol. 115(C).
    20. Geoffrey Hodgson, 2002. "The Evolution of Institutions: An Agenda for Future Theoretical Research," Constitutional Political Economy, Springer, vol. 13(2), pages 111-127, June.
    21. Gratwick, Katharine Nawaal & Eberhard, Anton, 2008. "Demise of the standard model for power sector reform and the emergence of hybrid power markets," Energy Policy, Elsevier, vol. 36(10), pages 3948-3960, October.
    22. Bowen Yan & Jianxi Luo, 2017. "Measuring technological distance for patent mapping," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 68(2), pages 423-437, February.
    23. Levinthal, Daniel A, 1998. "The Slow Pace of Rapid Technological Change: Gradualism and Punctuation in Technological Change," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 7(2), pages 217-247, June.
    24. Vega-Redondo, Fernando, 1993. "Technological Change and Institutional Inertia: A Game-Theoretic Approach," Journal of Evolutionary Economics, Springer, vol. 3(3), pages 199-224, August.
    25. Phillip M Rosenzweig & Nitin Nohria, 1994. "Influences on Human Resource Management Practices in Multinational Corporations," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 25(2), pages 229-251, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mary Tripsas, 2008. "Customer preference discontinuities: a trigger for radical technological change," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 79-97.
    2. Martin Kalthaus, 2020. "Knowledge recombination along the technology life cycle," Journal of Evolutionary Economics, Springer, vol. 30(3), pages 643-704, July.
    3. Albert Faber & Koen Frenken, 2008. "Models in evolutionary economics and environmental policy: Towards an evolutionary environmental economics," Innovation Studies Utrecht (ISU) working paper series 08-15, Utrecht University, Department of Innovation Studies, revised Apr 2008.
    4. Koen Frenken & Alessandro Nuvolari, 2004. "Entropy statistics as a framework to analyse technological evolution," Chapters, in: John Foster & Werner Hölzl (ed.), Applied Evolutionary Economics and Complex Systems, chapter 5, Edward Elgar Publishing.
    5. Shih-Chang Hung & John S. Liu & Louis Y. Y. Lu & Yu-Chiang Tseng, 2014. "Technological change in lithium iron phosphate battery: the key-route main path analysis," Scientometrics, Springer;Akadémiai Kiadó, vol. 100(1), pages 97-120, July.
    6. Dertinger, Andrea & Hirth, Lion, 2019. "Reforming the Electric Power Industry in Developing Economies," EconStor Preprints 201842, ZBW - Leibniz Information Centre for Economics.
    7. Dertinger, Andrea & Hirth, Lion, 2020. "Reforming the electric power industry in developing economies evidence on efficiency and electricity access outcomes," Energy Policy, Elsevier, vol. 139(C).
    8. Burgelman, Robert A. & Grove, Andrew S., 2007. "Let Chaos Reign, Then Rein In Chaos--Repeatedly: Managing Strategic Dynamics For Corporate Longevity," Research Papers 1954, Stanford University, Graduate School of Business.
    9. Garud, Raghu & Gehman, Joel, 2012. "Metatheoretical perspectives on sustainability journeys: Evolutionary, relational and durational," Research Policy, Elsevier, vol. 41(6), pages 980-995.
    10. Giovanna Devetag & Enrico Zaninotto, 2001. "The imperfect hiding: Some introductory concepts and preliminary issues on modularity," ROCK Working Papers 010, Department of Computer and Management Sciences, University of Trento, Italy, revised 13 Jun 2008.
    11. Hazhir Rahmandad, 2012. "Impact of Growth Opportunities and Competition on Firm-Level Capability Development Trade-offs," Organization Science, INFORMS, vol. 23(1), pages 138-154, February.
    12. Vialle, Pierre & Song, Junjie & Zhang, Jian, 2012. "Competing with dominant global standards in a catching-up context. The case of mobile standards in China," Telecommunications Policy, Elsevier, vol. 36(10), pages 832-846.
    13. Broadberry Stephen, 2012. "Recent Developments in the Theory of Very Long Run Growth: A Historical Appraisal," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 53(1), pages 277-306, May.
    14. Murmann, Johann Peter & Frenken, Koen, 2006. "Toward a systematic framework for research on dominant designs, technological innovations, and industrial change," Research Policy, Elsevier, vol. 35(7), pages 925-952, September.
    15. Philip Auerswald, 2010. "Entry and Schumpeterian profits," Journal of Evolutionary Economics, Springer, vol. 20(4), pages 553-582, August.
    16. Geels, Frank W. & Kemp, René, 2007. "Dynamics in socio-technical systems: Typology of change processes and contrasting case studies," Technology in Society, Elsevier, vol. 29(4), pages 441-455.
    17. Frenken, Koen, 2006. "A fitness landscape approach to technological complexity, modularity, and vertical disintegration," Structural Change and Economic Dynamics, Elsevier, vol. 17(3), pages 288-305, September.
    18. Miklós Antal & Ardjan Gazheli & Jeroen C.J.M. van den Bergh, 2012. "Behavioural Foundations of Sustainability Transitions. WWWforEurope Working Paper No. 3," WIFO Studies, WIFO, number 46424, February.
    19. Gaël Le Mens & Michael T. Hannan & László Pólos, 2015. "Organizational Obsolescence, Drifting Tastes, and Age Dependence in Organizational Life Chances," Organization Science, INFORMS, vol. 26(2), pages 550-570, April.
    20. Jeroen Van den Bergh & Frans Oosterhuis, 2005. "An Evolutionary Economic Analysis of Energy Transitions," ERSA conference papers ersa05p823, European Regional Science Association.

    More about this item

    Keywords

    Power Sector; Institutional evolution; Phylogenetic tree; Institutional inertia; Ecological pressure; Punctuated equilibrium;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P49 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joevec:v:33:y:2023:i:2:d:10.1007_s00191-023-00813-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.