Initial Dividend and Institutional Cycles: A Unified Analytical Framework for Institutional Replacement

Why do institutional replacements historically exhibit structurally similar patterns of rise and decline? This article proposes the concept of the "Initial Dividend" as the core driving mechanism of institutional cycles and constructs a four-stage cyclical model dividend release, distributive ossification, dividend exhaustion, and legitimation crisis leading to substitution-to universally explain institutional replacement across differing historical contexts. This article argues that whenever a new institution replaces an old one, the structural transformation releases a one-time surplus of resources or efficiency gains, defined here as the "Initial Dividend." The temporal nature of this dividend is the fundamental cause of institutional cycles: when the dividend is exhausted and the vested interest structures surrounding it obstruct adaptive reform, the institution enters a legitimation crisis, creating conditions for the next round of replacement. Through four sets of comparative historical cases- -Chinese dynastic cycles, the European transition from feudalism to constitutionalism, post-war decolonization state-building, and the neoliberal turn since the 1980s-this article empirically tests the theoretical framework and clearly defines its scope, boundary conditions, and falsifiable propositions.