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Better Rules or Stronger Communities? On the Social Foundations of Institutional Change and Its Economic Effects

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  • Andres Rodriguez-Pose

    (Geography and Environment)

  • Michael Storper

    (Centre de sociologie des organisations)

Abstract

Much of the literature on the impact of institutions on economic development has focused on the tradeoffs between society and community as mutually opposed forms of institutional coordination. On the one hand, sociologists, geographers, and some economists have stressed the positive economic externalities that are associated with the development of associational or group life. Most economists, in contrast, hold that the development of communities may be a second-best solution to the development of formal institutions or even have negative effects, such as the promotion of rent-seeking behavior and principal-agent problems. Societal institutions—such as clear, transparent rules and enforcement mechanisms—are held to be universally positive for development. But there are no real-world cases in which only one of the two exists; society and community are always and everywhere in interaction. This interaction, however, has attracted little attention. In this article, society and community are conceived of as complementary forms of organization whose relative balance and interaction shape the economic potential of every territory. Changes in the balance between community and society take place constantly and affect the medium- and long-run development prospects of every territory. The depth and the speed of change depend on a series of factors, such as starting points in the interaction of society and community, the sources and dynamics of change, and the conflict-solving capacities of the preexisting situation.

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  • Andres Rodriguez-Pose & Michael Storper, 2006. "Better Rules or Stronger Communities? On the Social Foundations of Institutional Change and Its Economic Effects," Sciences Po publications info:hdl:2441/f0uohitsgqh, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/f0uohitsgqh8dhk980ea412b5
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    Cited by:

    1. Theresia Gunawan & Jojo Jacob & Geert Duysters, 2016. "Network ties and entrepreneurial orientation: Innovative performance of SMEs in a developing country," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 575-599, June.
    2. Andrés Rodríguez-Pose & Riccardo Crescenzi, 2008. "Mountains in a flat world: why proximity still matters for the location of economic activity," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 1(3), pages 371-388.
    3. Serkan Degirmenci, 2011. "Do Institutions Matter for Regional Economic Growth and Development? The Case of Turkey," ERSA conference papers ersa11p1374, European Regional Science Association.
    4. Andrés Rodríguez-Pose & Callum Wilkie, 2015. "Institutions and the Entrepreneurial Discovery Process for Smart Specialization," Papers in Evolutionary Economic Geography (PEEG) 1523, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2015.
    5. Nathan, Max, 2011. "The economics of super-diversity: findings from British cities, 2001-2006," LSE Research Online Documents on Economics 33578, London School of Economics and Political Science, LSE Library.
    6. Grillitsch, Markus, 2017. "Transformation Capacity of the Innovative Entrepreneur: On the interplay between social structure and agency," Papers in Innovation Studies 2017/2, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    7. Serkan Degirmenci, 2011. "Do Institutions Matter for Regional Economic Growth and Development? The Case of Turkey," ERSA conference papers ersa11p1180, European Regional Science Association.
    8. Karlsson, Charlie & Rouchy, Philippe, 2015. "Regional Economic Development, Social Capital and Governance: A Comparative Institutional Analysis France - Sweden," Working Paper Series in Economics and Institutions of Innovation 406, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    9. Prateek Goorha, 2013. "Institutions as context-sensitive control superstructures for firms," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(3), pages 327—341-3, December.
    10. Thomas Farole & Andrés Rodríguez-Pose & Michael Storper, 2007. "Social capital, rules, and institutions: A cross-country investigation," Working Papers 2007-12, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
    11. Gilles Duranton & Andrés Rodríguez-Pose & Richard Sandall, 2007. "Family Types and the Persistence of Regional Disparities in Europe," Bruges European Economic Research Papers 10, European Economic Studies Department, College of Europe.
    12. Álvarez, Inmaculada C. & Barbero, Javier & Rodríguez-Pose, Andrés & Zofío, José L., 2018. "Does Institutional Quality Matter for Trade? Institutional Conditions in a Sectoral Trade Framework," World Development, Elsevier, vol. 103(C), pages 72-87.
    13. Chaminade, Cristina & Vang, Jan, 2008. "Globalisation of knowledge production and regional innovation policy: Supporting specialized hubs in the Bangalore software industry," Research Policy, Elsevier, vol. 37(10), pages 1684-1696, December.
    14. Max Nathan, 2011. "Ethnic Inventors, Diversity and Innovation in the UK: Evidence from Patents Microdata," SERC Discussion Papers 0092, Spatial Economics Research Centre, LSE.
    15. Tobias D. Ketterer & Andrés Rodríguez‐Pose, 2018. "Institutions vs. ‘first‐nature’ geography: What drives economic growth in Europe's regions?," Papers in Regional Science, Wiley Blackwell, vol. 97(S1), pages 25-62, March.
    16. Max Nathan, 2011. "The Economics of Super-Diversity: Findings from British Cities, 2001-2006," SERC Discussion Papers 0068, Spatial Economics Research Centre, LSE.
    17. Sotarauta, Markku, 2015. "The Challenge of Combinatorial Knowledge Dynamics to Study of Institutions, Towards an Actor-centric Bottom-up View of Institutions," Papers in Innovation Studies 2015/5, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    18. Grillitsch, Markus & Sotarauta, Markku, 2018. "Regional Growth Paths: From Structure to Agency and Back," Papers in Innovation Studies 2018/1, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    19. Nicola Pontarollo, 2013. "Structural change, productivity growth and Structural Funds in European regions," ERSA conference papers ersa13p747, European Regional Science Association.
    20. Maksim Belitski & Farzana Chowdhury & Sameeksha Desai, 2016. "Taxes, corruption, and entry," Small Business Economics, Springer, vol. 47(1), pages 201-216, June.
    21. Padilla, Ramon & Vang, Jan & Chaminade, Cristina, 2008. "RIS and Developing Countries: Linking firm technological capabilities to regional systems of innovation," Papers in Innovation Studies 2008/13, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    22. V. Rekers, Josephine, 2012. "The European Spallation Source (ESS)and the geography of innovation," Papers in Innovation Studies 2012/9, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.

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