Institutionalism, 'Old' and 'New'

Abstract

This chapter is about how and why institutions matter in political life. More specifically, it is about how the behaviour of political actors is shaped and conditioned by the institutional contexts in which they operate. This perspective and question define the central concerns of the so-called 'new institutionalism' in political analysis.As a discipline, political science has always been able to legitimately claim that the study of two things, power and institutions, have been at the core of its concerns and contribution. Institutions are important, because, as entities, they form such a large part of the political landscape, and because modern governance largely occurs in and through institutions. Institutions also matter because they (or at least actors within them) typically wield power and mobilise institutional resources in political struggles and governance relationships. Institutions are also said to matter because they are seen as shaping and constraining political behaviour and decision making and even the perceptions and powers of political actors in a wide range of ways. Hence, in institutional terms, students of politics have analysed party systems, the rules of electoral competition, government bureaucracies, parliaments, constitutions, the judicial system, as well as large institutional complexes made up of the government and the gamut of public institutions we call the 'state' (Bell and Head 1984 ch 1; Fenna 1998: ch 2). There have also been extensive studies of supra-national institutional complexes such as the United Nations, the European Union and other international institutional regimes that help regulate economic relations, the environment or international trade (eg the World Trade Organisation).There have also been studies of 'non-state' institutions such as business corporations and trade unions.Although debate continues on how best to define institutions and institutional boundaries, it is probably best not to think of an institution as a 'thing' but as a process or set of processes which shape behaviour. My dictionary defines an institution as 'established law, custom or practice'. The reason why institutions matter is that laws, customs and established practices in institutional and organisational settings can play a powerful role in shaping the behaviour of individuals. There is broad agreement that in defining institutions in these terms we need to focus not only on formal institutions and practices but also on informal routines or relationships. Levi (1990: 409) argues that 'the most effective institutional arrangements incorporate a normative system of informal and internalised rules'. North (1990: 36) agrees and argues that the most significant institutional factors are often informal: