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New Institutionalism in Sociology, The

New Institutionalism in Sociology, The

Mary C. Brinton
Victor Nee
Copyright Date: 1998
Published by: Russell Sage Foundation
Pages: 388
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  • Book Info
    New Institutionalism in Sociology, The
    Book Description:

    Institutions play a pivotal role in the economic functioning of any society. Understanding the foundation of social norms, networks, and beliefs within institutions is crucial to explaining much of what occurs in modern economies. Recently, economic sociologists have explored how ties among individuals and groups facilitate economic activity, while "institutional economists" have focused on the formal "rules of the game" that regulate economic processes via government and law.The New Institutionalism in Sociologyargues that a full understanding of economic life will depend on blending these new lines of research on institutions with traditional sociological insights into the social structures that lie at their core.

    The contributors to this volume explore many questions about the way institutions emerge and operate. How do grassroots mores and practices evolve to an institutional level? How do institutional norms then regulate economic activity, and what are the advantages of formal versus informal constraints? What are the sources of trust and cooperation in trading markets? What role do cultural networks play in the economic survival of immigrant communities? And how does conflict and bargaining affect the evolution of community norms?

    The New Institutionalism in Sociologyalso discusses how economic fluctuations arise from interactions between local agencies and the institutional environment. Among the topics addressed here are the influence of labor activism on the distribution of income, the association between highly competitive "winner-take-all" job markets and increased wage inequality in the United States, and the effect of property right conventions on technical innovation and productivity in pre-industrial England. A final section explores how deeply embedded cultural traditions have colored the transition from state socialism to market economies in Eastern Europe.

    The New Institutionalism in Sociologyestablishes a valuable template for a sociological conception of economic organization. Its interdisciplinary paradigm signals an important advance in understanding how institutions shape social and economic life.

    eISBN: 978-1-61044-083-7
    Subjects: Sociology

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Contributors
    (pp. ix-x)
  4. Foreword
    (pp. xi-xiv)
    Robert K. Merton

    Judging from its title, this fine volume on sociological neo-institutionalism finds its far-off origins in the vast œuvre of Émile Durkheim. After all, it was that founder of sociology who, a century ago, proceeded to define the still fledgling discipline as “the science of institutions, of their genesis and of their functioning” (1958 [1895]). For him, it was also a science in which “a social fact can be explained only by another social fact.” And lest the organizational as well as the cognitive context of this declaration of sociological independence in the division of intellectual labor not be fully understood,...

  5. Introduction
    (pp. xv-xx)
    Victor Nee and Mary C. Brinton

    Our aim is to present a set of essays that together outline the central theoretical and substantive issues of the new institutionalism in sociology. This book grew out of a series of workshops and conferences on the new institutionalism held at Cornell University from 1991 to 1996, and the Workshop on the New Institutionalism in Sociology held at the Russell Sage Foundation in New York City in May 1995. The new institutionalism as developed herein is a product of cross-disciplinary theorizing. The book thus joins other recent publications that have sought to assemble contributions that span disciplinary boundaries to theorize...

  6. 1 Sources of the New Institutionalism
    (pp. 1-16)
    Victor Nee

    The new institutionalism in sociology is part of an emerging paradigm in the social sciences. Interest in the new institutional paradigm is being driven by advances in interdisciplinary research directed at understanding and explaining institutions. In economics, this has involved rejection of the neoclassical assumption of efficiency in transactions that purportedly are costless and based on complete information. In political science, intellectual trade with economics has given rise to the field of positive political economy, which is extending the paradigm to the analysis of political institutions and the politics of markets. There this paradigm has established itself as the most...


    • 2 Embeddedness and Beyond: Institutions, Exchange, and Social Structure
      (pp. 19-45)
      Victor Nee and Paul Ingram

      Specifying the mechanisms through which institutions shape the parameters of choice is important to an adequate sociological understanding of economic action.¹ These social mechanisms, we argue, involve processes that are built into ongoing social relationships—the domain of network analysis in sociology. Yet, how institutions and networks combine to determine economic and organizational performance is inadequately theorized in the sociological study of economic life. The ways in which institutions provide a framework for economic action and the role of network ties in structuring a wide array of economic phenomena are themes pursued by two rapidly growing—but separate—literatures in...

    • 3 Of Coase and Cattle: Dispute Resolution Among Neighbors in Shasta County
      (pp. 46-76)
      Robert C. Ellickson

      This chapter reports the results of an investigation into how rural landowners in Shasta County, California, resolve disputes arising from trespass by livestock. The results provide an empirical perspective on one of the most celebrated hypothetical cases in the law-and-economics literature. In his landmark article, “The Problem of Social Cost,”¹ economist Ronald Coase invoked as his fundamental example a conflict between two neighbors—a rancher running cattle and a farmer raising crops. Coase used the Parable of the Farmer and the Rancher to illustrate what has come to be known as the Coase Theorem. This unintuitive proposition asserts, in its...

    • 4 Cultural Beliefs and the Organization of Society: A Historical and Theoretical Reflection on Collectivist and Individualist Societies
      (pp. 77-104)
      Avner Greif

      The organization of a society—its economic, legal, political, social, and moral enforcement institutions, together with its social constructs and information transmission and coordination mechanisms—profoundly affects its economic performance and growth. It determines the cost of various feasible actions as well as wealth distribution. Although this theme goes back at least to Adam Smith, it has recently been the focus of historical and theoretical studies. For example, North (1991) attributed the growth performance of nations throughout history to differences in their enforcement mechanisms. North and Weingast (1989) claimed that England’s unique political institutions encouraged economic growth. Marimon (1988) examined...

    • 5 Conflict over Changing Social Norms: Bargaining, Ideology, and Enforcement
      (pp. 105-126)
      Jack Knight and Jean Ensminger

      Social norms are the foundation of social life. They govern social relations and establish expectations as to how we are to act in our everyday affairs. They facilitate continuity across generations and among changing populations, and constitute an ongoing record of the history of social practices in a community. They structure social interactions in ways that allow social actors to gain the benefits of joint activity. And they determine in significant ways the distribution of the benefits of social life.

      These effects of social norms are the focus of much of the work in the social sciences, including among economists,...

    • 6 Embeddedness and Immigration: Notes on the Social Determinants of Economic Action
      (pp. 127-150)
      Alejandro Portes and Julia Sensenbrenner

      One of the most exciting developments in economic sociology is the recent work that promises to vindicate the heritage of Max Weber in the analysis of economic life and, by the same token, to rescue this vast field from the exclusive sway of the neoclassical perspective. Spearheaded by Mark Granovetter’s critique (1985) of a pure “market” approach to economic action, the sociological perspective has been reinforced by the introduction and subsequent use of the concept of “social capital” (Bourdieu 1979; Bourdieu, Newman, and Wàcquant 1991; Coleman 1988), the emphasis on the predictive power of contextual variables in addition to individual...


    • 7 The Organization of Economies
      (pp. 153-180)
      Gary G. Hamilton and Robert Feenstra

      Most theories of economic organization, regardless of discipline, involve sleight of hand. Theorists begin by assuming the existence of decision-making individuals. Then they provide these actors with inner motivations: desire for gain, for power, or for social honor and reputation. Driven by these motivations, economic actors are set in motion. They plot strategy, they use guile, they take actions reflexively in the company of others. Whatever they do, however, shapes the calculations and subsequent actions of others. Assuming an inherent mutuality among individuals and their actions, economic theorists then posit an orderly, organized economy, such as a capitalist economy composed...

    • 8 Institutional Embeddedness in Japanese Labor Markets
      (pp. 181-207)
      Mary C. Brinton and Takehiko Kariya

      Recent sociological arguments about labor markets have emphasized the embeddedness of labor market transactions in social relations (Granovetter 1985; Granovetter and Swedberg 1992). One such transaction is the matching of people to jobs. An extensive literature addresses the question of whether the social status and income of the jobs people enter is affected by who helped them find those jobs. Sociologists have paid particular attention to whether the type of social tie (“strong” or “weak”) between a job-searcher and a contact person affects the sort of job a person obtains (Boxman, DeGraaf, and Flap 1991; Lin, Ensel, and Vaughn 1981;...

    • 9 Winner-Take-All Markets and Wage Discrimination
      (pp. 208-223)
      Robert H. Frank

      Women and minorities continue to receive lower wages, on average, than white males with similar levels of education, training, experience, and other measures of human capital. This pattern poses a profound challenge to standard theories of competitive labor markets, which hold that workers with equal amounts of human capital will be paid the same. Defenders of standard theories attribute the wage gap to unmeasured differences in human capital. Critics of these theories, who reject the idea that labor markets are effectively competitive, attribute the gap to discrimination by employers.

      The data pose awkward questions for both camps. Whereas available evidence...

    • 10 Institutions and the Labor Market
      (pp. 224-244)
      Bruce Western

      Economic theories often take an ahistorical view of labor markets. In some analyses, labor is exchanged for wages in competitive markets much like other commodities. If unions are considered, imperfect competition models are applied just as they would be to other settings where the seller has monopoly power. The historical context of social conflict that attends empirical labor markets is neglected and the economic theories claim broad generality, independent of time and place.

      In this chapter, I offer an alternative, institutional, approach to the labor market. In this approach, social conflict is a pervasive feature of the employment relationship. This...


    • 11 Economic Performance Through Time
      (pp. 247-257)
      Douglass C. North

      Economic history is about the performance of economies through time. The objective of research in the field is not only to shed new light on the economic past but also to contribute to economic theory by providing an analytical framework that will enable us to understand economic change. A theory of economic dynamics comparable in precision to general equilibrium theory would be the ideal tool of analysis. In the absence of such a theory we can describe the characteristics of past economies, examine the performance of economies at various times, and engage in comparative static analysis; but missing is an...

    • 12 Changing the Rules: Interests, Organizations, and Institutional Change in the U.S. Hospitality Industry
      (pp. 258-276)
      Paul Ingram

      North (1990, 3) defines institutions as “the rules of the game in a society or, more formally, the humanly devised constraints that shape human interaction.” Nee and Ingram argue (in this volume) that this view of institutions is a promising base for building the new economic sociology. Combined with the simple and powerful behavioral assumption of rationality, the institutions-as-constraints position can explain a wide range of phenomena ranging from honesty in eleventh-century long-distance trade (Greif 1993), to modern business-government relationships (Hillman and Keim 1995).

      As the number of demonstrations of institutional influence on action grows in sociology and other fields,...

    • 13 The Importance of the Local: Rural Institutions and Economic Change in Preindustrial England
      (pp. 277-304)
      Rosemary L. Hopcroft

      In the application of the new institutional economics to the question of economic development, analytic primacy is typically given to economic institutions created by the state. That is, the focus usually is on the state’s role in the creation and maintenance of a variety of economic institutions such as property rights and taxation systems (Barzel 1989; de Soto 1993; Campbell and Lindberg 1990; Bates 1990; North 1990b), and their implications for development. Other economic approaches share this bias, for example, work examining the state’s role in rent seeking and its effect on development (Buchanan, Tollison, and Tullock 1980; Jones 1988;...

    • 14 Outline of an Institutionalist Theory of Inequality: The Case of Socialist and Postcommunist Eastern Europe
      (pp. 305-326)
      Iván Szelényi and Eric Kostello

      In this chapter we develop an outline of an institutionalist theory to explain the recent history of inequality in state socialist and postcommunist countries. The theory does not assume that either market or redistributive institutions are inherently responsible for generating inequality. Instead, its premise is that inequality is a function of the types of market and redistributive institutions that operate at a given historical juncture and the specific property, social, and in particular class relations in which these economic institutions are embedded. Inequality is changing in the formerly state socialist countries, and while we do not offer a theory of...

  10. Index
    (pp. 327-332)