Analysing Institutions: What Method to Apply?

Abstract

This paper seeks to contribute to the ongoing debate about methods of institutional analysis. How to empirically analyse institutions and institutional change? Is there a superior method when it comes to institutional questions? We discuss these issues for the most common methods in empirical institutional analysis, i.e. case studies, econometrics, experiments and agent-based modelling. Building on Alston (1996), with reference to Williamson’s (2000) overview of institutional economics, we identify level of social analysis and research questions as two important dimensions that may guide methodological decision. Distinguishing between effects, causes and processes of institutional choice and change as the basic research questions in institutional analysis, and combining these with the four levels of social analysis (i.e., social embeddedness, institutional environment, governance structures, and resource allocation) helps to precisely distinguish between differently oriented investigations within a common theme. In addition, we discuss how the time horizon of a study, the observability and measurability of the institutions examined, and the roles that actors play therein significantly constrain possible choice sets among methods. In doing so, we identify trade-offs as well as important complementarities between applying different methods.