Government at (Institutional) Work: The State and Market Dynamics

Abstract

The state remains an undertheorized actor in studies of market change. Further, when the state's market-shaping activities are considered, they are generally characterized by notions of control over, or conflict with, market actors. In this project, we draw on theories of institutional change and management to develop and deploy an alternative perspective on state involvement in markets—one premised on collaboration. Using this conceptual framework, we examine how the state works to shape markets disrupted by ostensibly innovative entrants. Specifically, we examine the state's response to the market entry of transportation businesses Uber and Lyft, whose strategies of disregarding existing regulatory arrangements attempt to deliberately exclude the state from markets. Leveraging an institutional work perspective, we find the state engaging in four novel practices as it works to understand and shape market arrangements in conjunction with an array of interested market actors. We discuss the implications of this collaborative state behavior for studies of market change.