Historical Institutionalism and New Dimensions of Agency: Bankers, Institutions and the 2008 Financial Crisis

Abstract

This article argues that historical institutionalism has bifurcated into two competing accounts: one focused on institutional stasis and the other on change. A more encompassing theory that accounts for both processes is constructed using a more detailed account of agency – one that utilises key inputs from cognitive and social psychology. This can better account for the conditions under which institutional constraint or change occurs and is used to explain the variable behaviour of bankers in the run-up to the 2008 financial crisis.