Dynamics Of Institutional Change Research Articles

The Institutional Change Dynamics of Village-Owned Enterprises in East Java: Accelerating the Welfare of Rural Communities

Village-owned enterprises are an institutional form, which embodies the participation of rural communities in the economy based on profit and mutual cooperation that is expected to be able to encourage village independence in economy. This definition will encourage how the institutional projections change and how adaptation is needed both from within the institution or from outside the institution. The dynamics in village-owned enterprises have various challenges to resolve the main problem regarding the quality of human resources and infrastructures. This article explains how the dynamics of institutional change and various forms of revitalization and growth of village-owned enterprises use the theory of institutional change approach. The study has found that village-owned enterprises in East Java have become a forum for managing every socioeconomic element into a single unit that produces economic value to improve the welfare of rural communities. Innovation and adaptation as well as human development have become the main drivers of village-owned enterprises sustainability and resilience in digitalized era.
 Keywords: village-owned enterprises, institutional change, revitalization, welfare

Model of Institutional Integration of the Community Revolving Fund as a Source of Sustainable Capital and Poverty Alleviation in Rural Areas

This study attempts to create an integration model of institutional change from a government-driven initiative, specifically the integration of community revolving funds (DBM) into Village-Owned Enterprises (BUMDesa). In particular, every village in Banyuwangi Regency having a Village Credit Bank was included in this study. This study used descriptive qualitative research. The information was gathered using a combination of in-depth interviews, participant and non-participant observation, and document reviews. The data was examined for validity using a series of source triangulation, technique triangulation, and time triangulation. The institutional dynamics of community revolving funds (DBM) arising from government policies or programs. It was governed by overlapping rules from different independent bodies, which made it challenging to implement the transformation process and expensive to do so. The Village Credit Bank and the PNPM-Mandiri activity implementation unit (UPK) were eventually merged to create the Bumdesma business unit after overcoming numerous challenges. The Inter-Village Cooperation Agency (BKAD) and Bumdesma are two new organizations that were created as a result of the institutional change process but their existence does not enhance community services. The dynamics of institutional change and transformation led to disagreements over property rights, and uncertainty surrounding ownership status sparked the emergence of Free Riders who later converted BKD assets into KSPs run by a number of former managers, which in turn had an impact on the sale of BKD assets to private parties. The institutional transformation process caused BKD's institutional nature to move from private goods to common goods as a secondary bank of BRI. The oversight of Microfinance ex Village Credit Bank (BKD) is the sole aspect of Bumdesa business units that are covered in this research. This research is able to contribute a model of integrating the management of Bumdesa as a Common Resource as an effort to alleviate poverty in Indonesia.

The influence of visions on cooperation among interest organizations in fragmented socio‐technical systems

AbstractThe paper shows that visions of the future can be used as a predictor of cooperation and division between actors in their efforts to shape the institutional environment, specifically policy in socio‐technical systems. Accordingly, the paper suggests a new method to analyze visions: a virtual solution space in which visions can be grouped according to their similarity. The similarity of visions is calculated based on cluster analysis. Empirically, the paper focuses on the networks between industry associations in the heating transition in the German building sector. It shows that actors whose visions of future socio‐technical system developments overlap are more likely to cooperate with each other. It also suggests that the fragmentation of the residential heating system in Germany is reflected in a fragmented actor network. Furthermore, the authors show that shared technological interests can outweigh similar visions. These fragmented technological interests hinder meaningful cooperation. This is potentially one reason why a powerful low‐carbon heating coalition in Germany that could facilitate an accelerated deployment of low‐carbon heat systems by driving policy change has not emerged to date. The paper contributes to a better understanding of how niche actors in sustainability transitions use their agency and specifically strategize to bring about institutional change. In this respect, the authors discuss how differing levels of system‐fragmentation influence transition dynamics in general and institutional change dynamics in particular.

The Formation of a Stable Technopolitical Environment as a Factor in the Development of Recursive Public Policy in Russia

Aims. Conceptualization of technopolitical sphere impact on recursive processes of public policy; defining key problems that inhibit public authorities from improving digital politics stability essential for developing public policy recursive potential.Methods. The work is based on institutional approach traditional for conducting interdisciplinary research about using informational and communicative technologies in politics and governance. Moreover, it is helpful for considering meaning of public institutes in the scope of conceptualization of technopolitical sphere stability and recursiveness as an attribute of public policy.Results. Recent approaches to understanding the essence of public policy define the efficiency of shaping political agenda, developing and making decisions as more and more dependent on expert knowledge and ways of political participation. Based on the recursiveness as a public policy attribute there is made a point of expert knowledge for building and keeping feedback linking between system elements as a key principle of public policy change as an «epistemic thing». Recursive processes progression depends on stability of technopolitical sphere that rests upon quality, direction and dynamics of institutional change, political inclusiveness. As for Russia, building technopolitical infrastructure necessary for recursive processes is in progress now and meet a wide range of political and governmental rigidity, legal framework insufficiency. In order to overcome it, public authorities shall pay attention to total improving the digital literacy, coordination, legal framework update and developing new institutes of digital intersectoral collaboration.Conclusion. In public policy and its actors recursiveness serves as a principle of systematic monitoring politics and governance which defines evolutional dynamics of these processes. Digital politics creates conditions for building recursive processes into the context of shaping political agenda, developing and making decisions. The research results highlight issues significant for contemporary political science in the context of technopolitical national development and can be enhanced with both theoretical and applied research.

Reglas, actores, potestades y equilibrios. ¿De qué hablamos cuando abordamos la propiedad como institución?

El objetivo de este texto es clarificar conceptualmente el contenido y alcance de la noción de propiedad como institución con el fin de disponerlo para su empleo en el análisis histórico. A tal fin, se repasa inicialmente el significado del concepto de instituciones desde las perspectivas que las entienden como reglas regulativas (North), como reglas constitutivas (Searle) o como equilibrios (Greif). A continuación, se examinan las tradiciones que entienden la propiedad ya sea como un vínculo binario entre un sujeto y un objeto, ya como una relación social entre sujetos en torno a un objeto en contextos específicos. Tras una caracterización de los modos de entender la dinámica de cambio institucional en términos de elección racional o de economía evolutiva, se concluye presentando una propuesta tentativa para articular el análisis bajo la forma de ‘reglas en equilibrios anidados’.

Real estate activity, democracy and land rights in rural China

Land-related conflicts have become a major cause of social unrest in China. It is common indeed for the institutional changes that accompany development to generate tensions and frictions, notably regarding land rights. Using survey data on land practices and governance in Chinese villages and prefecture-level statistics about investment in the real estate sector, we show that administrative reallocations of village land by local authorities increase with the level of real estate activity and that this effect is mitigated by the development of village-level democracy. These results are consistent with those of the handful of existing empirical studies on this topic. We thus provide empirical insight into the factors governing the evolution of land rights and land institutions in rural areas in China and the related conflicts, as well as, more generally, into the dynamics of institutional change.

Strategic responses to institutional pressures for sustainability

PurposeThe purpose of this paper is to examine the role of management control systems (MCS) in strategically responding to institutional pressures for sustainability (IPS). Drawing on institutional theory (DiMaggio and Powell, 1983) and strategic responses to institutional pressures framework (Oliver, 1991), the study argues that organisations strategically respond to IPS using MCS.Design/methodology/approachData were collected by interviewing sustainability managers of a large-scale multinational apparel manufacturing organisation with its headquarters in Sri Lanka.FindingsThe study finds that organisations actively respond to IPS using acquiescence, compromise, avoidance, defiance, and manipulation strategies. The results not only reveal that formal MCS play a critical role in complying with IPS, but also in more active responses, including compromise, avoidance, defiance, and manipulation. The findings highlight that organisations use MCS as a medium to respond strategically to IPS, and in turn, the use of MCS has important implications for organisational change and improvement.Practical implicationsThe study has implications for Western organisations, finding that suppliers committed to sustainability in Asia strategically respond to IPS as a means of strengthening outsourcing contracts, instead of blindly accepting. Findings indicate that organisational changes and success seem to be a function of strategically responding to IPS rather than operating an organisation by neglecting sustainability challenges. The organisational ability to use MCS in strategically responding to IPS has the potential for long-term value creation.Originality/valueThis study provides novel insights into the MCS, strategy and sustainability literatures by exploring different uses of MCS tools in strategically responding to IPS. More specifically, it shows how the use of MCS tools varies in supporting strategic responses, and with respective IPS. In doing so, it enhances our understanding of the importance of the use of MCS in dynamics of institutional change and practical variances in strategically responding to IPS.

The local dynamics of institutional change

The local dynamics of institutional change

Rethinking Greek Capitalism through the Lens of Industrial Relations Reform: A View until the 2015 Referendum

Although the literature on comparative capitalism has been expanded to encompass the Mixed Market Economies (MMEs) of the Mediterranean world and other less mature institutional arrangements, it can be argued that more attention needs to be accorded to internal diversity within capitalist archetypes and the nature and path of change. In focusing on the latter, this paper explores changes in Industrial relations (Ir) regulation and practice in Greece which, since the onset of the economic crisis, has shifted towards lighter regulation; however, liberalization has not meant convergence with the mature Liberal Market Economy (LME) model and its presumed associated complementarities. Based on current developments and advances in the literature on comparative capitalism, this study explores the process and dynamics of institutional change, and the long continuities that set Greece apart from both ‘disorganized’ LMEs and other MMEs. This encompasses issues such as the composition of elites, the nature of institutional path dependence and change, and the uneven and partial nature of what constitutes institutional functionality. Whilst the Greek system is commonly condemned as dysfunctional, it satisfies specific economic interests. Being impelled in one direction by a progressive movement from below, it is driven in another by external pressures, and, at home, by “unpatriotic” elites, who have little interest in stronger regulation, and may well be served by weaker governmental capabilities. As local economic elites seek to reposition themselves within the system in order to cope with shifts in the capitalist economy, it may result in them further narrowing their focus onto their own immediate concerns accommodated through economic liberalization. Smaller, marginal, players may be pushed further out of the system and/or actively choose to withdraw, the attempts of the present government to ameliorate the shocks of liberalization notwithstanding. This vests the organized labour and other civil society associations with great historic importance.

Institutions: Evolution, Path Dependency, Anachronisms and Impact

This Special Section builds on cutting edge developments in the literature on institutional change and its link to economic development. It throws fresh light on this link from both a microeconomic (firm and household level) and a macroeconomic (country and cross country level) perspective. The main message is that understanding the dynamics of institutional change is key to understanding the process of economic development, while understanding evolving institutions and their links to economic development requires an understanding of the state of flux and the heterogeneous characteristics of individual settings.

Conciliando agência e contexto na dinâmica da mudança institucional

ResumoEste ensaio apresenta estrutura analítica que busca conciliar elementos da agência e do contexto na análise de processos de mudança institucional. A estrutura está baseada na articulação entre as abordagens do institutional work e da mudança institucional gradual. Ambas as abordagens foram criadas como alternativas a perspectivas que enfatizavam demasiadamente elementos estruturais (como a path dependence theory) ou a ação (como o empreendedorismo institucional). No entanto, apesar dos ganhos analíticos que ambas trouxeram para o estudo da mudança institucional, ainda mantêm fortes vínculos com os pressupostos das tradições de pesquisa das quais emergiram. Uma aproximação entre tais esquemas teóricos permite maior rigor para investigar processos de mudança institucional e possibilita aos pesquisadores maior consciência sobre os pressupostos inerentes a cada perspectiva, assim como incentiva a busca por abordagens que encadeiem elementos capazes de prover explicação adequada para a manutenção e a mudança institucionais. No centro dessa proposta, encontra-se a busca por entender a dinâmica da vida institucional. O contexto institucional possui certo nível de plasticidade e pode ser modificado de acordo com a disponibilidade de práticas, significados e recursos. A efetivação desse potencial de mudança está relacionada à capacidade dos atores, seus níveis de reflexividade institucional e munificência de recursos. As práticas de criação, manutenção e dirupção das instituições em determinado contexto serão, portanto, resultado da interação entre as características do contexto institucional (nível de plasticidade institucional) e dos tipos de atores sociais (nível de discricionariedade institucional).

Teleodynamics and institutional change: The hardship of protecting the Amur tiger, big-leaf mahogany, and gray wolf

The global biodiversity is in decline because modern societies are organized for that purpose. The design, implementation and enforcement of international, regional and national environmental policies have not helped to reverse the trend. In our paper, we analyze the hardship of protecting the gray wolf in Finland, the big-leaf mahogany in Peru, and the Amur tiger in Russia. Our comparative approach is based on the old institutional economics, and our key concept – the unit of analysis – is a transaction, i.e. enactment, practice and transfer of formal and informal rights to future benefits. Transactions challenge, disturb and re-organize the existing institutional scaffold. William Connolly (The Fragility of Things, 2013) and Terrence Deacon (Incomplete Nature, 2012) have recently argued that teleodynamics, the purposeful and end-directed behaviors and the reactions and disturbances in other related ententional behaviors are key to understand not only the dynamics of institutional change per se but also, and especially so, the emergent patterns of behavior resulting from resistance and adaptation. These teleodynamic consequences reveal the problems in institutional fit, i.e. how the institutional arrangements, particular customary circumstances and habitual actors fit together. We abduct three types of emerging order springing from the reactions to national biodiversity policies: (i) the practice of faking the institutional fit, (ii) the practice of disobedience; and, (iii) willingness to take part in the making of new institutional arrangements. These vary according to the purpose, working rules (set of rights) and motivation. We explain the interrelated meaning of purpose, working rules and motivation in the context of institutional fit in detail. In our cases, the fit is not exactly the one envisioned through the authoritative rules and the purpose of institutional conservation, but it is an order nevertheless, and that order is not necessarily good for endangered species.

The peripheralization of Southern European capitalism within the EMU

ABSTRACTThe paper discusses the problem of the Southern European (SE) capitalism and its difficult path into the EMU (European Monetary Union), looking at the remote causes of the crisis that hit these economies. For this reason, we consider European countries as a set of asymmetrically integrated variety of capitalism. The institutional configuration chosen by Europe to aggregate the many varieties of capitalism not only reduced the political autonomy of the single states, but effectively hindered the specific coordination mechanism of Southern European (SE) capitalism which was importantly based on state intervention as a structural element and on inflationary policies. Despite the deep market-oriented reforms this change caused both structural and macroeconomic unbalances. The aim of the paper is to integrate some principles of the variety of capitalism and the dynamics of institutional change with some insights inspired by the work of Arrighi to supply a synthetic and ‘alternative’ perspective on the difficult role that Southern countries are experiencing in Europe.

Rule tensions and the dynamics of institutional change: From ‘to the victor go the spoils’ to the Stimson Doctrine

When and under what conditions do norms and rules change? Dominant conceptions of institutional change in International Relations theory are based on the idea that it is the result of a shift in power: new actors become able to impose their vision on the world. However, the source of change need not be the power or preferences of actors in society, but could come from the internal dynamics of the rule system governing these actors. This article develops recent research in this area by linking Sandholtz’s model of norm change to recent dynamic institutionalist work and exploring and specifying particular mechanisms, or types of tensions, in rule systems that produce change. Institutions and complexes of rules exhibit rule tensions: inconsistencies, ambiguities, and inadequacies that can lead to disputes over the application of the rules. Actors then have to solve problems or disputes over rule interpretation. Change can thus occur without the introduction of new actors or a shift in the power of existing actors. I apply these ideas to a significant change in the rules of war in the early 20th century: the shift from the rule ‘to the victor go the spoils’ to the Stimson Doctrine, or the rule that states should not profit from aggression.

When Institutional Work Backfires: Organizational Control of Professional Work in the Pharmaceutical Industry

AbstractIntegrating institutional and role theories, this paper develops a Logics–Roles–Action (LRA) framework for understanding how for‐profit organizations structure institutional work to managerially control the work of professionals they employ. Structurally, this institutional work involves three elements: (1) internalizing pluralistic logics (logics); (2) institutionalizing distinct roles embedded in these logics (roles); and (3) scripting goal‐oriented role enactment plans (action). An empirical examination of the LRA framework in the pharmaceutical industry evidences four distinct organizational strategies that script role enactments of sales professionals in their interactions with physicians. Each strategy is intended to reaffirm prevailing institutional logics, but eventually backfires by disrupting the very institutional structures that it seeks to maintain and replicate. We show that this disruptive effect is mediated by changes in the social knowledge of institutional work. We close with theoretical and managerial implications for organizational structuring of institutional work and dynamics of institutional change.

‘Tough Love’: How the ECB’s Monetary Financing Prohibition Pushes Deeper Euro Area Integration

This paper analyses the underlying dynamics of institutional change in economic governance in EMU. We show that the crisis revealed significant gaps between the intentions of the designers of EMU and the observed outcome. Building on the path dependence literature we use the framework of historical institutionalism to understand how policy-makers were constrained in their options for the containment and resolution of the sovereign debt crisis. We argue that the principle which prohibits the central bank from financing governments as enshrined in the Maastricht Treaty was a causal factor in fostering reform and deeper integration.

Institutional entrepreneurship and policy learning in China

PurposeThis work aims to address source and dynamics of institutional change. It seeks to develop analytic tools by adaptation of Schumpeterian notion on entrepreneurship, Nelson's work on basic institutions and specific institutions, and Nonaka's middle‐up‐down framework of knowledge management in contrast to top‐down process. Pragmatically it attempts to understand how to improve policy capacity that challenges China seriously.Design/methodology/approachThe work adopts a detailed case study method. A paired case is chosen with the criteria that they have widespread impact in China, and are representative of general and specific institutional change, respectively. Data came from mixed sources: field work and publications. Comparison of the paired cases identifies similarities and differences of different institutional change.FindingsSimilarities in the cases are in the important role of institutional entrepreneurs, crucial necessity of field experimentation, and regulatory and legislative means of knowledge processing. Differences are that centralized “top‐down” process of knowledge development, together with committed and centrally guided field experimentation, characterizes general institutional change. In contrast, coordinated and distributed “middle‐up‐down” process, together with autonomously emerged creation at the grassroots, characterizes specific institutional change.Research limitations/implicationsThis is a new research area. Many more empirical and theoretical works are needed.Practical implicationsAs to how China should improve policy capacity, the study indicates: to focus policy learning on specific parts and facets of institutional settings; to change policy‐makers' role from omni‐competent controller to catalyst/promoter of institutional change; to assign an active role to middle levels and allow broader participation and diverse experimentations.Originality/valueThe author explores interesting details of institutional entrepreneurship and institutional changes based on the two case studies. This work fills the gap of how to analyze institutional change from the innovation/innovation systems perspective.

Institutional Mobility and Mutation in the Global Capitalist System: A Neo-Polanyian Analysis of a Transnational Cotton Standards War, 1870–1945

This paper explores the dynamics of institutional change in periods of instability in the global capitalist system. Two recent bodies of literature—actor-centered institutionalism and the ‘policy mobilities’ approach—emphasize how contextual and historical specificities drive transformation as institutions move across space. However, scholars in both traditions give less attention to the systematic patterns of social conflict that influence how policies move and mutate. Drawing on the case of a standards war in the global cotton trade from 1870 to 1945, I build on these literatures by linking them to a neo-Polanyian theory of social conflict within periods of market-led development. From this view, we must understand institutions, their mobilities, and mutations as constituted by and constitutive of struggles over how the global capitalist system should be organized and in whose interests. This requires building on, but also deepening Polanyi's analysis. While Polanyi emphasized the destructive effects of liberal market projects that generate social conflict, the ‘push-backs’ against liberal market projects are more diverse than Polanyi suggested, and social conflict can also emerge out of the creative moments of liberal market expansion.

The trajectory of institutional change in Germany, 1979–2009

Over the last three decades, the German political economy can be characterized by both institutional continuity and change. Understanding the dynamics of institutional change therefore requires an examination of the interplay of changes in formal institutional rules and how organizations respond to these changes by strategic attempts to promote or hinder further change in institutions. The macro-level political story of institutional change shows a number of paradoxes resulting in unexpected and often incomplete forms of market liberalization shaped by continued support for some core features of Germany's social market economy. The resulting erosion of Germany's co-ordinated model of economic organization through networks and business associations has gone hand-in-hand with the attempts to preserve these institutions for core workers and sectors of the economy in the face of changing environments. The result is a more varied institutional landscape characterized by international diffusion of liberal policies and the politics of their variable re-embedding within a long-term path of institutional continuity.

The Image of the Institution

Problem, research strategy, and findings: How do we make coherent urban plans in an incoherent institutional setting? How are institutions born, how do they evolve? Can they be meaningfully reformed? Or are they destined to bloat and muddle through? Using in situ interviews, document analysis, and participant observation, I investigate the role of urban plans in institutional design to address sociologist Talcott Parson's call for a theory of the dynamics of institutional change. Planners used images that they invented to build new and better planning institutions. Politicians used city and metropolitan planning as a political strategy to build the institutions of metropolitan and regional governance. Plan images were tools that coordinated spatial planning and urban policy. The institutional structure of urban planning and its governance is rooted in images of urban form that extend back several generations. These empirical findings formed the basis for a cognitive, lifecycle theory of institutional change. The cognitive component of the theory adds content to institutional theory, which had been based on structure and agency. The lifecycle component spans the gaps among existing theories of institutional evolution—incremental structuration, radical revolt, and institutional design—while incorporating lifecycle end points of creation and demise. Takeaway for practice: The plan matters because the images of place that are contained in plans not only guide the planning process and the development of territory; they also shape the entire institution of governance in which planning is situated. The role of the planners—to create the image of place—points to an important leadership quality, and to a key role for planning: institutional design. Research support: The J. William Fulbright Foreign Scholarship Board, the Program for Cultural Cooperation Between Spain's Ministry of Culture and United States Universities, the Catalonian Studies Program and the Center for German and European Studies at the University of California at Berkeley, the University of California Regents, and Texas A&M University.