Source Of Institutional Change Research Articles

Labor Migration as a Source of Institutional Change: Danish and Australian Construction Sectors Compared

In this article, the authors examine the role of labor immigration as a source of institutional change. They use a “most different systems” comparative case study analysis of the Danish and Australian construction sectors to examine the impact of increased labor migration on skill-sourcing practices in countries with distinct national skill formation and industrial relations institutions. Drawing on 73 interviews with industry stakeholders, the authors find that labor migration has produced liberalizing pressures in both Denmark and Australia, albeit in ways that differ from each other. The article contributes to comparative institutional scholarship by illustrating how labor migration can promote or support institutional change in a liberalizing direction by disincentivizing coordinated skill formation. Findings suggest that while national institutions mediate external pressures, such as labor migration, such pressures may affect the incentive structures that can either maintain or erode national institutions.

Culture and Institutional Changes and Their Impact on Economic and Financial Development Trajectories

The quality of institutions occupies a central place in the set of non-economic factors influencing macroeconomic dynamics and the development of financial markets. This quality is largely shaped by objective factors that accompany the historical process. Therefore, this study focuses on the driving forces of this process and how they affect the quality of institutions. It is shown that the main such force or source of institutional change is culture, interpreted in a broad sense, which includes not only that accumulated at different stages of the historical process relevant heritage, but also behavioral attitudes and value beliefs prevailing in society that affect decision-making. The thesis about the importance of culture as a source of formation of the quality of national institutions and a factor of sustainable economic dynamics is substantiated through the example of specific historical events. Underestimation of this conditionality often prioritizes economic policy goals of financial development without due consideration and assessment of institutional constraints. This factor in macroeconomic decision-making is mainly characteristic of emerging market economies. At the same time, the results of research in recent decades indicate that the impact of financial development on macroeconomic dynamics is positive and strong in conditions of high-quality institutions. This allows the article to assess the role of finance and the quality of institutions differently in the set of state economic policy priorities. As applied to individual countries with obvious deficiencies in the institutional environment, this study, referring to historical experience and modern empirical material, puts forward and substantiates the thesis that ensures a high quality of institutions is the most important priority of transforming financial development into a factor of positive and sustainable economic growth.

How Facebook (and other Social Media) Fractures Institutions: Materiality and Institutional Work

The diffusion of disinformation via social media has become a pressing societal concern for business leaders and policy makers. In recent years, disinformation has been implicated as a possible source of institutional change across a variety of societal contexts, including political contests, medical legitimacy, and scientific education. To better understand the disinformation phenomenon and how it changes institutions, we view disinformation through the lens of institutional work. From this perspective, the intentional propagation of false information represents a form of institutional work whereby actors seek to disrupt dominant institutional structures. We first focus on social media materiality or the material features of social media platforms that users interact with and the opportunities for disinformation actions that certain features afford actors. We introduce and define three social media material features: modular content, network velocity, and manifold network structures, and illustrate how they relate to three social media affordances for disinformation: crafting, amplifying, and partitioning. We then discuss a potential outcome of disinformation – institutional fracturing – as a form of institutional change. We conclude by offering recommendations for future researchers and policy makers.

Institutions under pressure: East Asian states, global markets and national firms

Institutions across East Asia are in flux as a result of market pressures and political shifts. Some changes have been adaptive while others appear to erode institutional capacity. This framework article introduces the Special Issue, developing an analytic synthesis of scholarship on institutional capacity and change. We focus on the role of markets and firms in bringing about different types of institutional change, and the reconfiguration of state roles to meet new challenges. Accounts of institutional change increasingly focus on incremental institutional change and specify different endogenous processes through which it occurs. We show that changes in the way markets are structured, or market shifts, are important sources of institutional change in East Asia. Such market shifts operate in different ways and geographical scales. They can alter actor preferences with regard to institutional form, produce a shift in the relative political influence of different actors, and prompt institutional ‘drift’ – change in the functionality of institutions due to changed circumstances. Both states and firms play a role in these changes. As the case studies in the collection show, states and firms in the region have both reacted to contextual shifts in markets and proactively led institutional change.

Institutions, situated rationality and agency in management accounting

Purpose Drawing on recent research, which recognises the situated nature of accounting practices, the purpose of this paper is to extend the Burns and Scapens (B&S) framework and to illustrate its potential for studying the situated nature of management accounting practices. The extended framework distinguishes field-level institutions (which the authors term broader institutions) and institutions within the organisation (which the authors term local institutions). To extend the B&S framework the authors draw on recent debates in institutional theory, both new institutional sociology, where the focus is now on the institutional logics perspective, and old institutional economics, where there has been debate about the relationship between institutions and actions. Design/methodology/approach While the B&S framework focussed on institutions within the organisation, the extended framework explicitly recognises institutions which extend beyond the boundaries of the organisation. It also recognises the way in which rationality and deliberation are related to human agency, as well as the power of specific individuals and/or groups to impose new rules. To illustrate the usefulness of the extended framework the research note draws on a recent study of performance measurement in the Accounting and Finance Groups of the Universities of Groningen and Manchester. Findings It is argued that local institutions within the organisation combine with the broader institutions to shape the forms of situated rationality which are applied by individuals and groups within the organisation. Different groups within an organisation (e.g. engineers and accountants) can have different forms of situated rationality, and contradictions in these forms of rationality can be a source of institutional change or resistance to change within the organisation, and can explain why accounting changes can by implemented in different ways in different organisations and also in different parts of the same organisation. Originality/value The extended framework will be useful for studying: (1) how situated rationalities evolve within an organisation, more specifically how they are shaped by both local and broader institutions; and (2) how prevailing situated rationalities shape the responses to accounting change.

Law and the Economy: An Introduction to Coasian Law and Economics

Abstract Ronald Coase was a founding father of modern law and economics. Yet, Coase distanced himself from the economic analysis of law, which today dominates the law and economics scholarship, and proposed an alternative research program, which is referred to here as “law and the economy”. As market transaction presumes the delineation of rights, which are primarily defined and enforced by law, law obviously anchors the foundation of a market economy. Moreover, changes in the legal system are a main source of institutional change that reassigns rights and redraws constraints under which rights are exercised, thus fundamentally affecting transaction costs and how the economy works. “Law and the economy” recognizes the law as an integral part of the economy and calls for the study of the economic impact of law.

Institutions, Situated Rationality and Agency in Management Accounting: Extending the Burns and Scapens Framework

Purpose Drawing on recent research, which recognises the situated nature of accounting practices, the aim of the paper is to extend the Burns and Scapens (B&S) framework and illustrate its potential for studying the situated nature of management accounting practices. The extended framework distinguishes field-level institutions (broader institutions) and institutions within the organisation (local institutions). In extending the B&S framework the paper draws on recent debates in institutional theory, both new institutional sociology (NIS), where the focus has been on the institutional logics perspective, and old institutional economics (OIE), where there has been debate about the relationship between institutions and actions. Design/Methodology/Approach While the B&S framework focussed on institutions within the organisation, our extended framework explicitly recognises institutions which extend beyond the boundaries of the organisation. It also recognises the way in which rationality and deliberation are related to human agency, as well as the power of specific individuals and/or groups to impose new rules. To illustrate the usefulness of the extended framework the paper draws on a recent study of performance measurement in the Accounting and Finance Groups of the Universities of Groningen and Manchester. Findings It is argued that local institutions (within the organisation) combine with the broader institutions to shape the forms of (situated) rationality which are applied by individuals and groups within the organisation. As different groups within an organisation (e.g., engineers versus accountants) can have different forms of (situated) rationality, and contradictions in these forms of rationality can be a source of institutional change or resistance to change within the organisation. Originality/Value The extended framework will be useful for studying: (1) how situated rationalities evolve within an organisation, more specifically how they are shaped by both local and broader institutions; and (2) how prevailing situated rationalities shape the responses to accounting change.

The Geopolitical Context for Institutional Change: The Case of Prussia in the 17th and 18th Century

After the “institutional turn” economists are now in a lively debate about the role of institutions for growth as well as the sources of institutional change. This paper discusses institutional change in Prussia in the 17th and 18th century. It shows the importance of the geopolitical context for understanding institutional change. Using three political events, the paper combines geographical, institutional and political arguments and highlights how context-sensitive institutional change can be. Prussia’s institutional change was heavily influenced by its many direct neighbours and the political necessities of that time. Therefore, time and space (location) are highly relevant for institutional change. JEL Codes: N13, O43

The Geopolitical Context for Institutional Change: The Case of Prussia in the 17thand 18thCentury

Abstract After the “institutional turn” economists are now in a lively debate about the role of institutions for growth as well as the sources of institutional change. This paper discusses institutional change in Prussia in the 17th and 18th century. It shows the importance of the geopolitical context for understanding institutional change. Using three political events, the paper combines geographical, institutional and political arguments and highlights how context-sensitive institutional change can be. Prussia’s institutional change was heavily influenced by its many direct neighbours and the political necessities of that time. Therefore, time and space (location) are highly relevant for institutional change. JEL Codes: N13, O43

Sober Intoxication: Institutional Contradictions and Identity Work in the Everyday Life of Four Religious Communities in Italy

This study explores how organization members manage institutional contradictions in their everyday life without aiming at change-oriented agency. Drawing on interviews, observations, and archival data from four religious communities in Italy, we find that when organization members experience institutional contradictions between two logics that provide conflicting identity prescriptions but to which they are emotionally attached, they engage in identity work that helps them ameliorate – but not eliminate – tensions that surface when identity elements do not align. More specifically, identity work proved integral to reaching a temporary identity truce, or reconciliation of experienced contradictions, through distancing from illegitimate others and embedding of one’s identity within an established tradition. These findings draw attention to the role of contradictions in institutional maintenance, extending theory that has tended to focus on the experience of contradictions as a source of institutional change. We discuss implications for managing institutional contradictions in everyday organizational life.

Neo-Statecraft Theory, Historical Institutionalism and Institutional Change

This article provides a critical examination of the contribution that statecraft theory, which has been subject to recent revision and development, makes to the literature on institutional change. It articulates an emergentneo-statecraft approach that offers an agent-led form of historical institutionalism. This overcomes the common criticism that historical institutionalists underplay the creative role of actors. The article also argues that the approach brings back into focus the imperatives of electoral politics as a source of institutional change and provides a macro theory of change which is also commonly missing from historical institutionalist work. It can therefore identify previously unnoticed sources of stability and change, especially in states with strong executives and top-down political cultures.

Institutions, Rationality and Agency in Management Accounting: Rethinking and Extending the Burns and Scapens Framework

Over the past decade institutional theory, and particularly the Burns and Scapens framework has been used for many studies of management accounting change [Burns, J., Scapens, R.W., (2000). Conceptualizing management accounting change: an institutional framework. Management Accounting Research, 11(1) 3-25]. This paper rethinks and extends the Burns and Scapens framework and explores changes which are needed in light of more recent work in institutional theory, both in institutional sociology where the emphasis is now on practice variations and institutional logics, and in old institutional economics where there has been debate about the relationship between institutions and actions. An extended framework is developed which recognises both external and internal institutions, the role of deliberation and human agency, and the power of specific individuals and/or groups to impose new rules. By incorporating deliberation within the framework, the importance of logics is emphasised. However, a distinction is made between institutional logics and situated logics. The latter recognise that in any specific situation there will be multiple logics which arise from the mix of internal and external institutions. Furthermore, different groups within a given organisation may have different situated logics, and contradictions in these logics can be a source of institutional change within the organisation. As the paper was stimulated by a puzzling difference in the performance measurement systems used in the Accounting and Finance Groups in the Universities of Groningen and Manchester, performance measurement in the two universities is used to illustrate the extended framework.

The role of ideas and institutional change in Finnish public sector reform

This article explores institutional change and the role of ideas in Finnish public sector reform from the late 1970s to 2007. The main purpose of the study is to explore the ideas advanced in favour of legislative reforms – what have been the objectives behind them and to what extent have the objectives and arguments changed. The analysis illustrates that there have been ideational changes behind the public sector reforms and that they have served as policy blueprints, ideological weapons and cognitive locks. The article shows that ideas are an important locus of policy development and a source of institutional change.

Who will deregulate the deregulators?

A well-intentioned and fully informed regulator may determine that the optimal policy is to deregulate the market, yet the regulator may be constrained from doing so. In this condition, deregulatory policies originate in exogenous shocks to the regulator’s choice environment. Entrepreneurship in political and economic markets is a primary source of institutional change that promotes deregulation.

Is Institutional Change in Forms of American Local Government Functional, Isomorphic, or Path Dependent?

American cities are born, change, and, sometimes, disappear. What are the sources of institutional change? One conception of institutional change focuses on the functional process of social institutions. The other emphasizes the nonfunctional processes such as institutional isomorphism and path dependence. In this paper, we explore under what circumstances American cities change their form of government. The authors suggest seven hypotheses based upon functional and nonfunctional explanations, and test these hypotheses using the probit model with a decennial panel data set spanning 350 American cities from 1940 to 2000. Particularly, in order to test the hypothesis concerning institutional isomorphism, we measure the distance between cities using GIS techniques. Not surprisingly, all three explanations get empirical support from the study.

Nested institutions and the retardation of the adaptive process

New institutionalism, constituting a middle-range theory in the social sciences over the past decade, has failed to explain the ways whereby an institutional change takes place. Viewing the world through a lens that targets the institution alone, adherents of the approach focus chiefly on the logic of institutional persistence, that is, embeddedness. A critical analysis of the notion of new institutionalism, from a systems perspective, shows that the embeddedness becomes the very source of institutional change. The established institution, the members of which adhere to the continuity that the institution embodies, cannot escape exposure to complex systemic and environmental changes. That is, the institution, which is nested in a system, cannot but experience a retardation of the adaptive process. The retardation results in institutional change and, furthermore, often precedes a systemic transformation, depending upon the significance of the institution within a given system. Copyright © 2005 John Wiley & Sons, Ltd.

Sources of Institutional Change: The Supranational Origins of Europe's New Stock Markets

The article explains a curious turn in European political economies. Between 1995 and 2005 national financial elites in twelve Western European countries created almost twenty competing new stock markets designed to improve financing alternatives for entrepreneurial companies. For a region supposedly averse to risk and U.S.-style capitalism, it is surprising that most of the new markets were modeled on the U.S.-based Nasdaq Stock Market, an iconic American institution. The author's structured comparisons of the new markets to one another, to previous ones, and to proposals that never saw the light of day reveal that the primary causes behind the creation, form, and timing of Europe's new markets lie in the political skills, motivations, and actions of supranational European Union bureaucrats. Challenging leading social science explanations for the cross-border convergence of domestic institutions, these findings show that the accumulated effects of day-to-day action by these supranational bureaucrats are potential causes of institutional innovation. The argument adds to a growing body of detailed empirical research on the domestic and global impact of the European regional polity and contributes to scholarly debates about market formation.

The Leninist Legacy and Institutional Change

Analysts of democratization and marketization in post-Communist societies have tended to treat the countries of the former Soviet bloc as an undifferentiated whole, hindering successful theorizing about the sources of institutional change in particular cases. In this light, Ken Jowitt's insightful argument about the deleterious effects of the Leninist legacy in Eastern Europe must be refined in two ways. First, the degree of proximity of different post-Communist societies to established capitalist markets should be taken into account. Second, the Leninist legacy itself must be broken down into ideological, political, socioeconomic, and cultural components.