326 / Book Reviews

Linda deLeon

Information Space: A Framework for Learning in Organizations, Institutions,and Culture, by Max H. Boisot. New York: Routledge, 1995, 550 pp., NPA.

The challenge taken up by Max H. Boisot in this demanding but intriguingwork is nothing less important than the development of an economics ofinformation. Many observers have noted that the exchange and production ofinformation is handled quite differently from the way in which tangible goodsare made and traded, but these differences are generally treated as assumptionsor footnotes in today’s economics texts. Professor Boisot brings informationfront and center in a complex and detailed treatment that defies condensationin a brief review.

Boisot does not offer an economic theory of information as such. Rather, hemaps out the contours of the territory that such a theory would have to coverand presents a conceptual tool—the Information Space (or I-space)—that canbe used to study it. The I-space has three dimensions (how fortunate for pur-poses of the many diagrams that it has only three!): abstraction, codification,and diffusion. Each combination of these produces a two-dimensional space.Placing abstraction on one axis and codification on the other produces the E-space (the E stands for epistemological); movements in the E-space trace outtrajectories that express the learning strategies of individuals. Abstractionpaired with diffusion marks off the U-space (U for utility). Trajectories in the U-space are affected by the social power of those who possess abstract knowledge,which is another way of saying that well-educated professionals can restrict theflow of information about, say, health or law, to their own economic advantage.Finally, codification paired with diffusion creates the C-space (C for culture),which allows us to explore the way that different types of information andknowledge are structured and shared within a given population.

Knowledge and information flow through systems (human brains, organiza-tions, cultures), and the more abstracted and encoded these data, the easierthe flow becomes. As knowledge becomes easy to pass on, however, it is morereadily diffused. The image is of convection currents: information flows up theI-space (‘‘up,’’ because the origin of its three dimensions represents concrete,uncoded, undiffused information) as it becomes abstracted and codified, thendown again as it is diffused. Information can be embedded physically in goods(when something is made, the maker’s knowledge of how to fashion it operateson the raw materials required for its production), symbolically in documents,biologically in behavioral patterns, or socially in organizations and institutions.Thus, a political economy of information—an encompassing theory of its pro-duction and exchange—is ‘‘coextensive with a theory of culture’’ (p. 6). Toillustrate this concept, the last chapter offers a case study of economic reformsin the People’s Republic of China, Japan, and in Eastern Europe, interpretedthrough the framework of the I-space.

Theory from a wide range of disciplines—physics, cognitive psychology,economics, sociology—is used to develop the argument, and an impressivearray of phenomena—Piaget’s work on the cognitive development of children[Flavell, 1963], Kolb’s Learning Styles [Kolb, 1984], Mary Douglas on gridsand groups [Douglas, 1973]—are filtered through its lens. The most interestingchapters for the theorist of organization focus on a process Boisot calls the‘‘social learning cycle’’ and a classification of institutions as bureaucracies,markets, clans, and fiefs. In the social learning cycle, which describes how

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new knowledge is gradually built up in a social system, information is firstcrystallized through abstraction and then scattered through diffusion. The firstpart of the cycle—the creation of abstract, codified, useful knowledge—is wellknown. In this first phase, value is added. In the second phase, value is exploited;that is, value is extracted from knowledge by those who possess it in a processof controlled diffusion through which it gradually becomes available to all. Atthe bottom of the cycle, value is at a minimum, which means that structure,utility, and scarcity are at their lowest point’’ . . . from which a new cycle mayemerge through a fluctuation’’ (p. 230).

The classification of institutions uses Ouchi’s [1980] typology of markets,hierarchies, and clans, adding ‘‘fiefs,’’ or structures in which transactionallyrelevant information is uncodified, concrete, and undiffused. Fiefs are theprovince of an individual, charismatic leader (such as the entrepreneurial headof a family business); of necessity they are small units, and cohesion is basedon loyalty, obedience, and devotion. Although fiefs would seem to be a fairlyrare organizational type in modern societies, the other types are commonlyobserved, and Boisot’s description of them is entirely consonant with the waythey are used in conventional organization theory today.

The Information Space has a number of virtues. The exposition is lucid,sprinkled with the occasional bon mot (‘‘Stated bluntly, we go on treatingeconomic goods that come out of our heads as if they could be dropped onour feet’’ [p. 10]. Another virtue lies in the less-than-obvious propositions gener-ated by Boisot’s conceptual framework. For example, the notion of the sociallearning cycle suggests that the increasing codification and abstraction of infor-mation leads logically to its wider diffusion—and decreasing scarcity andutility. Accompanying these changes, organizational structures should shifttoward bureaucratization (as knowledge becomes codified) but then to markets(as knowledge is diffused through universal education, it ‘‘gradually erodes apure bureaucratic order from within’’ [p. 252]). But Boisot points out thatmarkets are not the only ‘‘resting place of failed bureaucracies.’’ Markets alsofail when ‘‘opportunities that they offer are skewed in favor of a small numberof individuals . . .’’ (p. 253); a group of ‘‘insiders’’ fits Boisot’s definition ofa clan. Third, markets can fail because bureaucratic organizations cannotadequately encode transactional complexities (roughly translated, bureaucra-cies try to treat like cases alike, but pretending they are alike is a failure toencode their complexity); in the face of this impersonality, the face-to-facepersonalism of a fiefdom gains appeal. The conclusion is that information flowsthroughout society, sometimes smoothly and sometimes not. The movement isnot always toward increasing order, toward large and efficient institutions.Rather, as diffusion occurs, the tendency will be toward forms that modernistscall ‘‘traditional,’’ thereby demonstrating their temporal provincialism.

A particularly interesting suggestion Boisot offers in his concluding chapteris that the technologies represented by the personal computer, fax, and videorecorder favor moves back down the codification scale into the region wherefiefs and clans predominate. Bureaucracies and markets cope poorly withdiscontinuous change (such organization sorts have a passion for reducinguncertainty). ‘‘Clans and fiefs, on the other hand, operating lower down theI-space, confront uncertainty on its own terms, absorbing it through socialrelationships that promote trust and commitment rather than a narrow adher-ence to rules’’ (p. 443). Advanced electronics, rather than ushering in the ageof Big Brother, might instead set the stage for a return to community.

328 / Book Reviews

The liability of The Information Space is readily understood in terms of itsown framework: The knowledge it conveys has moved so far upward in the I-space (that is, the concepts used become so abstract and codified as the argu-ment progresses) that the book achieves maximal utility and value (I hope theauthor will reap the benefits of this value-creating phase), but only for the fewwho have the wit and will to work through it. On the other hand, Boisot’sconceptual scheme is so useful and revealing that it deserves to find an audienceamong organization theorists, and among economists as well. The reader withexpertise in both fields (a James March, for example, or a Herbert Simon) willreadily understand the I-space framework, and also doubtless will find muchin it to debate. Other readers will probably prefer the theory repackaged in amore accessible format. The author himself has done this in the final casestudies of economic reform abroad. This section should indeed prove interest-ing to students of socialist transformations, although it contains some materialthat will be unintelligible to those who have not followed the preceding ar-gument.

True to his word, Boisot has not offered an economic theory of information.He does, however, provide an alluring map of the territory it should cover,with intriguing illustrations of what might be found there. The informationage has unquestionably arrived, and we who are interested in public policyare ill-provisioned to proceed into it without an adequate theory. The Informa-tion Space begins the work of understanding one of the most important phe-nomena of our time.

LINDA deLEON is Assistant Professor of Public Affairs in the Graduate Schoolof Public Affairs at the University of Colorado at Denver.

REFERENCES

Douglas, Mary (1973), Natural Symbols: Explorations in Cosmology (Middlesex, En-gland: Penguin Books).

Flavell, J. H. (1963), The Developmental Psychology of Jean Piaget (Princeton, NJ:D. Van Nostrand).

Kolb, David A. (1984), Experiential Learning (Englewood Cliffs, NJ: Prentice-Hall).Ouchi, William (1980), ‘‘Markets, Bureaucracies, and Clans,’’ Administrative Science

Quarterly 25(1), pp. 129–141.

Paul C. Light

Perspectives on Performance Measurement and Public Sector Accounting, editedby Ernst Buschor and Kuno Schedler. Berne, Switzerland: Paul Hauypt Pub-lishers, 1994, 459 pp., $58.14 cloth.Organizational Performance and Measurement in the Public Sector: Toward Ser-vice, Effort, and Accomplishment Reporting, edited by Arie Halachmi and GeertBoukaert. Westport, CT: Quorum Books, 1996, 352 pp., $75.00 cloth.Measuring Outcome in the Public Sector, edited by Peter Smith. London: Taylorand Francis, 1996, 212 pp., NPA.

Besides searching for the new paradigm in public management, there is nohotter topic in the subfield these days than performance or outcomes measure-