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POPULATION AND DEVELOPMENT REVIEW 32(2): 233–262 (JUNE 2006) 233 Institutions and Development: A Conceptual Reanalysis ALEJANDRO PORTES RECENT YEARS have brought a significant change in the evolution of eco- nomics and sociology, including an unexpected convergence in their ap- proaches to issues like firms and economic development. This convergence pivots around the concept of “institutions,” a familiar term in sociology and social anthropology but something of a revolution in economics, dominated so far by the neoclassical paradigm. This development has been accompa- nied by confusion about what the new master term means and, importantly, by a failure to mine prior theoretical work that sought to order, classify, and relate the multiple aspects of social life that are now brought under the same umbrella concept. The result has been a number of ad hoc typologies that highlight some features of what needs to be explained, while obscur- ing others. In this essay, I seek to reverse these trends by recalling key concepts and distinctions in sociological theory and illustrating their analytic utility with examples from the recent literature on economic development. My argument is that recourse to these concepts and distinctions enhances our ability to analyze economic and “economically relevant” phenomena (We- ber [1904] 1949). I provide an illustration of the utility of a systematic so- ciological perspective by addressing the issue of fertility transitions, one of the central subjects of debate in modern demographic theory. The new institutionalism As Peter Evans has pointed out, the long-held consensus in economics that equated increasing capital stocks with national development has given way to an emerging view that the central role belongs to “institutions” (Evans 2004a). He approvingly quotes Hoff and Stiglitz (2001: 389) to the effect that “development is no longer seen as a process of capital accumulation, but as a

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Page 1: Institutions and Development: A Conceptual Reanalysis

POPULATION AND DEVELOPMENT REVIEW 32(2) : 233–262 (JUNE 2006) 233

Institutions andDevelopment:A ConceptualReanalysis

ALEJANDRO PORTES

RECENT YEARS have brought a significant change in the evolution of eco-nomics and sociology, including an unexpected convergence in their ap-proaches to issues like firms and economic development. This convergencepivots around the concept of “institutions,” a familiar term in sociology andsocial anthropology but something of a revolution in economics, dominatedso far by the neoclassical paradigm. This development has been accompa-nied by confusion about what the new master term means and, importantly,by a failure to mine prior theoretical work that sought to order, classify,and relate the multiple aspects of social life that are now brought under thesame umbrella concept. The result has been a number of ad hoc typologiesthat highlight some features of what needs to be explained, while obscur-ing others.

In this essay, I seek to reverse these trends by recalling key conceptsand distinctions in sociological theory and illustrating their analytic utilitywith examples from the recent literature on economic development. Myargument is that recourse to these concepts and distinctions enhances ourability to analyze economic and “economically relevant” phenomena (We-ber [1904] 1949). I provide an illustration of the utility of a systematic so-ciological perspective by addressing the issue of fertility transitions, one ofthe central subjects of debate in modern demographic theory.

The new institutionalism

As Peter Evans has pointed out, the long-held consensus in economics thatequated increasing capital stocks with national development has given wayto an emerging view that the central role belongs to “institutions” (Evans2004a). He approvingly quotes Hoff and Stiglitz (2001: 389) to the effect that“development is no longer seen as a process of capital accumulation, but as a

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process of organizational change.” Sociologists of development, includingEvans himself and several nonorthodox economists, have been saying thesame thing for decades without their arguments succeeding in swaying theeconomic mainstream (Evans 1979, 1995; Hamilton and Biggart 1988; Portes1997; Hirschman 1958, 1963). Not until two Nobel laureates in economics,Joseph Stiglitz and Douglass North, elaborated the same arguments were someof those in the mainstream convinced. When North declared that “institu-tions matter,” other analysts started to take them into account.

By 2004, the development economist Gérard Roland declared that “weare all institutionalists now” (Roland 2004: 110). While in other areas ofthe discipline the new institutionalists still battle neoclassical orthodoxy, inthe field of economic development that struggle seems to have ended. Soci-ologists have generally welcomed this “institutional turn” (Evans 2004b;Nee 2005) as a vindication of their own ideas, albeit with a critical omis-sion. Swayed perhaps by the promise of interdisciplinary collaboration inthe wake of the new ideas, they have overlooked a fundamental fact: econo-mists do not routinely deal with the multiple elements of social life or theirinteraction and, in their attempts to do so, they often confuse them, pro-ducing impoverished or simply erroneous perceptions of reality.

Other observers have noted the same problem and put it in still morecritical terms. Geoffrey Hodgson states:

The blindness may be partial, but the impairment is nevertheless serious anddisabling. What is meant by this allegation of blindness is that, despite theirintentions, many mainstream economists lack the conceptual apparatus todiscern anything but the haziest institutional outlines … [they] have not gotadequate vision tools to distinguish between different types of institutions,nor to appraise properly what is going on in them. (Hodgson 2002: 148)

This judgment may be too harsh because, after all, institutional econo-mists have taken the first steps toward incorporating key elements of socialreality into their analyses. However, the level of interdisciplinary collabora-tion needed to do this optimally is still lacking. The first question is whatinstitutions actually are. The answer that emerges from economics is a dis-parate set of factors that range from social norms to values, and all the way to“property rights” and complex organizations such as corporations and agen-cies of the state (Haggard 2004; Williamson 1975, 1985). North (1990: 3)defined institutions as “any form of constraint that human beings devise toshape human interaction,” a vague definition that encompasses everythingfrom norms introjected in the process of socialization to physical coercion.

From this thin definition, all that can be said is that institutions existwhen something exerts external influence over the behavior of social ac-tors: the same notion that Durkheim identified as “norms” more than acentury ago and not sufficient to capture the dynamics of communities and

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societies. In a recent attempt to clarify the concept, Roland (2004) has de-veloped a typology that distinguishes between “slow-moving” institutions(like culture) and “fast-moving” institutions (like legal rules and organiza-tional blueprints). In his view, the reason transplanted institutional blue-prints fail to achieve their objectives in many countries of the global Southis that they clash with the host country’s “slow-moving” institutions suchas social norms and entrenched power structures.

To convey the flavor of the ad hoc sociology now being developed ineconomics, two examples from Roland’s essay suffice:

Whatever group holds power will use that power in its own best interest.Thus, ruling elites who have a vested interest in maintaining their power insocieties with inefficient institutions may not agree to give up that powerbecause the winners of institutional change may not be able to commit tocompensation schemes for the losers. (ibid.: 115)

[I]n general, social norms and values change slowly. Even individual socialnorms, such as attitudes towards the death penalty or acceptance of corrup-tion, tend to change rather slowly, possibly because many norms are rootedin religions whose basic precepts have changed remarkably little for centu-ries.… (Roland 2004: 116)

Norms are indeed rooted in values that tend to resist change, and powerstructures change slowly because powerholders prefer not to give up theirprivileges. Confronted with such commonplace assertions, some sociologistshave accepted these well-intentioned but elementary incursions into famil-iar terrain as the basis for a “new institutionalism” in sociology (Nee andIngram 1998). From the field of socioeconomics have come additional at-tempts to impose some order on this conceptual murkiness. Hollingsworth(2002), for example, distinguishes between “institutions” (norms, rules, con-ventions, values, habits, etc.), “institutional arrangements” (markets, states,corporate hierarchies, networks, etc.), “institutional sectors” (financial sys-tems, systems of education, business systems), “organizations,” and “out-puts and performance” (quantity and quality of products, etc.). This typol-ogy is, unfortunately, ad hoc, suffering again from the tendency to lumpdisparate elements under the same concept and failing to distinguish be-tween different levels of causal significance.

Neoinstitutionalism has also traveled to the realm of politics, where ithas been used, as in economics, to denote the constraints that the socialcontext puts on the actions of “rational man,” thus leading to “boundedrationality” (Dolsak and Ostrom 2003; Elster, Offe, and Preuss 1998). Whileitself unimpeachable, this assertion leaves open the question of what arethe features of social context that actually “bound” rational action. Sayingsimply that everything depends on time and place leads us nowhere theo-retically, as this statement is nonfalsifiable.

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Moving things further, Elinor Ostrom has proposed a neoinstitutionalanalysis of the “Commons,” seeking to solve the dilemma between self-in-terest and the collective good among users of the same readily available,but exhaustible common property resources. Ostrom (1990; Ostrom et al.2002) argues that neither the state nor the market does a very good job inthese situations, since they seek to impose external rules on the relevantactors. Rather, actors can devise their own enforceable institutional arrange-ments (i.e., norms) to escape the tyranny of atomized self-interest. Thesenorms again vary with time and place. As we will see shortly, Ostrom’sanalysis is compatible with a sociologically informed analysis of institutionaldevelopment, but the latter has the advantage of going beyond the simpleassertion that such arrangements vary with the local context.

In sum, development economists and neoinstitutionalists seek to fleshout North’s insight that social constraints matter. But in the absence of asolid theoretical framework, the practical results of this “institutional turn”have been what might be expected. In the hands of development practitio-ners, the new consensus has led to the attempted export of legal codes andorganizational blueprints to the global South. The dismal results of suchattempts have already been recognized (Evans 2004a; Hoff and Stiglitz 2001).However, we can do more than point out that such efforts are doomed fromthe start. Economists and other social scientists can draw on established theo-retical traditions to sharpen their conceptual tools and devise a more so-phisticated and useful mapping of social life. Sociologists can contribute tothis enterprise by refining their own conceptual legacy. The resulting “thickinstitutionalism” is preferable, in most instances, to the “thin” version nowmaking the rounds in several disciplines.

The basis for fruitful interdisciplinary collaboration is already at handand consists of a body of knowledge containing key elements for the analy-sis of what takes place in society and for the proper placement of the con-cept of “institution.” These elements include: 1) a distinction between thesymbolic realm and the material reality; 2) an understanding of the hierar-chical character of both realms; 3) an identification of the lynchpin con-cepts linking both; and 4) a theory of social change that goes beyond cur-rent institutionalist understandings of this process (Campbell 2004). Whatfollows represents my own understanding of this body of knowledge; otherauthors may provide alternative interpretations.

Culture and social structure

From its classical beginnings, modern sociology developed a central dis-tinction, consolidated by the mid-twentieth century, between culture andsocial structure. There are good reasons for this distinction. Culture em-bodies the symbolic elements crucial for human interaction, mutual un-

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derstanding, and order. Social structure is composed of actual persons en-acting roles and organized in a status hierarchy of some kind. The distinc-tion is analytical because only human beings exist in reality, but it is fun-damental to understand both the motives for their actions and theirconsequences. Culture is the realm of values, cognitive frameworks, andaccumulated knowledge. Social structure is the realm of interests, individualand collective, backed by different amounts of power. The symbolic dis-tinction provides the basis for analyzing the difference between what “oughtto be” or “is expected to be” and what actually “is” in multiple social con-texts (Merton 1936, 1968a).

The diverse elements that compose culture and social structure can bearranged in a hierarchy of causative influences: from “deep” factors, oftenconcealed below everyday social life but fundamental for its organization,to “surface” phenomena, more mutable and more readily evident. Languageand values are the “deep” elements of culture, the first as the fundamentalinstrument of human communication and the second as the motivating forcebehind “principled” action, individual or collective. The importance of val-ues can range, in turn, from fundamental moral imperatives of a society totraditions prized mostly out of custom. In every instance, values point to-ward a clear continuum between the good and desirable and the bad andabhorrent. “Neutrality” is the exact opposite of this basic element of culture(Durkheim [1897] 1965; Weber [1904] 1949). Values are deep culture be-cause they are seldom invoked in the course of everyday life. Values cometo the fore only in exceptional circumstances (Weber [1904] 1949; Merton1989). Yet they underlie, and are inferred from, aspects of everyday behav-ior that are the opposite of unrestrained self-interest, the “constraints” thatNorth, Ostrom, and others refer to.

Norms are such constraints. Values are not norms. The distinction isimportant: values represent general moral principles, and norms embodyconcrete directives for action (Newcomb, Turner, and Converse 1965;MacIver and Page [1949] 1961). Values underlie norms, which are rulesthat prescribe the “do’s” and “don’t’s” of individual everyday conduct. Theserules can be formal and codified into constitutions and laws, or they can beimplicit and informally enforced. The concept of norms has been used, atleast since Durkheim ([1901] 1982), to refer to this restraining element ofculture. Neglect of these classical analyses in the current institutionalist lit-erature has led to lumping norms with the term “institution,” which hasanother, and important, connotation, as seen below. The significance of thevalues embodied within norms is reflected in practice in the level of sanc-tions attached to the latter. Thus life in prison or the death penalty awaitsthose found guilty of deliberate murder, while loud protest and insultingremarks may be the lot of those seeking to sneak ahead in a queue (Cooley1902, 1912; Simmel [1908] 1964; Goffman 1959).

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As these examples indicate, the enforcement aspect of norms (sanc-tions) can be both formal and informal, but generally the more importantthe underlying value, the more likely that sanctions are codified and writ-ten into law or other explicit texts. This is as true of negative sanctions,such as jail terms, as of positive ones, such as awards and prizes for achieve-ment. Mores and folkways are the sociological terms used for almost a cen-tury to designate important norms reflecting major societal values, in con-tradistinction to those derived mainly from tradition (Sumner 1907; MacIverand Page [1949] 1961: 20; Merton 1968b: 331, 351).

Norms are not free-floating, but come together in organized bundlesknown as roles. This sociological concept has been neglected in the institu-tionalist literature, which thus deprives itself of a key analytic tool. For it isas role occupants that individuals enter into the social world and are sub-ject to the constraints and incentives of norms. Roles are generally definedas the set of behaviors prescribed for occupants of particular social positions(Linton 1945; Newcomb 1950: Ch. 3). Well-socialized persons shift fromrole to role effortlessly and often unconsciously as part of their daily rou-tines. The normative blueprints that constitute a role generally leave con-siderable latitude for their individual enactment. Thus the role of “physi-cian” or “mother” may be performed in very different ways by individualoccupants, while still conforming to the normative expectations for the role.Normative expectations may also vary across cultures. To anticipate the sub-sequent discussion, the roles of “policeman” or “government minister” mayembody very different behavioral blueprints in different societal contexts,despite being designated by the same formal label.

An extensive literature in both sociology and social psychology hasanalyzed roles as the building blocks of social life and as one of the lynchpinconcepts linking the symbolic world of culture to real social structures. Thesame literature has examined such dynamics as the “role set” enacted bygiven social actors and the “role conflict” or “role strain” created when nor-mative expectations in an actor’s role sets contradict each other (Cottrell1933; Linton 1945; Merton 1957; Goffman 1959, 1961; Goode 1960). Noneof these concepts has made its appearance in the ad hoc sociology beingcreated in economics, nor in the thin neoinstitutionalism currently prac-ticed in both sociology and political science. Roles are an integral part ofinstitutions, but they are not institutions and confusing the two terms weak-ens the heuristic power of both concepts.

Along with normative expectations, roles also embody an instrumen-tal repertoire of skills necessary for their proper enactment. Language is thefundamental component of this repertoire, for, without it, no other skillscan be enacted. These cultural “tool kits” also contain many other elements—from scientific and professional know-how to demeanor, forms of expres-sions, manners, and general savoir faire suitable for specific social occasions.

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Again, the cultural repertoires attached to specific roles such as “policeman”or “government minister” can vary significantly across societies, despite theformal identity of their titles. In the modern sociological literature, theseelements are referred to by the concepts of cultural capital and skills reper-toires (Bourdieu 1979, 1984; Swidler 1986; Zelizer 2005).

Power, class, and status

Parallel to the component elements of culture run those of social structure.These are not made up of moral values or generalized “do’s” and “don’t’s”flowing from them, but involve the specific and differentiated ability of so-cial actors to compel others to do their bidding. This is the realm of power,which, like that of values, is situated at the “deep” level of social life influ-encing a wide variety of outcomes, albeit in different ways. Weber’s classicdefinition of power as the ability of an actor to impose his or her will de-spite resistance is still appropriate, for it highlights the compulsory and co-ercive nature of this basic element of social structure. It does not depend onthe voluntary consent of subordinates, and, for some actors and groups tohave power, others must be excluded from access to power-conferring re-sources (Weber [1922] 1947; Veblen [1899] 1998; Mills 1959). While val-ues motivate or constrain, power enables. Naturally, elites in control ofpower-conferring resources seek to stabilize and perpetuate their positionby molding values so that the mass of the population is persuaded of the“fairness” of the existing order. Power thus legitimized becomes authority,in which subordinates readily acquiesce to their position (Weber [1922]1947; Bendix 1962: Chs. 9–10).

In Marx’s classic definition, power depends on control of the means ofproduction, but in the modern postindustrial world this definition appearsto be too restrictive (Marx [1939] 1970; [1867] 1967: Part VII). Power isconferred as well by control of the means of producing and appropriatingknowledge, by control of the means of diffusing information, and by themore traditional control of the means of violence (Weber [1922] 1947;Wright 1980, 1985; Poulantzas 1975). In the Marxist tradition, a hegemonicclass is one that has succeeded in legitimizing its control of the raw meansof power, thus transforming it into authority (Gramsci [1927–33] 1971;Poulantzas 1975). Power is not absent from contemporary institutional eco-nomics, but the emphasis is on authority relations within firms—whatWilliamson (1975, 1985) calls “hierarchies.” Although these analyses areimportant, they neglect more basic forms of power, including the power tobring firms into being in the first place. This omission supports Hodgson’sargument on the lack of tools in modern economics to understand whatinstitutions really are. For as we shall see shortly, actual institutions aremolded, to a large extent, by power differentials. Sociologists who have been

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following the economists’ lead have also neglected these differentials, aswell as the fundamental concept that flows from them: social class.

Just as values are embodied within norms, so power differentials giverise to social classes—large aggregates whose possession of or exclusion fromresources leads to varying life chances and capacities to influence the courseof events. Classes need not be subjectively perceived by their occupants inorder to be operative, for they underlie the obvious fact that people in soci-ety are ranked according to what they can or cannot do or, alternatively, byhow far they are able to implement their goals when confronted with resis-tance (Wright 1985; Wright and Perrone 1976; Poulantzas 1975). Class po-sition is commonly associated with wealth or its lack, but it is also linked toother power-conferring resources such as expertise or the “right” connec-tions (Hout, Brooks, and Manza 1993; Bourdieu 1984, 1990; Portes 2000a).As emphasized by Pierre Bourdieu (1985) dominant classes generally com-mand a mix of resources that include not only wealth, but also ties to influ-ential others (social capital) and the knowledge and style to occupy high-status positions (cultural capital).

The deep character of power seldom comes to the surface of society, for,as seen previously, its holders aim to legitimize it in the value system in orderto obtain the voluntary consent of the governed. For the same reason, classposition is not readily transparent and it is a fact, repeatedly verified by em-pirical research, that individuals with very different resources and life chancesfrequently identify themselves as members of the same “class” (Hout, Brooks,and Manza 1993; Grusky and Sorensen 1998). Legitimized power (author-ity) produces, in turn, status hierarchies; most social actors actually perceivethe underlying structure of power on the basis of such hierarchies and clas-sify themselves accordingly. In turn, status hierarchies are commonly linkedto the performance of occupational roles defined by differential bundles ofnorms and skill repertoires (MacIver and Page [1949] 1961; Newcomb, Turner,and Converse 1965: 336–341; Linton 1945).

The various elements of culture and social structure, placed at differ-ent levels of causal importance and visibility, occur simultaneously and ap-pear, at first glance, like an undifferentiated mass. Their analytic separationis required, however, for the proper understanding of social phenomena,including economic phenomena. Not everything is “constraints on behav-ior”; some elements constrain, others motivate, and still others enable.Economists have not done the conceptual spadework required to under-stand these differences. The conceptual framework outlined thus far is sum-marized in Figure 1. As the citations accompanying the text suggest, thisframework is neither new nor improvised, but forms part of a classical in-tellectual legacy neglected in the enthusiasm for the “institutionalist turn.”

Other sociologists may rearrange some of the elements of this concep-tual framework or introduce others, but I think that many will agree with

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its basic contours. In reality, all key elements of social life, both constrain-ing and enabling, are related and influence one another, but arrows areused sparingly in this diagram in order to highlight their analytic distinct-ness. Only two horizontal double arrows are included, linking the spheresof culture and social structure at the individual level (role and status) andat the collective level. This latter link is discussed next.

Institutions in perspective

As indicated in Figure 1, status hierarchies with attached roles do not gen-erally exist in isolation, but as part of social organizations. Organizations,economic and otherwise, are what social actors inhabit, and they embodythe most readily visible manifestations of the underlying structures of power(Powell 1990; DiMaggio 1990; Granovetter 2001). Institutions represent thesymbolic blueprint for organizations; they are the set of rules, written orinformal, governing relationships among role occupants in social organiza-tions like the family, schools, and other major institutionally structured ar-eas of organizational life: the polity, the economy, religion, communica-tions and information, and leisure (MacIver and Page [1949] 1961; Merton1968c; North 1990; Hollingsworth 2002).

This definition of institutions is in close agreement with everyday usesof the term, as when one speaks of “institutional blueprints.” Its validitydoes not depend, however, on this overlap, but on its analytic utility. Myposition concerning this and other concepts in the preceding sociologicalframework is nominalist. They are mental constructs whose usefulness isgiven by their collective capacity to guide our understanding of social phe-nomena, including the economy. If North and his followers denominatenorms “institutions,” then they must cope with the conceptual problem of

Organizations

Status hierarchies

Culture Social structureCausal influence

ValuesDeep Power

Norms Skills repertoires(cultural capital)

Intermediate Class structure

Visible (individuals)

Visible (collective)

Roles

Institutions

FIGURE 1 Elements of social life

NOTE: Here and in subsequent figures, arrows indicate the hypothesized direction of causal influence.

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the relationship between such “institutions” and the roles in which theyare embedded, as well as the symbolic blueprints specifying relationshipsamong such roles and, hence, the actual structure of organizations. As An-thony Giddens (1993) has noted, institutions are not social structures, theyhave social structure (i.e., organizations) as the actual embodiment of theblueprints guiding relationships between roles.

A “thick” institutionalism that bounds the concept, while systematicallyrelating it to other elements of social life, gives us the necessary analytic le-verage to understand phenomena that otherwise would be obscured. For ex-ample, the distinction between organizations and the institutions that under-lie them provides a basis for analyzing how events actually occur in social andeconomic life. For it is not the case that, once institutional rules are estab-lished, role occupants blindly follow. Instead, they constantly modify the rules,transform them, and bypass them in the course of their daily interaction.

No doubt “institutions matter,” but they are themselves subject to whatGranovetter (1985, 1992) referred to as “the problem of embeddedness”:the fact that the human exchanges that institutions seek to guide in turnaffect these institutions. That is why formal goals and prescribed organiza-tional hierarchies come to differ from how organizations operate in reality(Dalton 1959; Morrill 1991; Powell 1990). Absent this analytic separation,as well as the understanding that institutions and organizations flow fromdeeper levels of social life, everything becomes an undifferentiated masswhere the recognition that “contexts matter” produces, at best, descriptivecase studies and, at worst, circular reasoning. The following sections seek toput the aforementioned conceptual framework into motion on the basis oftwo recent examples from the literature on national development.

The failure of institutional monocropping

The most tangible practical result of the advent of institutionalism in thefield of economic development has been the attempt to transplant the insti-tutional forms of the developed West, especially the United States, into theless developed world. The definition of “institutions” employed in such at-tempts is in close agreement with that advanced here: blueprints specifyingthe functions and prerogatives of roles and the relationships among theiroccupants. Institutions and the resulting organizations may be created fromscratch—as a central bank, a stock exchange, or an ombudsman office—orthey may be remolded—as in attempts to strengthen the independence ofthe judiciary or streamline the local legislature (Haggard 2004).

Many authors have noted that these attempts to put the ideas of Northand other institutionalists into practice have not yielded the expected re-sults and have frequently backfired. Evans, in particular, calls these exer-cises in transplantation “institutional monocropping,” whereby the set of

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rules constructed by trial and error over centuries in the advanced coun-tries is grafted into different societies and expected to have comparable re-sults (Evans 2004a). Roland (2004) diagnoses the cause of the failures ofsuch efforts as lying in the gap between “slow-moving” and “fast-moving”institutions, but the actual forces at play are much more complex.

Institutional grafting takes place at the surface level of things and, assuch, faces the potential opposition of a dual set of forces grounded in thedeep structure of the receiving societies: those based on values and thosebased on power. Within the realm of culture, consider the different bundlesof norms and cultural tool kits that go into formally similar roles. That of“policeman” may entail, in less developed societies, the expectation to com-pensate paltry wages with bribe-taking, a legitimate preference for kin andfriends over strangers in the discharge of duties, and skills that extend nofurther than using firearms and readily clubbing civilians at the first sign oftrouble. The role of “government minister” may similarly entail the expec-tation of particularistic preferences in the allocation of jobs and govern-ment patronage, appointments by party loyalty rather than expertise, andthe practice of using the power of the office to ensure the long-term eco-nomic well-being of the occupant through variable levels of graft.

Such role expectations are grounded in deeply held values that privi-lege particularistic obligations and ascriptive ties and that encourage suspi-cion of official bureaucracies and seemingly universalistic rules. When im-ported institutional blueprints are superimposed on such realities, the resultsare not hard to imagine. These plans do not necessarily backfire, but theycan have a series of unexpected consequences following from the fact thatthose in charge of their implementation and the presumed beneficiaries viewreality through very different cultural lenses (O’Donnell 1994; Portes 1997,2000b).

Institutional grafting has had the purpose of strengthening certainbranches of the state, promoting a more efficient allocation of resources,and enhancing the attractiveness of the country to foreign investors. Theseare worthy goals, but they often clash with the material interests of thosein positions of power. Dominant classes in the target countries seldom will-ingly give up their positions or power-conferring resources. A struggle al-most invariably ensues in which the advantages of incumbency confer theupper hand on entrenched elites. This is why it has been so difficult to imple-ment agrarian reform policies in the face of the organized opposition of land-owners, or to increase the international competitiveness of local industriesowned by privileged groups accustomed to state protection (De Janvry andGarramón 1977; Centeno 1994; Evans 1989, 1995).

Several authors, including economists who have analyzed these dy-namics, recognize the importance of power. Karla Hoff and Joseph Stiglitz(2001: 418–420) note, for example, that imposing new sets of formal rules

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without simultaneously reshaping the distribution of power is a dubiousstrategy. Similarly, in the previously cited passage, Roland (2004: 115) rec-ognizes the obvious, that “whatever group holds power will use that powerin its own best interest.” Less well understood are two other key features ofsocial structures. The first is that “power” is not a free-floating entity, butdepends on control of certain strategic resources—capital, means of pro-duction, organized violence—that vary from country to country. Second,and more important, the existing class structure and those on top of it maybe legitimized by the value system in such a way that change is resisted notonly by those in positions of privilege, but by the mass of the population aswell. As Weber and the line of Marxist theories inspired by Gramsci recog-nized, legitimized power is particularly hard to dislodge because the massesnot only acquiesce to their own subordination, but stand ready to defendthe existing order. The experiences of “modernizing” regimes seeking todislodge entrenched theocratic authorities in the Middle East and elsewhereillustrate the decisive role of this kind of power (Lerner 1958; Levy 1966;Bellah 1958).

Following the argument of another Nobel Prize winner, Amartya Sen,Evans (2004a) offers an alternative to institutional monocropping, whichhe labels “deliberative development.” Sen’s argument for participatory de-mocracy starts with the notion that “thickly democratic” initiatives, builton public discussion and free exchange of ideas, offer the only way to reachviable development goals. For Sen (1999), thickly democratic participationis not only a means to an end, but a developmental goal in itself. Evansagrees and cites the “participatory budgeting” process in Brazilian cities domi-nated by parties of the Left as an example of the viability of deliberativedevelopment (Baiocchi 2003).

Ostrom’s (1990) analysis of and solution to the “tragedy of the com-mons,” discussed above, follow parallel lines. She, too, criticizes state at-tempts to impose external rules and deems them doomed to failure for rea-sons similar to those described by Evans. Instead, she advocates institutionalblueprints that grow out of dialogue and commitments among users of com-mon property resources. Thus fishers using the same ocean grounds havebeen able to come up with better and more durable solutions to the deple-tion of stocks than the set of rules dreamed up by state bureaucrats (Ostrom1990: 18–20).

The conceptual framework discussed previously is useful to envisionthe contrast between institutional grafting and deliberative development.As shown in Figure 2, the idea of importing institutions begins at the sur-face level and tries to push its way “upward” into the normative structureand value system of society. For reasons already seen, such efforts are likelyto meet resistance and frequent failure. The participatory strategy begins atthe other end, by engaging the population in a broad discussion of develop-ment goals (values) and the rules (norms) and technical means (skill reper-

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toires) necessary to attain them. Although the process is messy and compli-cated, the institutional blueprints that eventually emerge from these dis-cussions are likely to be successful because they correspond to the causaldirectionality of culture itself.

A key problem with deliberative development proposals, however, isthat they ignore the right-side elements of society, as outlined in Figure 1,namely those grounded in power and crystallized in the class structure. Un-less the dominant classes are somehow persuaded or compelled to go alongwith such experiments, the latter are not likely to succeed. If implementedagainst elite resistance, they are bound to be derailed into just talk—delib-eration as an end in itself. When the population mobilized to take part insuch meetings sees that they lead to nothing or produce outcomes prede-termined by the authorities, participation drops rapidly and generalized dis-content sets in (Roberts and Portes 2005; Roberts 2002).

As Sen (1999) himself recognizes, technocrats (i.e., technically trainedelites) prefer to impose institutional blueprints that enhance their powerand external image, rather than subordinate themselves to the messy delib-erations of ordinary people. Evans (2004a: 40) acknowledges as well thatthe dynamics of power are likely to be the biggest impediment to the “insti-tutionalization of deliberative institutions.” Not surprisingly, only when par-ties of the Left have gained solid control of governments have experimentsin participatory democracy been given a reasonable chance of success. Thisoccurs because authorities can mobilize the resources of government to neu-tralize resources possessed by local elites, persuading them that it is “in theirinterest” to join the deliberative process (Biaocchi 2003; Agarwala 2004).

CultureCausal influence

ValuesDeep

NormsIntermediate

Visible

Collective Institutions

FIGURE 2 Participatory democracy and institutional monocropping

Individual

Cultural repertoires

Deliberative

development

Institutional grafting

Roles{

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The privatization of the Mexican economy

Starting in 1982, Mexico’s government began a massive program of divesti-ture of the many companies that it had created. This program amounted toa radical departure from the previous state-centric model of developmentand affected the interests of almost everyone in Mexican society (Centeno1994; Ariza and Ramirez 2005). The shift came in the aftermath of the Mexi-can default of 1982 and the conditions imposed by the International Mon-etary Fund (IMF) and the US Treasury to bail out the country. Over thenext three sexenios (presidential terms), the Mexican state divested itself ofalmost everything—from the telecommunications company to the two na-tional airlines (Mexicana de Aviación and Aeroméxico).

This massive economic realignment was not accomplished without re-sistance. A great deal of money was to be made from privatizations, butthere were also a number of actors who lost power, wealth, or their jobs. Ina recent study, Dag MacLeod (2004) examined how the program was imple-mented and with what results. Mexico’s privatization of the economyamounted to drastic institutional change—a profound modification of thelegal/normative blueprints under which firms operate and their internal or-ganization. This transformation, however, could not have been accomplishedat the level of the institutions themselves, for it required the interventionof much deeper forces.

State-owned firms operated with a logic of their own, creating con-stituencies around themselves. Although frequently inefficient, they gavesecure employment to many and political capital to the line ministers andmanagers who operated them (Lomnitz 1982; Eckstein 1977). Thus,Aeromexico operated with a staff of 200 employees per airplane at a timewhen the inefficient and about-to-be-bankrupt Eastern Airlines had 146.Yet, the minute that plans for Aeromexico’s restructuring were announced,its employees struck, arguing that the firm would be profitable “if only”management were more efficient (MacLeod 2004: 123, 133).

The battle for divestment and market opening pitted the unions, themanagers of state-owned industries, and the ministries that supervised themagainst a group of reformers imbued with the new neoliberal doctrines atthe Treasury Ministry and other strategic places in the Mexican bureau-cracy. Large capitalists, foreign multinationals, and the IMF supported di-vestiture and opening; while small-firm owners, who had much to lose fromthe removal of state protection, opposed it:

Although Mexican capitalists had united briefly…, they were soon dividedagain, between large and small, internationally oriented and domestically fo-cused. As President de la Madrid began lowering tariff barriers and allowinggreater foreign investment, it soon became clear that labor would not be theonly casualty of restructuring.… (MacLeod 2004: 96)

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During President de la Madrid’s sexenio, only smaller and relativelymarginal firms were privatized. Defenders of the status quo could keep faiththat the strong corporatist traditions of the ruling party, the PRI, would inthe end prevail. Despite sustained external pressure, institutions (i.e. state-owned corporations) would not reform themselves and attempts at reformwere effectively resisted:

When it became clear during the de la Madrid administration that the verysource of political power and patronage—the parastate firm—might actuallybe taken away, officials within the bureaucracy quickly developed strategiesfor resisting privatization.

From their positions on the executive committees and boards of directors ofparastate firms, line ministers could keep a watchful eye on the efforts ofwould-be reformers.… [L]ine ministers withheld data or presented contra-dictory and incorrect data, making it virtually impossible to evaluate a com-pany.… (ibid.: 71, 75–76)

True reform, as the IMF and the multinational corporations envisionedit, could only come from the top of the power structure. This actually hap-pened during the next sexenio under President Carlos Salinas de Gortari. Aconvinced free marketeer, Salinas appointed economists of the same per-suasion to key positions in the Central Bank and the Treasury Ministry.Once there, they created new, compact, and powerful agencies to ensurethat privatization would move forward. The president shifted the balanceof power, abandoning erstwhile allies in the unions, the smaller industrial-ists, and farmers to establish a firm alliance with the larger and more inter-nationalized sector of the Mexican capitalist class.

Not willing to believe that things would take such a turn for the worse,union leaders and firm managers bypassed the new bureaucratic structuresto take their case directly to the president. To no avail:

When the UDEP [Unit for the Divestiture of Parastate Entities] began the pro-cess of privatizing parastate firms, labor leaders, line ministers, and execu-tives of parastate firms often sought to circumvent the authority of the UDEPby appealing directly to the president. President Salinas regularly sent thesesupplicants back to the director of the UDEP.… This process quickly solidifiedthe authority of the UDEP within the Mexican bureaucracy. (ibid.: 81–82)

The “sale of the state” engineered by UDEP in subsequent yearsamounted to a major case of institutional transformation; it also representsa clear example of the dynamics of power. As shown in Figure 3, reformsinitiated from the outside and from below barely made a dent in the Mexi-can corporatist structure. It was necessary for the country’s top political and

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economic leadership to get involved in order to overcome strong and orga-nized resistance from various classes. Unionized workers and national en-trepreneurs became the losers in this giant power struggle that saw the Mexi-can labor market become far more “flexible” and the Mexican corporationfar more open to external competition and takeover (Shaiken 1990, 1994;Ariza and Ramirez 2005). As elsewhere, significant institutional and orga-nizational change did not originate with organizations themselves, but re-quired major transformations at deeper levels of the social structure.

However, just as attempted transformations of existing institutions canmeet with resistance from power holders in the social structure, power playsthat impose institutional change can produce generalized opposition whenthe underlying values remain unaltered. The Salinas reforms took placeagainst a background of public skepticism about the need to denationalizethe economy and strong opposition from many sectors of Mexican society(MacLeod 2004). Salinas ended his term in disgrace, becoming an unpopu-lar figure and eventually being forced to leave the country. While the courseon which he set the Mexican economy remains unaltered, there are grow-ing signs of resistance from the mass of the population inasmuch as theannounced benefits of privatization have failed to materialize (Ariza andRamirez 2005). “Neoliberalism” itself has become an epithet, and Mexicanparties and politicians seeking office now distance themselves from the termand the privatizing reform imposed from above under its guidance (DelgadoWise 2005).

SocialstructureCausal influence

PowerDeep

Class structureIntermediate

Visible

Collective Organizations(parastate firms)

FIGURE 3 The divestiture of parastate corporations in Mexico

Individual Status hierarchies

External influence andpressure from the IMF and

other foreign agencies

Presidentialmandate inalliance with topcapitalists andstate bureaucrats

Institutions{

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The problem of change

Diffusion and path dependence

In his recent book, Institutional Change and Globalization (2004), JohnCampbell systematically describes the different schools of institutional anal-ysis that exist today. These he labels “rational choice institutionalism,” as-sociated primarily with economics; “organizational institutionalism,” asso-ciated with the sociology of organizations; and “historical institutionalism,”based on political economy and certain strands of political science. Depend-ing on the school, social change is seen primarily as an evolutionary pro-cess, developing gradually over time, or as a combination of evolution and“punctuated evolution” when drastic shifts occur.

Despite these differences, Campbell characterizes all three schools asfavoring two major determinants of change. These are “path dependence,”meaning the tendency of events to follow a set course where “what existedyesterday” largely determines what happens today and what is likely to oc-cur tomorrow (Thelen 2004; North 1990); and “diffusion,” meaning the ten-dency of established institutional patterns to migrate, influencing the courseof events. Diffusion is identified by the school led by John Meyer as a mas-ter process in the contemporary global system in which the institutions ofthe advanced countries, particularly the United States, are commonly re-produced in weaker societies, either under the aegis of international agen-cies or out of the desire of local rulers to imitate the modern world (Meyerand Hannan 1979; Meyer et al. 1997).

Campbell argues that “the problem of change” has been a thorny onefor institutional analysis. This is not difficult to understand. First, with avague and contested definition of “institution,” the analysis of change con-fronts an elusive target. When an institution can be anything—from theincest taboo to the central bank—we do not have a sufficiently delimitedobject to examine how it changes over time. The sociological definition ad-vanced here—sets of rules that govern the regular relationships among roleoccupants—is sufficiently specific to allow consideration of how processesof change take place in this sector of social life. Thus defined, institutionalchange is not the same as change in the class structure or in the value sys-tem—processes that ultimately affect institutions but that occur elsewhere.

Second, with concepts such as path dependence and diffusion as themain tools for the analysis of change, it is not difficult to understand howthe predicted course of events for institutional analysis would be eitherevolution or “punctuated evolution.” It is a fact that, at the surface levelof social life, change tends to be gradual with patterned ways of doingthings largely determining the future course of events, and transforma-tions in roles and institutional blueprints occurring almost imperceptibly.

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Inter-societal diffusion of culture may operate at deeper levels, affectingthe normative and skill contents of specific roles. Diffusion of new tech-nologies (skills repertoires) and patterns of consumption (norms) from theadvanced world to the less developed countries is indeed one of the mostcommon and most important sources of change in these countries (Sassen1988; Meyer et al. 1997).

But dynamics of change are not limited to diffusion and path depen-dence; they can also exist at deeper levels of the culture and social struc-ture, producing drastic and nonevolutionary outcomes. To be sure, as ar-gued by some institutionalists, radical change tends to have long periods ofgestation, but this does not negate the fact that once such change occurs,consequences for the affected populations can be abrupt and often trau-matic. Technological changes, to take but one example, can be endogenousrather than brought about solely by diffusion. Once they occur, technologi-cal breakthroughs can affect, in a very short time, the skills repertoires and,hence, the roles of large numbers of social actors. One such example, theadvent of the Internet, is an innovation that has altered the content of oc-cupational roles and the rules linking them in most institutions of modernsociety (Castells 1998, 2001).

Religion and religious prophecies can affect the culture in still moreradical ways because they impinge directly on the value system (Wuthnow1987, 1998). Weber’s theory of social change focuses on the history of reli-gion and, specifically, on the role of charisma and charismatic prophecy asforces capable of breaking through the limits of reality, as hitherto known,and providing the impetus necessary to dismantle the existing social orderand rebuild it on a new basis. The influence of the Protestant Reformation,especially Calvinism, in revolutionizing economic life in western Europe isperhaps the best-known illustration of the effects that charismatic proph-ecy can have on society (Weber [1922] 1964; [1915] 1958).

The advent of charismatic prophecy capable of revolutionizing the valuesystem and, hence, an entire civilization occurs after a long period of his-torical gestation, but this does not prevent it from having immediate andprofound consequences once it bursts onto the scene. After Calvinism hadtransformed the social order of much of western Europe, historians hadlittle difficulty in tracing the concatenation of events that led to it. But theywould not have bothered to engage in such an exercise had Luther notnailed his 95 theses at Wittenberg and had Calvin not risen to power inGeneva. Post-hoc reconstruction of revolutionary social change can alwaysbe “evolutionary.”

For those who dismiss the role of religious charisma as a thing of thepast, one need only point to the decisive influence that Evangelical Chris-tianity continues to have in transforming large portions of American soci-ety (Wuthnow 1998; Roof 1999) and to the emergence of a fundamentalist

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brand of Islam set on ultimate confrontation with the West. The “war onterrorism” that is today the overriding concern of states in North Americaand Europe is interpretable as a direct consequence of a reenergized, char-ismatic religious prophecy seeking to remake the world in its own image(Kastoryano 2004; Kepel 1987).

Revolutionary change can also occur in the realm of social structure,as when power is wrested from its current possessors and vested in a newelite. The question of power and of class struggles has been addressed by along line of historians and social scientists, classic and contemporary. VilfredoPareto’s ([1902] 1966) theory of the circulation of elites and his remarkthat “history is but a graveyard of aristocracies” focus on the fact that domi-nant groups have never been able to maintain power indefinitely and onthe analysis of the mechanisms leading to their demise. From very differenttheoretical quarters, Marx privileged the class struggle and, at a deeper level,the conflict between new modes of production and entrenched “social rela-tions of production” as the master mechanisms leading to revolutionarychange. For Marx and his numerous followers, the internal contradictionsof feudalism that brought about its end were being recreated anew undercapitalism, as rising social classes clashed with the dominant class structure.Thus, “what the bourgeoisie creates above all are its own gravediggers” (Marxand Engels [1847] 1959: 20).

Much of contemporary historical sociology—including the writings ofBarrington Moore (1966), Theda Skocpol (1979), Charles Tilly (1984), Im-manuel Wallerstein (1974, 1991), and Giovanni Arrighi (1994)—is concernedwith the same question of revolutionary change and elite replacement. Totake one example, Skocpol’s theory of social revolutions highlights inter-elite conflict, external military pressure, and an oppressed peasantry as fac-tors that, when coming together, can drastically transform the class struc-ture and bring about a new social order. While structural change of thismagnitude occurs after a lengthy concatenation of events, this is only madeevident by the moment of social explosion itself and the ensuing events.Had Louis XVI not made the fateful decision to convene the Estates General,he could have continued residing in Versailles undisturbed, and reams ofhistorical accounts about the origins of the French Revolution would nothave been written.

Seen from the perspective of the profound consequences wrought bytransformations in a society’s value system or class structure, a theory ofchange based on path dependence and cultural diffusion looks limited in-deed. Change—whether revolutionary or not—at deeper levels of the cul-ture and social structure filters upward to the more visible levels, includinginstitutions and organizations. Thus it is possible to distinguish at least fiveforces impinging on institutions and leading to their transformation: pathdependence, producing evolutionary change at the more visible institutional

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level; diffusion, also leading to evolutionary and sometimes “punctuated”change at the intermediate levels of culture; scientific/technological break-throughs affecting the cultural skills repertoires and normative order; at adeeper level, charismatic prophecy—religious or secular—capable of trans-forming the value system and, hence, the rest of the culture; and inter-eliteand class struggles with the potential for transforming the distribution ofpower. The last three sources hold the potential for profound institutionalchange, of the type seen in the aftermath of social revolutions and epoch-making inventions.

Figure 4 graphically summarizes this discussion. Campbell (2004) con-cludes his review of institutional change by recommending that we con-sider such processes only within well-limited time frames and “in its mul-tiple dimensions.” These recommendations are unobjectionable, but do notgo far enough. While limited time frames prevent infinite regress into his-tory, they do not distinguish between evolutionary change over a givenperiod and abrupt, revolutionary transformations. Similarly, the “multipledimensions” to be considered in the analysis of change are left unspecified.

A conceptual framework such as that outlined in Figure 4 helps todistinguish between different elements of culture and social structure andthe relative impact of processes of change taking place at different levels.An institutional analysis of change limited to institutions themselves pro-duces an impoverished account of these processes, relative to what the so-cial sciences in general and sociology in particular have already accomplished.

Organizations

Statushierarchies

Forces ofchange

Forces ofchangeLevel

ValuesDeep Power

Norms

Skillsrepertoires

Intermediate Class structures

Visible (individuals)

Visible (collective)

Roles

Institutions

FIGURE 4 Levels and forces of change

SOCIALSTRUCTURECULTURE

Pathdependence

Pathdependence

Charisma/charismaticprophecies

Scientific/technologicalinnovations

Class strugglesand inter-elitecompetition

Culturaldiffusion

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Fertility transitions

As an integral part of social science, demography has been centrally con-cerned with the question of change. In particular, the issue of fertilitytransitions has occupied theorists in this field to the point that CharlesHirschman (1994) complained that a single-minded focus on this ques-tion had diverted attention from other important demographic phenom-ena. Karen Mason (1997) replied that, while this may be true, the ques-tion of fertility transition has been the “bread and butter” of demographictheorizing and a good point of departure for a systematic analysis of popu-lation change. Mason performed the spadework of reviewing all majortheories of fertility transition—from the “classic” view of urbanization andindustrialization as the key causal factors (Notestein 1953) to more re-cent “ideational” theories that emphasize the effect of diffusion on thefamily normative system and its knowledge of means of birth control(Cleland and Wilson 1987).

Mason finds fault with all these theories, noting, among other prob-lems, their failure to specify the temporal scope of their predictions andtheir lack of proper attention to the mortality declines that generally pre-cede fertility transitions. She notes accurately that the forces impinging onthe process are multiple and that seeking to identify a single major causedooms theories to failure. She then advances a complex “interactive” modelin which such factors as “acceptable number of surviving children” and “low-ered costs of prenatal controls” bear on individual perceptions, leading to amodified calculus among families about the feasibility and convenience ofimplementing fertility controls.

As a descriptive model, Mason’s account is unobjectionable; as a pre-dictive theory, however, it suffers the fatal flaw of failing to specify the forcesthat set the process into motion in the first place. Recast in the conceptualframework outlined in the preceding sections (Figures 1 and 4), changes in“acceptable number of children” are changes in values, and “lowered costsof prenatal controls” are changes in the cultural skills repertoire. The ques-tion then is what factors produced these changes, for values and culturalskills do not transform themselves. If the answer were to be “cultural diffu-sion,” the question would simply shift to what factors determined changein those geographic regions and societies from which the new values andskills emanated in the first place.

Robert Pollak and Susan Watkins (1993) cover much of the same ter-rain, but with an emphasis on orthodox economic theory and its attemptsto cope with fertility transitions. These attempts mostly seek to fit a major,discontinuous process of change into an inflexible model concerned withindividual cost–benefit calculations under the assumption of stable prefer-ences. To the contrary, institutional schools of every stripe recognize that

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this model is insufficient for the analysis of both stability and change at themacro-social level. Pollak and Watkins’s essay performs the useful serviceof highlighting the shortcomings of both standard neoclassical economicsand “bounded rationality” models that seek to incorporate the effects offactors such as diffusion and culture.

“Economists in mufti” (Pollak and Watkins 1993: 481) have come torecognize that preferences are not stable and that things like “aspirations,”“attitudes,” and “values” affect them. When they turn to culture for an an-swer, the results are not impressive because the definition of this area ofsocial life remains utterly vague. Some economists define culture as a poolof ideas from which individuals can sample; others as evaluative conversa-tions constructed on the basis of tradition; still others, closer to North, as aset of constraints within which economic actors maximize utilities (ibid.:484–485). With such inadequate conceptual tools, it is not difficult to seewhy economists have failed to unravel the determinants of fertility transi-tions, just as they have seldom gone beyond institutional monocropping inattempts to promote national development. Missing is a systematic under-standing of the different components of culture, their interrelationships, andthe causal forces impinging on them at various levels.

Geoffrey McNicoll (1980, 1992, 2001) has provided succinct reviewsof the theoretical controversies over fertility transitions and the more re-cent contributions to these debates. Like Pollak and Watkins, he does notadvance a theory of his own, but in an early article he explicitly endorsedan institutionalist approach to the problem, writing that “careful analysis ofinstitutional settings, covering both statics and dynamics, can produce quiteconvincing explanations of fertility levels and trends” (McNicoll 1980: 444).He approvingly cites Ben-Porath’s (1980) then-novel attempt to model fer-tility transitions within the framework of the economics of transaction costs,where “the family is seen as a social device for minimizing (over the longrun) a broad array of transaction costs” (ibid.: 455).

Unfortunately, this appeal for institutional analysis comes without anexplicit definition of what institutions are, or of what their relationshipsmay be with other elements of social life. Instead, McNicoll offers a series ofcase studies delineating how fertility transition occurred (or did not occur)in places like China, Bali, and Bangladesh. Although interesting, this de-scriptive material does not produce any theoretical innovation, serving onlyto validate the now familiar nostrum that “institutions (whatever they are)matter.” The observation was probably novel at the time it was penned, butthe assertion that the cause of fertility transitions depends on the particu-larities of each local context does not take us far.

About the same time, John Caldwell (1980) published an essay thatadvanced a genuine theory of fertility transitions. From a logic-of-sciencestandpoint, Caldwell’s is the most compelling argument reviewed thus far.

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This is the case not because it is necessarily true, but precisely because it isfalsifiable, as it singles out a real institutional determinant present in mul-tiple contexts. This determinant is the advent of mass public education. InCaldwell’s view, “The direction of the wealth flow between generations ischanged with the introduction of mass education, at least partly becausethe relationships between members of the family are transformed as themorality governing those relationships changes” (Caldwell 1980: 225).

The theory possesses several formal advantages over its competitors.First, it does not simply state that transitions take place when values changeor when fertility control becomes possible, but specifies the actual force thatbrings about these changes in the culture; second, it does not say that tran-sitions depend on the particular institutional context, but advances a prin-ciple that is generalizable across many such contexts; third, it avoids thetrap in which theories of diffusion fall, by identifying the force that pro-duced the early fertility transitions from which new values and skills subse-quently migrated to other societies.

Placed within the conceptual framework of Figure 4, Caldwell’s theoryrepresents a case of changes in one institution (education) bringing about amajor change in another (the family) through multiple effects on the ben-efits/costs calculus concerning children:

[E]ducation increases the cost of children far beyond the fees, uniforms, andstationery demanded by the school. Schools place indirect demands on fami-lies to provide children with better clothing, better appearance, … and extrasthat will enable the child to participate equally with other school children.But costs go beyond this. School children demand more from their parentsthan do their illiterate siblings fully enmeshed in the traditional family sys-tem and morality. (ibid.: 227)

The same conceptual framework in Figure 4 immediately suggests thequestion of what forces produced changes in educational systems in thefirst place. Apart from diffusion processes, which may be invoked to ex-plain the adoption of mass education in less developed societies, the ques-tion is what precipitated its introduction in the more advanced ones.Caldwell was so preoccupied with demonstrating the universality of themass education/fertility connection that he largely neglected this funda-mental issue, although here and there glimpses appear of what the fulltheory would look like.

First, the campaign for universal education, like the campaign for uni-versal suffrage, was an integral part of the class struggle that in England (inparticular) and western Europe (in general) pitted the industrial workingclass against the capitalist bourgeoisie. Once democracy was established andthe right to vote extended to all citizens, it was but one step to the recogni-

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tion by the elites that those newly enfranchised voters had to be made liter-ate (ibid.: 226).

Still more important was the western European competitive state sys-tem and the growing awareness among national elites that states with aneducated populace gained significant advantages, both technologically andmilitarily. The rapid Prussian ascent during the nineteenth century andPrussia’s decisive victory over France in 1870 played a key role in thesechanged perceptions:

In Prussia, Frederick the Great instituted compulsory schooling in 1763.… Whilethe schooling was not good…it had sufficient impact to stir the rest of Europe,especially after the Franco-Prussian War of 1870, and was a much-quoted pre-cedent in the struggle elsewhere for universal schooling. (ibid.: 233)

Thereafter, no governing elite in the European system could afford toignore this precedent and still dream of retaining its place in the competi-tive interstate struggle. Compulsory education became a raison d’Etat. Inthe more industrially advanced countries, its implementation was aided bythe mobilization of the urban working class pressing for the same outcomefrom below, but even in the countries of Europe’s southern and easternperipheries, autocratic governments had to yield to the inevitable.

This expanded version of Caldwell’s theory is graphically summarizedin Figure 5. It not only provides a plausible causal interpretation of the forces

EventsLevel of causality

I. Intrastate class struggles in early industrialized countries

Basic: Structural power struggles

Intermediate: Institutional change

Immediate demographic outcomes:

FIGURE 5 Expanded version of Caldwell’s theory of fertility transitions

II. Interstate competition in the nineteenth-century European system

III. State decisions to transform the educational system: Advent of compulsory mass education

IV. Families transformed as inter- generational wealth flows were reversed

V. Families take steps to reduce natality

VI. Fertility transitions launched

{{

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leading to the outcome of interest, but it is congruent with the previousanalysis of change in recognizing that: 1) institutions do not revolutionizethemselves; and 2) major institutional transformations depend on deeperlevels of the culture and the social structure. In the present case, the dy-namics of intrastate class struggles and interstate competition were the fac-tors propelling one country after another to implement major changes intheir educational systems, which (according to Caldwell) transformed theinstitution of the family by reversing the traditional offspring-to-parentswealth flows. While the theory may be falsified, it places us on a solid foot-ing to understand how major processes of change come about and, in par-ticular, what led to cascading fertility transitions.

Conclusion

Disciplinary myopia is perhaps inevitable as new generations of scholarsseek to make their mark in the world. The unfortunate consequence, how-ever, is the rediscovery or re-elaboration of what had already been foundin earlier times.

Advocates of the “institutions are everything” approach may reply thatthe conceptual framework proposed in this essay is dated since it is largelybased on the work of nineteenth- and early-twentieth-century precursors.They may add that there has been progress since then, and that “thin insti-tutionalism”—a loose definition of the concept of institutions—is more flex-ible and, for that reason, preferable in many circumstances. To this I replythat progress is indeed desirable but that, with the exception of debunkingthe patently implausible assumptions of neoclassical economics, neoinsti-tutionalism is still far from achieving its potential. I would attribute thisfailure, first, to the neglect of a rich theoretical heritage and, second, to care-less definitions. It is impossible to cumulate scientific knowledge when themaster concepts can mean practically anything. No better conceptual frame-work has been developed to replace that which is our legacy from earliergenerations of thinkers and researchers. For that reason alone, thick insti-tutionalism—a precise definition of the concept placed within a systematicframework—is preferable as the basis for future progress.

I hasten to add that the theoretical synthesis presented here is tenta-tive and subject to modification. I claim no intrinsic truth for it, save itsutility for delimiting the scope of the concept of institutions and for movingus away from an impoverished understanding of social change. The excur-sion into fertility transitions in demography may provide the basis to evalu-ate the logical character of alternative explanations of social change andthe extent to which they represent true hypotheses rather than truisms orhyped descriptions.

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