Inertia in Informal Institutions: Concepts and Effects

Zahra Kheiridoust

A chapter in Institutional Inertia, 2024, pp 111-129 from Springer

Abstract: Abstract This chapter investigates inertia in informal institutions, that is, the culture and values of a society. The limited cognitive capacity of the human mind and the complex relationships between different institutions are the reasons identified for the inertia of informal institutions. Humans’ limited cognitive capacity forms beliefs, on the one hand, and human habits, on the other. Concerning institutions and organizations, beliefs and habits cause institutional inertia. The limited human cognitive capacity, accompanied by issues such as human interest and the “free rider problem”, forms the inertia of informal institutions in another way. Furthermore, since we are not always faced with the inertia of informal institutions and sometimes sudden changes may occur in informal institutions, we address in this chapter the speed and direction of changes in informal institutions. Of course, culture should be dynamic and able to change along with technological and economic developments, protecting society’s cultural endowment, identity, and special values to avoid cultural revolution and decay. Furthermore, this chapter addresses viewpoints that ignore inertia in informal institutions.

Keywords: Inertia; Informal institutions; Culture; Beliefs; Habits; Bounded rationality; Institutional complementarities (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-031-51175-2_5

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DOI: 10.1007/978-3-031-51175-2_5

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