Choosing a future based on the past: Institutions, behavior, and path dependence

Jenna Bednar, Andrea Jones-Rooy and Scott E. Page

European Journal of Political Economy, 2015, vol. 40, issue PB, 312-332

Abstract: Institutions do not always produce behavior consistent with what theory predicts, leading comparative scholars to turn to explanations based on historical or cultural exceptionalism. Context can influence not only how an institution performs but also the very choices of institutions that societies choose to govern themselves. In this paper, we construct a model that produces contextual effects that result in institutional path dependence. In doing so, we provide formal foundations for qualitative arguments that context matters and identify a contributing causal mechanism: behavioral spillovers. Using both mathematical and computational techniques, we show that spillovers provide a mechanistic explanation for how pre-existing institutions affect the performance of new institutions as well as the optimal choice among institutions. We find that these spillovers can depend on either the set or the path of previous institutions. Both results support qualitative arguments that historical institutional contexts influence outcomes in current institutions. Importantly, the spillovers depend not only on the outcomes produced in the institutions but also on the specific behavior that produces the outcomes. As a result, we show that institutions that create diverse ensembles of behaviors generate better outcomes and less path dependence than those that cause all agents to converge on the identical strategy.

Keywords: Culture; Behavioral spillovers; Institutional sequencing; Development; Agent-based models; Computational modeling (search for similar items in EconPapers)
JEL-codes: C63 D83 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0176268015000841
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:40:y:2015:i:pb:p:312-332

DOI: 10.1016/j.ejpoleco.2015.09.004

Access Statistics for this article

European Journal of Political Economy is currently edited by J. De Haan, A. L. Hillman and H. W. Ursprung

More articles in European Journal of Political Economy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().