Political and economic institutional emergence

Eric Alston

Chapter 11 in Handbook on Institutions and Complexity, 2025, pp 205-239 from Edward Elgar Publishing

Abstract: Defining rules politically poses the general question of which aspects of social ordering are tractable to public institutional resolution. But not all institutional creation is governed by the same set of emergent dynamics: self-interest subject to market discipline is quite different from self-interest subject to political discipline. Because of the structural way in which changes to political rules result in distributional consequences compared to the political status quo, their emergence is fundamentally governed by the dynamics of political self-interest. In contrast, while the public definition of economic institutions is also governed by political self-interest, emergent economic dynamics can redefine this political self-interest in socially beneficial ways. Through the analysis of the adoption of the Australian ballot and the general corporate form in the 19th century US, I argue that the emergent dynamics governing public economic institutional change make it a process more tractable to constructivist influence. This is because dynamic economic forces (which operate through mutually beneficial exchange) can disrupt political-economic equilibria. In contrast, constructivist political change is necessarily competitive, which makes such change less intrinsically related to longer-term benefits to social ordering.

Keywords: Institutional analysis; Institutional economics; Public choice; Political economy; Political institutions; Economic institutions; Emergence; Complexity theory; 19th century United States political history (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035309719
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