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James G. March and Johan P. Olsen.

The Institutional Dynamics of International Political

Orders, International Organization, Vol. 52, No. 4, International Organization at Fifty:
Exploration and contestation in the Study of World Politics. (Autumn, 1998), pp. 943 969.
This paper engages in excessive typologization and offers a new way of thinking about
international institutions. Question: there has been so much change in the international political
order lately, how can we explain/predict it? Answer: through an institutionalist perspective.
Two grand issues that divide institutionalist scholars: 1) bases for action, 2) historical efficiency
1) Bases for Action: Logic of Consequences vs. Logic of Appropriateness
Logic of Consequences: people choose among alternatives by evaluating their consequences and
knowing that everyone else is choosing the same way; LOC describes rational actors pursuing
personal preferences or interests in circumstances in which there may be gains to coordinated
action. Logic of Appropriateness: actions are rule-based and are guided by identity more than
interest; LOA describes political actors acting in accordance with rules and practices that are
socially constructed, publicly known, anticipated and accepted.
2) Historical efficiency: efficient vs. inefficient.
Efficient: history is determined by, and predictable from, prior conditions of the environment.
Environment dictates order and predicting equilibrium does not depend on knowledge about
actors beyond their initial interests and resources that are imposed on them by the environment.
Inefficient: history is slow to adapt relative to the environment. Institutions depend not only on
current environment but also origin, history and internal dynamics. Environments further can
adapt to institutions; identities and preferences are the premises and products of politics.
Combining these views you get 4 perspectives:

Most theories of institutions fall in the top right quadrant, and a few more fall in the off-diagonal
quadrants. These authors want to bring in the lower-right quadrant to focus on otherwise
overlooked phenomena. They argue for the coevolution of politics and institutions - that
history is path dependent in the sense that the character of current institutions depends on the
institutions historical path, and that identities arise partly in the context of politics and become
embedded in rules, practices, beliefs and institutions.

As illustrations of perspectives from the bottom-right quadrant, they offer two mechanisms of
historical path dependence in the evolution of political order:
1) Engagement and the development of identities:
Creating identities deliberately: some believe that processes that create/sustain national civic
identities and that constitute nation-states can also be used to deliberately create/sustain
international civic identity. This can be seen in attempts to create an EU identity which has
largely been unsuccessful. Creating international identities unintentionally: 1) international
identities evolve from spillover of domestic democratic orientations and identities to intl
politics see, democratic peace theory. Also, democratic countries import democratic norms
and decision-making rules into the international arena; that is, democratic norms are contagious.
2) The practice of expert cooperation around specific tasks can that is, the influence in
identity/norm formation of epistemic communities - also have spillover effects.
2) Engagement and the development of capabilities:
Competency traps and multiple equilibria: political arrangements become more efficient as
the rules are refined, but efficiency is the enemy of adaptiveness. Positive feedback produces a
competency trap or, the tendency for a system to become firmly locked into a particular rulebased structure. To avoid the trap, a willingness to engage in experimentation is necessary, but
there is little incentive to experiment because while rewarding in the long run, its costly in the
short run. So, any experimentation that happens, it is likely not intentional. Competence and
the transformation of objectives: institutions create the foundation for new institutions and
objectives; organizations not only get better at what they do, but they find new things to do. So,
transforming capabilities means transforming agendas and goals. Elaboration of tasks is as much
a consequence of competence as a cause of it.
The point of these two illustrations: there is a difference between a perspective that assumes
identity-based action and inefficient history and a more conventional perspective that attributes
action to calculations of consequences. The latter interprets changes in an international political
order primarily in terms of exogenously specified interests and capabilities, rational actors,
expectations, and consequences. The former sees change in political order more as involving the
construction and evocation of rules, institutions, and identities, the development of capabilities
and the path-dependent meanders of an inefficient history.