
Research at the International Max Planck Research School on the Social
and Political Constitution of the Economy (IMPRS-SPCE)
investigates the complex linkages between economic and social action.
Just as politics and social life are affected by pressures
for economic efficiency and economic power, economic
action is embedded in and indeed presupposes an
infrastructure of social institutions and political
decisions. In this sense, the economy as a system of action is
both politically and socially constituted.
The mutual interdependence between the
economy and society has long been a core topic in both
sociology and political science, or political economy. The
School undertakes to relate these two traditions
systematically in an effort to exploit and enhance their
synergies. In sociology, the study of the social embeddedness of
economic action is at the center of a fast-growing
subdiscipline, often referred to as the "New Economic
Sociology".

Sociology is thus reclaiming territory it had
long abandoned to economics.
The focus of the new economic
sociology is on the investigation of the functioning of
markets. While economic sociology tends to emphasize the
contribution of informal social structures to the
facilitation and direction of economic action, political
scientists have studied the contribution of formal political
institutions and collective decision-making to economic
governance. The latest offshoot of this literature, which
goes back to the institutional economics of the early
twentieth century and includes the study of organized
capitalism in the 1960s and neo-corporatism in the
subsequent decades, is the current work on the convergence
and divergence of different "varieties of capitalism".

Bringing into dialogue economic
sociology and institutionalist political science, work at
the School pursues an empirical-analytical approach rather than an
efficiency-theoretical, prescriptive approach. Understanding
and explaining how economic behavior is influenced by its
social context and vice versa takes precedence over
prescriptive theorizing aimed at finding optimally efficient
solutions to economic problems. Unlike the various
efficiency-theoretical approaches in political economy, the
program's research tries to understand how economic
institutions evolve in the real world, rather than determining
how they should, or would, evolve in an ideal world.
Technically speaking, while efficiency theory and
prescriptive modeling exogenize both the meaning of
efficiency and the preferences of actors, economic sociology
and institutionalist political economy see these as
themselves socially and politically constituted, and
they therefore undertake to treat them as endogenous.
Endogenizing economic preferences in social theory and
exploring the social and political constitution of economic
efficiency is at the core of the theoretical program of the
Research School.

Two types of social formations receiving
particular attention in the research program, are institutions
and markets. Both on their own and in their interaction institutions
are normative constructs that generate social
order by constraining specific actions while supporting
others. Recently increased attention has been paid to
institutional change as a principal subject of research and
theorizing. Debates have moved from path dependency and
punctuated equilibrium models to the exploration of various
types of gradual but nonetheless significant change, and
especially of the social mechanisms that drive them. As
economic, social and political interactions have
internationalized, the conditions, mechanisms and effects of
international institution building have become another
vibrant field of research.
Among the most promising analyses seem to be those that take
historical sequences into account consider potential
complementarities between institutions belonging to a common
context, such as a national economy, and make allowance for the
effects of multi-level institutional arrangements.
Historical-institutionalist analyses of this sort stand to
benefit from a proper microfoundation in a realistic theory
of social action which goes beyond conventional assumptions
of strategic rationality and takes the impact of bounded
cognitive capacities and environmental uncertainty seriously.
No less than institutions, markets are
social constructions. Modern economic sociology has begun to
explore the social-structural, institutional and cultural
preconditions for the development and proper functioning of
market relations. Much more research on this is needed,
however, especially in a period of liberalization and
internationalization in which a
growing range of social transactions are defined as economic
and are released from normative, political and bureaucratic
control, to be relegated to voluntary and competitive
contractual exchange under free price formation. Researchers
in this IMPRS-SPCE area study market formation in a wide variety of areas from
both a social and a political perspective, exploring how
trust, good will and cultural norms of behavior interact
with political and regulatory intervention to make markets
possible or, for that matter, impossible.

Another prominent subject at the
School is the institutional embeddedness of economic
organizations,
their relationship to political regulation, and their role
in the constitution and reproduction of markets. Over the
last twenty years, organization studies has moved much
closer to institutional analysis in sociology and political
science, focusing particularly on the institutional context
of business firms. Changes caused in the organizational structures and
strategies of firms by processes of liberalization have
become a major research theme in political economy.
Institutional constructions of "rationality" in business
strategies and structures have been investigated by
organization theorists operating in an institutionalist
tradition. Research on regional economies shows the
importance of the embeddedness of firms in social relations
of trust that are in turn partly dependent on political conditions.
The institutional embeddedness approach also contributes to
a better understanding of the organizational structure and
strategies of economic organizations other than the business
firm, such as unions and employers associations and international organizations.

Research at the School
investigates the economic effects of the institutional
structure of political systems. For example, different
election systems, power sharing between the legislative and
the executive, the degree of centralization of political
decision making, and multi-level governance all affect the
possibility of adapting existing political regulations of
the economy to changing economic needs. Understanding the
ways in which political institutions condition the range of possible
collective decisions, for example on economic reforms,
represents an indispensable contribution to the analysis of
the social and political constitution of the modern economy.

The final major topic at the School is the analysis of
the embedding of markets in larger institutional complexes.
In
Pierre Bourdieu's terminology these configurations of
institutions are called fields of (cultural) production. In
such fields not only economic goods, but also
their esthetic and normative evaluations, are produced. From this
perspective, the interplay between actors and institutions
in the creation of goods and their meaning becomes a central
topic of economic sociology and economics. The increasing
shift in consumer demand from commodities that have mainly
instrumental value towards goods that are normatively and
esthetically evaluated makes the understanding of evaluation
increasingly important. Research in this area also studies
the relevance of this development for core explanatory
categories in the investigation of social inequality, such
as class, economic stratification, and lifestyles.