Institutions and Markets

Fields of Research

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 that 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.

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