Journal Article

What's on the path? Path dependence, organizational diversity and the problem of institutional change in the US economy, 1900–1950

Marc Schneiberg

in Socio-Economic Review

Published on behalf of Society for the Advancement of Socio-Economics

Volume 5, issue 1, pages 47-80
Published in print January 2007 | ISSN: 1475-1461
Published online March 2006 | e-ISSN: 1475-147X | DOI: http://dx.doi.org/10.1093/ser/mwl006
What's on the path? Path dependence, organizational diversity and the problem of institutional change in the US economy, 1900–1950

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Institutionalists commonly invoke exogenous shocks or the transposition of logics across national systems to explain institutional change and new path creation. Using organizational data on American infrastructure industries, this paper shows instead how established institutional paths contain within them possibilities and resources for transformation and off-path organization. Even settled paths are typically littered with flotsam and jetsam—with elements of alternative economic orders and abandoned or partly realized institutional projects. These elements of ‘paths not taken’ are legacies of constitutional struggles and movements for alternative forms of order whose settlement or defeat help fix the path that triumphed. Moreover, they represent resources for endogenous institutional change, including the revival, reassembly, redeployment and subsequent elaboration of alternative logics within national capitalisms. As the analysis of the US case shows, such legacies underwrote the construction of an entirely different, cooperatively organized path alongside the dominant path of impersonal markets and for-profit corporations. Taken together, these findings generate new leverage for explaining institutional change. They also highlight features of the US case that have been ignored by institutionalist and ‘varieties of capitalism’ research, including internal structural variety, endogenous change processes, and the co-evolution of cooperative or coordinated and liberal market economies within American capitalism.

Keywords: capitalism; institutional change; path dependence; cooperatives; varieties of capitalism; JEL classifications: P1 capitalist systems, P13 cooperative enterprises, L3 non-profit organizations and public enterprise

Journal Article.  11440 words.  Illustrated.

Subjects: Moral Philosophy ; Corporate Social Responsibility ; Welfare Economics ; Political Economy ; Economic Sociology

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