Hostname: page-component-586b7cd67f-rdxmf Total loading time: 0 Render date: 2024-11-23T18:01:13.388Z Has data issue: false hasContentIssue false

Learning, Institutions, and Economic Performance

Published online by Cambridge University Press:  10 June 2004

C. Mantzavinos
Affiliation:
Is a senior fellow at the Max Planck Institute for Research on Collective Goods, Bonn, Germany ([email protected]). He is the author of Individuals, Institutions, and Markets
Douglass C. North
Affiliation:
Is the Spencer T. Olin Professor in Arts and Sciences at Washington University in St. Louis ([email protected])
Syed Shariq
Affiliation:
Is the Kozmetsky Senior Research Scholar at the Institute for International Studies, Stanford University ([email protected])

Abstract

In this article, we provide a broad overview of the interplay among cognition, belief systems, and institutions, and how they affect economic performance. We argue that a deeper understanding of institutions' emergence, their working properties, and their effect on economic and political outcomes should begin from an analysis of cognitive processes. We explore the nature of individual and collective learning, stressing that the issue is not whether agents are perfectly or boundedly rational, but rather how human beings actually reason and choose, individually and in collective settings. We then tie the processes of learning to institutional analysis, providing arguments in favor of what can be characterized as “cognitive institutionalism.” Besides, we show that a full treatment of the phenomenon of path dependence should start at the cognitive level, proceed at the institutional level, and culminate at the economic level.

Type
Articles
Copyright
2004 by the American Political Science Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anderson John R.1993. Rules of the Mind. Hillsdale, N.J.: Lawrence Erlbaum Associates.
Clark Andy, and Annette Karmiloff-Smith. 1993. The cognizer's innards: A psychological and philosophical perspective on the development of thought. Mind and Language 8: 4, 487 519.Google Scholar
Cohen Neal J., and Larry R. Squire. 1980. Preserved learning and retention of pattern-analyzing skill in amnesia: Dissociation of knowing how and knowing that. Science 210, 207–10.Google Scholar
Cohen Wesley, and Daniel Levinthal. 1990. Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly 35: 1, 128–52.Google Scholar
Damasio Antonio. 1999. The Feeling of What Happens: Body and Emotion in the Making of Consciousness. New York: Harcourt Brace.
Denzau Arthur T., and Douglass C. North. 1994. Shared mental models: Ideologies and institutions. Kyklos 47: 1, 3 31.Google Scholar
Donald Merlin. 1991. Origins of the Modern Mind: Three Stages in the Evolution of Culture and Cognition. Cambridge: Harvard University Press.
Ferguson Adam.1966 [1767]. An Essay on the History of Civil Society. Edinburgh: Edinburgh University Press.
Fetzer James H.1999a. Deduction and mental models. Minds and Machines 9: 1, 105–10.Google Scholar
Fetzer James H.1999b. Mental models reasoning without rules. Minds and Machines 9: 1, 119–26.Google Scholar
Finer Samuel E.1974. State-building, state boundaries, and border control. Social Science Information 13: 4/5, 79 126.Google Scholar
Gentner Dedre, Keith J. Holyoak, and Boicho N. Kokinov, eds. 2001. The Analogical Mind: Perspectives from Cognitive Science. Cambridge: MIT Press.
Gigerenzer Gerd. 2000. Adaptive Thinking: Rationality in the Real World. Oxford: Oxford University Press.
Goldberg Elkhonon. 2001. The Executive Brain: Frontal Lobes and the Civilized Mind. Oxford: Oxford University Press.
Green Leslie. 1990. The Authority of the State. Oxford: Clarendon Press.
Hall Peter. 1993. Policy paradigms, social learning, and the state: The case of economic policymaking in Britain. Comparative Politics 25: 3, 275–96.Google Scholar
Hayek Friedrich A. von1960. The Constitution of Liberty. London: Routledge and Kegan Paul.
Holland John H., Keith J. Holyoak, Richard E. Nisbett, and Paul R. Thagard. 1986. Induction: Processes of Inference, Learning, and Discovery. Cambridge: MIT Press.
Holyoak Keith J., and Paul Thagard. 1995. Mental Leaps: Analogy in Creative Thought. Cambridge: MIT Press.
Johnson-Laird Philip N.1997a. Rules and illusions: A critical study of Rips's “The Psychology of Proof.” Minds and Machines 7: 3, 387 407.Google Scholar
Johnson-Laird Philip N.1997b. An end to the controversy? A reply to Rips. Minds and Machines 7: 3, 425–32.Google Scholar
Johnson-Laird Philip N., and Ruth M. J. Byrne. 1999. Models rule, OK? A reply to Fetzer. Minds and Machines 9: 1, 111–8.Google Scholar
Jones Eric. 1981. The European Miracle: Environments, Economies, and Geopolitics in the History of Europe and Asia. Cambridge: Cambridge University Press.
Katznelson Ira, and Helen Milner, eds. 2002. Political Science: The State of the Discipline. New York: W. W. Norton.
Langlois Richard, and Metin Cosgel. 1998. The organisation of consumption. In The Active Consumer, ed. Marina Bianchi. London: Routledge, 107–21.
Levi Margaret. 1988. Of Rule and Revenue. Berkeley: University of California Press.
Lipford Jody, and Bruce Yandle. 1997. Exploring the production of social order. Constitutional Political Economy 8, 37 55.Google Scholar
Loasby Brian J.1999. Knowledge, Institutions, and Evolution in Economics. London: Routledge.
Lucas Robert E., Jr. 1988. On the mechanics of economic development. Journal of Monetary Economics 22: 1, 3 42.Google Scholar
Lucas Robert E., Jr. 1993. Making a miracle. Econometrica 61: 2, 251–72.Google Scholar
Mantzavinos C.1994. Wettbewerbstheorie (Theory of Competition). Berlin: Duncker and Humblot.
Mantzavinos C.2001. Individuals, Institutions, and Markets. Cambridge: Cambridge University Press.
March James G.1999. The Pursuit of Organizational Intelligence. Oxford: Blackwell Publishers.
Martens Bertin. 1999. The cognitive mechanics of economic development: Economic behavior as a response to uncertainty. Discussion Paper 08–99, Max Planck Institute for Research into Economic Systems.Google Scholar
McGinnis Michael D., ed. 1999a. Polycentric Governance and Development: Readings from the Workshop in Political Theory and Policy Analysis. Ann Arbor: University of Michigan Press.
McGinnis Michael D., ed. 1999b. Polycentricity and Local Public Economies: Readings from the Workshop in Political Theory and Policy Analysis. Ann Arbor: University of Michigan Press.
McGinnis Michael D., ed. 2000. Polycentric Games and Institutions: Readings from the Workshop in Political Theory and Policy Analysis. Ann Arbor: University of Michigan Press.
Nee Victor. 1998. Norms and networks in economic and organizational performance. American Economic Review (Papers and Proceedings) 88: 2, 85–9.Google Scholar
Nee Victor, and Paul Ingram. 1998. Embeddedness and beyond: Institutions, exchange, and social structure. In The New Institutionalism in Sociology, eds. Victor Nee and Mary Brinton. New York: Russell Sage Foundation, 19 45.
Nisbett Richard, and Lee Ross. 1980. Human Inference: Strategies and Shortcomings of Social Judgment. Englewood Cliffs, N.J.: Prentice Hall.
North Douglass C. 1990a. Institutions, Institutional Change, and Economic Performance. Cambridge: Cambridge University Press.
North Douglass C. 1990b. A transaction cost theory of politics. Journal of Theoretical Politics 2: 4, 355–67.Google Scholar
North Douglass C. 1994. Economic performance through time. American Economic Review 84: 3, 359–68.Google Scholar
North Douglass C. 2000. Big-bang transformations of economic systems: An introductory note. Journal of Institutional and Theoretical Economics 156: 1, 3 8.Google Scholar
Nozick Robert. 1974. Anarchy, State and Utopia. Oxford: Blackwell Publishers.
Ostrom Elinor. 1990. Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge: Cambridge University Press.
Ostrom Elinor, Roy Gardner, and James Walker. 1994. Rules, Games, and Common-Pool Resources. Ann Arbor: Michigan University Press.
Pierson Paul. 2000. Increasing returns, path dependence, and the study of politics. American Political Science Review 94: 2, 251–67.Google Scholar
Pitt David. 2002. Mental representation. In The Stanford Encyclopedia of Philosophy, ed. Edward N. Zalta. Winter 2002 edition. Available at plato.stanford.edu/archives/win2002/entries/mental-representation. Accessed 3 December 2003.
Popper Karl R.1992 [1972]. Objective Knowledge: An Evolutionary Approach, seventh impression. Oxford: Clarendon Press.
Powell Walter W., and Paul J. DiMaggio, eds. 1991. The New Institutionalism in Organizational Analysis. Chicago: University of Chicago Press.
Riker William. 1980. Implications from the disequilibrium of majority rule for the study of institutions. American Political Science Review 74: 2, 432–46.Google Scholar
Rips Lance J.1994. The Psychology of Proof: Deductive Reasoning in Human Thinking. Cambridge: MIT Press.
Rips Lance J.1997. Goals For A Theory Of Deduction: Reply To Johnson-Laird. Minds and Machines, 7: 3, 409–24.Google Scholar
Romer Paul. 1986. Increasing returns and long-run growth. Journal of Political Economy 94: 5, 1,002–37.Google Scholar
Rips Lance J.1993. Idea gaps and object gaps in economic development. Journal of Monetary Economics 32: 3, 534–73.Google Scholar
Rips Lance J.1994. The origins of endogenous growth. Journal of Economic Perspectives 8: 1, 3 22.Google Scholar
Rosenberg Nathan. 1994. Exploring the Black Box: Technology, Economics, and History. New York: Cambridge University Press.
Ryle Gilbert. 1949. The Concept of Mind. London: Penguin Books.
Weber Max. 1972 [1922]. Wirtschaft und Gesellschaft. 5th ed. Tübingen: J. C. B. Mohr (Paul Siebeck).
Wright Gavin. 1997. Towards a more historical approach to technological change. The Economic Journal 107: 444, 1,560–6.Google Scholar