Read the summary and the most important questions on Notes on Institutional Context

• 6 Introduction

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• What are 2 types of institutions according to Douglas North

  1. Formal institutions: explicit rules
  2. Informal institutions: tacit understanding

• 3 institutional pillars from Richard Scott

  1. Regulatory institutions: formal, e.g. laws
  2. Normative institutions: informal, e.g. shared expectations, informal obligations
  3. Cognitive institutions: informal, e.g. deeply ingrained worldview

• 4 situations when we see institutions

  1. Violations to institutions 
  2. Entering a foreign institutional context
  3. When change occurs
  4. Through analysis

• What are the 3 perspectives on institutions?

  1. Functional perspective: institutions create order and reduce uncertainty to help stabilise transactions (institutional economists)
  2. Neoinstitutionalism: institutions define social legitimacy, explain why we behave the way we do (sociologists)
  3. power perspective: institutions define the political landscape (political scientists)

• When is cooperation among players likely (game theory)?

  1. game is repeated often
  2. complete information
  3. small number of players

• 3 types of institutional isomorphism

  1. Coercive isomorphism: state and government mandate 
  2. Normative isomorphism: normative professional pressures
  3. Mimetic isomorphism: imitation of others because of uncertainty

• Instrumental rationality assumption

  Macroeconomical view, only the most efficient model persists.

• 7 Institutions at different levels

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• Differences between the triad in financing

  State; taxes, tariffs
  market; stocks, loans, profits
  civil society: donations, services

• Differences between the triad in coordination

  State: corrective
  market: competitive
  civil society: cooperative

• Differences between the triad in weaknesses

  State: bureacratic/rigid
  market: imperfect markets
  civil society: fragmanted