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Douglass North and the Institutional Matrix

While both Ostrom's and Lukes's new institutionalist conceptualizations of power can be easily abstracted from any particular situation, some institutional political economists embed conceptualizations of power within historically contingent contexts that are difficult to account for in quantitative approaches. For example, Douglass North (1990), the economic historian, asked why the economies of some countries performed better than others, and why those countries that fared worse did not simply adopt institutions that enhanced performance. The answer, according to North, is a set of institutions that resists change via a variety of structural and active processes. The most commonly cited process is increasing returns, wherein institutions generate a positive feedback process that favors movement in the same direction of prior decisions by virtue of some combination of benefit flows and increasing exit costs (Pierson 2000; Arthur 1989). Power enters the discussion of increasing returns when institutions privilege some members of a group or society with a greater share of the benefits and greater institutional control that enhances their ability to bargain in collective-choice settings. Pierson (2000) draws upon the community power debate and Lukes (2005) to discuss how, over time, increasing returns processes may transform power from an overt expression of wills to a latent and then hidden conflict as the institutional matrix reinforces itself:

Increasing returns processes can transform a situation of relatively balanced conflict, in which one set of actors must openly impose its preferences on another set (“the first face of power”), into one in which power relations become so uneven that anticipated reactions (“the second face of power”) and ideological manipulation (“the third face”) make open political conflict unnecessary. Thus, positive feedback over time simultaneously increases power asymmetries and renders power relations less visible. (Pierson 2000, p. 259)

These path-dependent processes suggest that the greatest indicator of power may not be found in individual institutions or their simple interactions but rather in the continuity of a particular form of organization to manage transactions or resolve a policy problem. Pierson (1996), for instance, discusses how, once the welfare state has been established in democracies, it tends to persist because it generates a set of incentives that make change particularly costly for politicians. North (1990), in a more negative light, suggests that the lack of economic development in some countries is the result of inefficient forms of economic organization that persist because those that have invested in that form of organization generate increasing returns and greater bargaining power to ensure its continuity. In any case, both point to the time dimensions or historicity of institutions as an important indicator of their power.

Path-dependent forms of power bound up in institutional matrices are perhaps the most abstract of our definitions of power. We classify path-dependent power in terms of a user group's history of use (A3), although we recognize that this attribute relates to several potentially influential dimensions of use. Nonetheless, we assume that the longer a group has existed in a recognizable form using a particular resource, the more likely they will have built up a set of institutions, or an institutional matrix that creates power for the group against other groups and the state. In contrast, a user group that lacks power is unlikely to be able to maintain a recognizable form, and would instead be characterized by the formation and decay of different groups in the same geographical area. This follows North's argument that the persistence of organizations (i.e., formal and informal groups) in a given environment is tied to their bargaining power. Thus, power can be measured indirectly by considering the length of time that a group has been organized in a recognizable form. This classification was fairly easy to operate with the IFRI database, which allows us to measure the approximate age of the user group that participates in rule-making processes. The results show that this path-dependent form of institutional power is associated with positive social-ecological outcomes (Table 6.2).

 
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