Mental Models and Institutional Inertia

Abstract

Institutional inertia as one of the underlying reasons for hysteresis is often ascribed to external factors such as the distribution of wealth and income. Complementing these findings, the paper focuses on important internal factors, which render institutions stable and which prevent fast institutional changes, namely the role of mental models. Their importance is derived from the analysis of an important set of institutions, which can be described as enabling rules. Such rules enable actors to do certain things, such as speaking a language or playing chess. In doing so, enabling rules arguably require complementary mental models, which contain not only knowledge about the rules and the context in which they are applied, but also about how to apply the rules successfully. An important implication of this conceptualisation is that institutions and their representation are interdependent and mutually stabilising.