Interests versus culture in the theory of institutional change?

Abstract

In Douglass C. North's works on institutional change, his focus shifted from formal institutions and highly rational actors to the links between culture, cognition, and the evolution of institutions. This has led to a corresponding shift in his basic explanation of institutional change: In his earlier works, institutional change is mainly caused by actions of highly rational utility-maximizing political actors. In his later works, the evolution of a society's institutions is above all a function of changes in the dominant belief system. The paper tries to contribute to the obvious task of bringing these two explanations of institutional change together. My synthetic approach rests basically on a Northian framework supplemented with three further elements: firstly, with the idea of the transfer of institutions; secondly, with the concept of functional differentiation; and, thirdly, and decisively, with an understanding of culture as a toolkit, leaving room for interest, choice, and strategic action.