This paper compares some recent theoretical approaches to conceptualizing institutional change, in an effort to clarify areas of consensus and disagreement regarding the causes, process, and outcomes of institutional change. We do not attempt to build a “new” theory, and our survey is not intended to be comprehensive. Among the theories we discuss, some emphasize spontaneous evolutionary proces...

This paper analyzes the impact of international trade on the quality of institutions, such as contract enforcement, property rights, or investor protection. It presents a model in which institutional differences play two roles: they create rents for some parties within the economy, and they are a source of comparative advantage in trade. Institutional quality is determined as an equilibrium of ...

A parsimonious set of mechanisms explains how and under which conditions behavioral deviations build into cascades that reshape institutional frameworks from the bottom up, even if institutional innovations initially conflict with the legally codified rules of the game. Specifically, we argue that this type of endogenous institutional change emerges from an interplay between three factors: the ...