Institutional Change in the Context of Social Values and Interest Groups

Abstract

This paper is an attempt to analyze institutional change in the economy synthesizing the original and new methodologies of institutional economics. The concepts of social values, interest groups, and social capital are applied in this context in order to create a theoretical framework based on a qualitative study of evolutionary dynamics of various economic orders. Researching social values and actions of interest groups, the author underscores manifold behavioral dimensions associated with the given behavioral pattern formation and habits. The long-run evolutionary vector of development of institutions and economic systems is determined by the values supported by the prevailing economic order – either ceremonial or instrumental. Analyzing the phenomenon of ceremonial dominance facilitates devising the measures of economic and social policy aimed to enhance the quality of human and social capital.

Keywords: institutional economics; institutional change; social capital; social values; interest groups

JEL Classification: B52, A13, Z18