Putting Path Dependence in its Place: Toward a Taxonomy of Institutional Change

Abstract

Stalled progress on explaining institutional change is, in part, the result of two conceptual challenges that hinder effective theory building: concept stretching and concept proliferation. These problems affect a hallmark concept of institutional change, path dependence, whose usefulness has been curtailed by the variety of meanings attributed to it. This article seeks to remedy concept stretching and proliferation by developing a taxonomy of institutional change explanations. Starting with the core attributes of path dependence, increasing returns and endogeneity, we use the procedure of “negative identification” to derive a logically complete set of possible change explanations. The result is a taxonomy in which the scope of path dependence is delimited vis-à-vis other change explanations. We illustrate the usefulness of the taxonomy by assessing stretching in the literature.

Keywords: path dependence, institutional change, concept formation, endogenous change, increasing returns