7.2 State of the art
Much has been written about institutional change in public administration, business administration, political science and management and organisation sciences, among others. Literature has accelerated after the so-called institutional "battle" in the early 1990s. Since then, various schools have emerged within disciplines that specifically highlight the role of institutions. These efforts have led to significant strides in developing methods to encompass institutional change over the past three decades.
The traditional approach is mainly based on an exogenous perspective. It pays attention to the way in which institutions should be designed, with the underlying assumption that there is a central and benevolent actor together with a (usually rational) society that will follow the imposed rules. The emphasis is therefore on designing institutions that guarantee the most favorable outcomes - getting the institutions right is a common motto here. Recently, much attention has also been paid to other forms of institutional change. Think of transitions in which social groups emerge as institutional entrepreneurs, challenge existing arrangements, and are sometimes so successful that, over time, they force institutional change. Existing ways of governance are therefore also subject to change. In addition to traditional forms of hierarchy and markets, more and more attention is being paid to networks as an alternative way of governance. Network governance rests on the mutual relationships and trust of actors, which is often also reflected in the governance mechanisms of transitions and innovations.
These developments, often technical and social in nature, have resulted in increasing complexity in the institutional environment. This has not gone unnoticed in the institutional literature. On the one hand, it has led to conventional methodology falling short in explanatory power and applicability. On the other hand, it has accelerated the development of new KEMs. Since we are mainly interested in the latter, below is an anthology of recent state-of-the-art methods that seek to encompass and explain current institutional changes. We distinguish between methods of emergence and design, which respectively approach the endogenous and exogenous processes of institutional change.
Emergence methodology of institutional change Today, most institutions share the view that institutional blueprints or transplantation - the one-to-one copying of institutional arrangements - is a subordinate method of institutional change. People increasingly speak of polycentric governance or institutional bricolage to indicate the time and space-dependent diversity of institutional arrangements, which often manifest themselves autonomously at the micro level. This includes methodology aimed at the emergence processes of institutional change.
Many of these methods and approaches are inspired by and build on the work of Nobel Prize laureate Elinor Ostrom. Her groundbreaking research into the possibilities of governance of socio-ecological systems has shown that local actors are able to regulate the use of natural resources (the commons) without this leading to depletion. This has sparked interest in alternative (non-private or public) forms of governance, such as informal, hybrid, and self-governing forms of governance. To cover this diversity, Ostrom has designed the Institutional Analysis and Development (IAD) framework which can be applied at different interaction levels (Ostrom, 2005). Within the action arena, the relevant rules, biophysical attributes and properties of the users are then examined. There is also growing interest in the question to what extent Ostrom's (2009) Socio-Ecological Systems (SES) framework can be applied to socio-technical systems.
Besides diversity, the inclusion of institutional dynamics is also an important contribution of emergence methodology. ‘Institutions are products of the past’ is a well-known statement by the founder of institutional economics, Thorstein Veblen. With this he believed that institutions are always hopelessly behind their (technology-fueled) changing environment. We now know that successful institutional change seldom proceeds through exogenous shocks or metamorphoses, but is actually evolutionary and incremental. This is something that has been covered extensively by supporters of historical institutionalism. For example, Mahoney and Thelen (2010) have developed a new framework for incremental institutional change. With a look at the origins and history of institutions, it contributes to answers to fundamental questions about how and why institutions often change in stages. In addition, it can help to explain discrepancies (between the intentions and outcomes of institutional change) by looking at endogenous processes, such as information skew and power relations.
Another important method for approaching institutional dynamics is process tracing (Collier, 2011). This is an in-depth method that can be applied to detect causal mechanisms and how they play out within a concrete case. Detailed knowledge is gained by collecting mechanistic evidence within the case, which then provides insight into how causal processes take place in reality. Although process tracing is applied to a single case, comparative research can reveal similar mechanisms. This is closely related to comparative institutional analysis (Morgan et al., 2010). This framework can be used to learn from institutions and practices in other domains, regions or countries.
Finally, emergence methodology is increasingly paying attention to the role of underlying cognitive and psychological processes. Institutional logics is a popular method here (Thornton et al., 2015). An institutional logic is the collection of symbolic systems, such as assumptions, values, and beliefs, by which individuals and organisations give meaning to their daily activities. For example, it can explain why locally-driven transitions often gain social support.
Design methodology for institutional change The increasing degree of institutional diversity and dynamics has made the design of institutions more complex. Functional approaches that only look at organisational forms and formal rules often seem to fall short. In the need to expand our view, design methodology plays an important role in supporting policy makers in the design (design) and evaluation (assessment) of institutional change.
Institutional design focuses specifically on the design and redesign of formal institutions that should lead to desired effects (Alexander, 2005). This includes strategies for institutional design, in which knowledge about the nature and diversity of institutional rules that guide the behaviour of actors within policy networks is used to influence network rules. The design approach as applied by Waardenburg et al. (2020) offers a design approach specific to collaborative governance forms, including small-scale experimentation and co-creation of innovative solutions, that fit the dynamics and uncertainty of contemporary societal challenges.
Evaluation tools can further improve institutional design. For example, the Framework for analysing leadership functions, task and strategies (Meijerink & Stiller, 2013) can be used to make an assessment of various forms of leadership in interorganisational networks. This tool distinguishes five important leadership positions that must be fulfilled in order to achieve transitions. Closely related is the Adaptive Capacity Wheel (Gupta et al., 2010), an assessment tool developed in the Knowledge for Climate research programme to assess the adaptive capacity of institutions. It can demonstrate the strengths of existing institutions, as well as indicate where adjustments are needed. Besides the use of independent assessments of researchers, the tool can also be used to allow practitioners to reflect on the institutional context in which they operate. This coincides with process management (de Bruijn et al., 2010), as part of which a variety of strategies can be deployed to get actors moving and to bring about change in institutions. For technological change, the technology assessment offers an interactive and communicative method to arrive at a public opinion about the desirability and the manner of institutionalisation of new technologies (Van Est & Brom, 2012).
Finally, we see that new principles and ways of design methodology are also emerging within governments. Contemporary policy, for example, relies less on cost-benefit analysis, but is increasingly based on ethical, environmental and social interests. Vision Zero is exemplary, a Swedish policy approach that is based on an ethical principle that every road death is socially unacceptable (Johansson, 2009). As a result of this programme, a series of technological, institutional and behavioural measures have been taken that have significantly reduced the number of road deaths in Sweden. The Vision Zero principle is now being applied in other countries and in various domains, such as in healthcare and environmental policy. At the same time, new policy instruments are also being designed that can move with social change. An example is the Right to Challenge (RTC), which originated in England. Nowadays this is also used in the Netherlands (Ministry of Economic Affairs, 2016). With a focus on the participatory society, RTC gives social groups the legal possibility to realise or even adopt the goals of a legal regulation in an alternative way. This example shows that governments are prepared to allow the opportunities for innovation to outweigh additional regulatory burdens and uncertainty.