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Abstract
Contributors to this volume attempt to fashion an endogenous theory of institutional change. The main conceptual vehicle is the incomplete contract. Starting with the assumption that the various treaties of the European Union are contracts (agreements among states), contributors look to the ways in which ambiguities and gaps in these contracts, along with different interests among the institutional actors, create dynamic pressures for change. Differences between designing actors and implementing actors create part of the tension motivating institutional change. This article clarifies the requisite logic of an endogenous theory of institutional change and points to obstacles that need to be overcome for success.
Acknowledgement
This article has benefited from insightful comments by Joseph Jupille.
Notes
1. To see just how different the focus of the current volume is from neofunctionalism, see the special issue of Journal of European Public Policy, Börzel (Citation2005).
2. The editors and contributors for the most part take all three (gaps, ambiguities and uncertainty) as examples of incompleteness and do not attempt to differentiate them to a considerable extent for theoretical purposes.
3. Actually, I think there are three separate concepts at issue: incompleteness, ambiguity and the unknown (risk and uncertainty). The first two are dealt with nicely in this volume while the third is largely ignored. Moury's article (Citation2007) on the right of the Parliament to appoint and invest the Commission provides a good treatment of the differences between ambiguity and incompleteness.
4. I do not think that both the first and the third condition are needed. The cost to each institutional actor of non-agreement is the crucial thing and this already captures the courses of action available. In a sense, the first and the third determinants of bargaining power are redundant.
5. In this section, I find it helpful to proceed by asking about the properties of a purely endogenous theory of institutional change. While the contributors to this volume recognise both endogenous and exogenous elements of change, one can understand the analytics of endogenous theories by pushing their logic to the limit. By doing this, I hope to show the dependencies between endogenous and exogenous sources of change.
6. This is a standard assumption when trying to demonstrate causality. If x is to be shown as a cause of y, then all other variables must be ruled out. Closure can be demonstrated by random assignment in experiments, by case selection to rule out variance (selecting common cases on ‘third’ variables), and by statistical controls such as partial correlations. See Blalock (Citation1967).
7. As Joseph Jupille pointed out to me (personal communication), it is important to recognise among whom this equilibrium exists. It exists for the member states, not necessarily for the institutional actors in the EU. However, I would argue that to the extent that member states ‘get the institutions right’, i.e. to the extent the institutions reflect the interests of the member states, the equilibrium carries over to the institutions.
8. For example, capital could become scarcer and more expensive as a result of capital-intensive production. Consumption preferences could change in favour of services rather than goods as a result of economic growth. Such changes are endogenous since they flow from the operation of the basic economic model.
9. It is possible for a gap to exist, and to be recognised, but to have no theoretical implication. This absence of theoretical implication could be due to lack of a causal relationship between gaps and institutional change in the ‘real’ world or to the analyst's failure to grasp it.
10. ‘Built-in flexibility’ is not a contradiction in terms. The March and Simon book, Organizations (Citation1958) stresses that complex organisations are compromises between highly programmed and non-programmed activities.
11. Few would dispute this proposition. However, this is not the problem addressed by the papers in this volume. The question asked here is ‘given an institution in place, to what extent (and how, under what circumstances) can characteristics of that institution generate further institutional change? It is true that a ‘turtles all the way down’ answer can be given to the question of what existed (by way of rules) before the institution in question. Some prior version of rules, however informal or un-codified, would be the answer, as in ‘institutions all the way down’.
12. Institutions may also come into existence for expressive purposes – a dance group or rugby club – but this does not alter what I am saying.