Evolution in Economic Geography: Institutions, Political Economy, and Adaptation

Abstract

Economic geography has, over the past decade or so, drawn upon ideas from evolutionary economics in trying to understand processes of regional growth and change. Recently, some researchers have sought to delimit and develop an “evolutionary economic geography” (EEG), aiming to create a more systematic theoretical framework for research. This article provides a sympathetic critique and elaboration of this emergent EEG but takes issue with some aspects of its characterization in recent programmatic statements. While acknowledging that EEG is an evolving and pluralist project, we are concerned that the reliance on certain theoretical frameworks that are imported from evolutionary economics and complexity science threatens to isolate it from other approaches in economic geography, limiting the opportunities for cross-fertilization. In response, the article seeks to develop a social and pluralist conception of institutions and social agency in EEG, drawing upon the writings of leading institutional economists, and to link evolutionary concepts to political economy approaches, arguing that the evolution of the economic landscape must be related to processes of capital accumulation and uneven development. As such, we favor the use of evolutionary and institutional concepts within a geographical political economy approach, rather than the construction of some kind of theoretically separate EEG—evolution in economic geography, not an evolutionary economic geography.

Key Words:

• evolution
• institutions
• political economy
• path dependence
• regional adaptation

Acknowledgments

An earlier version of this article was presented at the Regional Studies Association International Conference, Lisbon, Portugal, 2–5 April 2007. We are grateful to Keith Chapman, Gernot Grabher, and three anonymous reviewers for their detailed and constructive comments on previous versions of this article. The usual disclaimers apply.

Notes

1 We prefer the term adaptation to adjustment since it emphasizes the different ways in which economic actors and organizations respond to changing circumstances, reflecting heterodox notions of complexity, diversity, and variety (cf. Grabher and Stark 1997). Adjustment, in contrast, is more reflective of orthodox economic notions of convergence to an equilibrium or movement from one equilibrium solution to another (see Krugman and Venables 1996).

2 North’s earlier analysis stressed that the emergence and persistence of institutions was primarily due to perceived efficiency advantages. Since the mid-1990s, however, North’s position has shifted substantially in that North now recognizes the persistence of inefficiencies and acknowledges that power plays an extensive role in institutional durability. Nevertheless, his underlying stance remains methodologically individualistic.

3 Although seemingly reminiscent of the sociological concept of structuration (see Giddens 1984), this formulation is distinguished by its adoption of a stratified ontology and its avoidance of the central conflation of structure and agency that characterizes structuration theory (Archer 1995; Hodgson 2004).

4 Veblen (1969 [1919]) noted “institutional furnitures” as well as specific institutions.

5 This emphasis on microscale actors and processes is also a defining characteristic of relational economic geography (Sunley 2008), although the latter is more concerned with the relational networks in which firms are embedded than with their internal learning processes.

6 Although Nelson and Winter recognized the role of organizational routines as “truces” that regulate conflict between actors within a firm, this dimension is heavily outweighed by their emphasis on the cognitive function of routines as sources of organizational memory and learning.

7 As the recent history of Silicon Valley in California attests, however, such regional crucibles of technological innovation are often highly vulnerable to the effects of cyclical downturns (see Walker 2006).

8 To paraphrase Johnston’s (1991) comments on regional geography.