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The New Institutionalism:
OrganizationalFactors in Political Life
JAMESG. MARCH
StanfordUniversity
JOHANP. OLSEN
Universityof Bergen
734
1984 Organizational Factors in Political Life 735
(Geertz, 1980), as well as in a renewed interest in social stratificationof a modern society with its
making historical-comparative studies of the state associateddistributionof wealth and income has
(Evans, Rueschemeyer, & Skocpol, 1983; obvious major effects on political events. Class
Hayward & Berki, 1979; Krasner, in press). differencestranslateinto politicaldifferenceswith
In this article we examine some aspects of these great reliabilityacross time and across cultures;
developments and their implications for develop- differencesin the organizationand ideology of
ing a theoretical understanding of how political social classseemto lead to predictabledifferences
life is organized. We approach the task from the in political organizationand institutions(Tilly,
perspective of students of formal organizations. 1978).Otheranalysesat the samelevelof aggrega-
The argument, however, extends beyond organi- tion make the structureand processof politics a
zation theory to a more general view of the place functionof physicalenvironment,geography,and
of institutions in politics and the possibilities for a climate; of ethnicity, language, and culture; of
political theory that is attentive to them. economic conditions and development; or of
demography,technology, ideology, or religion.
Theoretical Styles of Contemporary Plausible argumentswhich make political life a
Political Science derivativeof one or more of these broad con-
textual forces have been developed,and it is not
Although the concept of institution has never hard to find empirical data to support the
disappeared from theoretical political science, the arguments. Although there are a number of
basic vision that has characterized theories of relativelyprecise contextual theories, the major
politics since about 1950 is (a) contextual, inclined theoretical significanceof these ideas from the
to see politics as an integral part of society, less in- presentpoint of view is less the specificforms of
clined to differentiate the polity from the rest of the theories than their generalinclinationto see
society; (b) reductionist, inclined to see political the causallinksbetweensocietyand polity as run-
phenomena as the aggregate consequences of in- ning from the formerto the latter,ratherthan the
dividual behavior, less inclined to ascribe the out- other way around. It is assumedthat class, geog-
comes of politics to organizational structures and raphy, climate, ethnicity, language, culture,
rules of appropriate behavior; (c) utilitarian, in- economic conditions, demography,technology,
clined to see action as the product of calculated ideology, and religion all affect politics but are
self-interest, less inclined to see political actors as not significantlyaffected by politics.
responding to obligations and duties; (d) func-
tionalist, inclined to see history as an efficient The Macro Consequencesof Micro Behavior:
mechanism for reaching uniquely appropriate Reductionism
equilibria, less concerned with the possibilities for
maladaptation and non-uniqueness in historical Historically,political theory has treatedpoliti-
development; and (e) instrumentalist, inclined to cal institutionsas determining,ordering,or modi-
define decision making and the allocation of fying individualmotives, and as acting autono-
resources as the central concerns of political life, mously in terms of institutionalneeds. In con-
less attentive to the ways in which political life is trast, substantialelementsof modern theoretical
organized around the development of meaning workin politicalscienceassumethat politicalphe-
through symbols, rituals, and ceremonies. nomenaare best understoodas the aggregatecon-
sequencesof behaviorcomprehensibleat the in-
Politics as Subordinate to Exogenous Forces: dividualor group level.
Contextualism Such theories depend on two presumptions.
The first presumptionis that a political system
Historically, political scientists and political consists of a number(often a large number)of
philosophers have tended to treat political institu- elementaryactors.Humanbehaviorat the levelof
tions, particularly the state, as independent fac- these elementaryactorsmay be seen as conscious,
tors, important to the ordering and understanding calculated, and flexible, or as unconscious,
of collective life (Heller, 1933). Modern political habitual,and rigid. In eithercase, the preferences
scientists, with few exceptions, have not. The and powers of the actors are exogenous to the
state has lost its position of centrality in the political system, dependingon their positions in
discipline; interest in comprehensive forms of the social and economic system. The second
political organization has declined; political presumptionis that collective behavior is best
events are defined more as epiphenomena than as understoodas stemming from the (possibly in-
actions necessary to an understanding of society; tricate)interweavingof behaviorunderstandable
politics mirrors its context (Easton, 1968). at a lower level of aggregation.Discovering,or
The most conspicuous contextual factor cited in deducing,the collectiveconsequencesmay be dif-
recent writing is the social class structure. The ficult, evenimpossible;but the centralfaithis that
736 The American Political Science Review Vol. 78
outcomes at the collective level depend only on competition. Within this theory we find individual
the intricacies of the interactions among the in- species, each adapting to an environment through
dividual actors, that concepts suggesting autono- survival, mutation, and reproduction. Selection
mous behavior at the aggregate level are certainly and changes in population distributions within the
superfluous and probably deleterious. environment are assumed to be understandable as
Within such a perspective, for example, the consequences of the actions of individual actors
behavior of an organization is the consequence of that, in combination with the actions of others
the interlocking choices by individuals and sub- and the potential capacity of the environment,
units, each acting in terms of expectations and produce a distribution of types.
preferences manifested at those levels (Niskanen,
1971). The behavior of a market is the conse- Action as the Making of Calculated Decisions:
quence of the interlocking choices by individuals Utilitarianism
and firms, each acting in terms of a set of expecta-
tions and preferences manifested at those levels Historically, political science has emphasized
(Stigler, 1952). It is not necessary that the micro the ways in which political behavior was embed-
processes involve choice, of course. Aggregate ded in an institutional structure of rules, norms,
behavior in a group can be defined as the conse- expectations, and traditions that severely limited
quence of the interlocking of trial-and-error learn- the free play of individual will and calculation
ing occurring at the individual level (Lave & (Wolin, 1960). In contrast, modern political sci-
March, 1975). Or the aggregate behavior of an in- ence has, for the most part, described political
dustry can be defined as the consequence of the events as the consequence of calculated decisions.
interlocking of standard operating procedures and Not just in political science, but throughout mod-
accounting rules followed at the level of the in- ern theoretical work in the social sciences, the pre-
dividual firm (Nelson & Winter, 1982). eminent vision of human behavior is a vision of
There is nothing intrinsic to a perspective that choice. Life is characterized as deliberate decision
emphasizes the macro consequences of micro ac- making.
tions which requires that the elementary units be The details of the choice metaphor vary from
individuals. All that is required is that the one treatment to another, but the characteristic
behavior of a more comprehensive system be form is one that assumes choices stem from two
decomposable to elementary behaviors explicable guesses about the future. The first is a guess about
at a less comprehensive level. In practice, the uncertain future consequences of possible cur-
however, in most of the social sciences, the ac- rent action. Decision theorists recognize that
tions of individual human beings are considered human limitations may restrict the precision of
to determine the flow of events in a larger social the estimates, that the estimates may be biased,
system. Outcomes at the system level are thought and that the information on which the estimates
to be determined by the interactions of individuals are based may be costly; but information about
acting consistently in terms of the axioms of in- probable consequences is assumed to be impor-
dividual behavior, whatever they may be. Thus, tant to a choice. From this assumption comes an
we make assumptions about individual consumers emphasis on the power of information and exper-
to understand markets, about voters to under- tise (Crozier, 1964) and the importance of reliable
stand politics, and about bureaucrats to under- and unbiased information sources (Nisbet & Ross,
stand bureaucracies. 1980). Although numerous psychological experi-
The two best-specified theories of aggregate ments have indicated that the guesses of human
behavior in the social sciences, the economic subjects are biased (Kahneman, Slovic, & Tver-
theory of markets and the ecological theory of en- sky, 1982), it has not been easy to formulate alter-
vironmental competition, exemplify the modern natives to the simple notion that the guesses of ex-
style. Consider the theory of markets. Within this perienced humans are, on average, accurate. As a
theory we find individual consumers, each at- result, most theories of choice present decisions as
tempting to make purchases at the best possible being, on average, sensible. In their political ver-
prices considering his or her own preferences and sions, choice theories assume that, on average,
alternatives, and individual producers, each at- voters vote intelligently with respect to their in-
tempting to make production and pricing deci- terests; legislators organize sensible coalitions,
sions that result in the best possible return con- given their interests; and nation states voluntarily
sidering his or her own preferences and alter- enter alliances that, on average, improve theii
natives. The behavior of the market is assumed to positions.
be understandable as a consequence of these in- The second guess on which intentional, antic
dividual actors making choices that, in aggregate, ipatory choice is based is a guess about a decision
fit together into market phenomena. Consider maker's uncertain future preferences for possible
similarly the ecological theory of environmental future outcomes. In any theory of deliberate
1984 Organizational Factors in Political Life 737
choice, action depends on the decision maker's ciency is a standard, although usually not explicit,
values. Since the consequences of interest are to assumption of much of modern social science.
be realized in the future, it is necessary to an- Economic theories of markets and ecological
ticipate not only what will happen but how the theories of competition, for example, are con-
decision maker will feel about those outcomes cerned with the characteristics of an equilibrium,
when they are experienced (March, 1978). The if one exists. They are used to predict differences
compexities of the second guess are largely ig- (e.g., in markets, organizational structures,
nored by theories of choice. In their standard population, technologies) that will be observed, at
forms, the theories assume that preferences are equilibrium, in different environments. Similarly,
stable, thus that current preferences are good some postwar theories of political parties see
predictors of future preferences; that preferences party orientation and organization as equilibrium
are unambiguous and consistent, thus that a solutions to problems of survival in a competitive
choice will be clearly indicated, given the first political environment (Downs, 1957). The as-
guess; and that preferences are exogenous, thus sumption of historical efficiency makes such
that whatever process generates preferences, it theories largely indifferent to the behavioral real-
precedes choice and is independent of the choice ity of the micro processes that are assumed. For
process. In one of the best-developed forms of example, competition can be assumed to eliminate
choice theories, these assumptions about prefer- action that is inconsistent with the logic of sur-
ences are taken as axioms, and preferences are vival. Examples include theories of market
discovered not by asking decision makers to equilibria, such as those found in recent ideas of
report them but by defining a "revealed prefer- efficient capital markets (Sharpe, 1970); theories
ence" function that satisfies the axioms and is of organizational structure, such as those found in
consistent with choices made by a decision maker recent ideas of industrial organization (William-
(Luce & Raiffa, 1957). Although the empirical ex- son, 1978); and theories of political parties, such
istence of consistent revealed preferences has been as those found in ideas of political economy
the subject of considerable debate (Becker & (Olson, 1965).
Stigler, 1977; Kahneman, Slovic, & Tversky, History cannot be guaranteed to be efficient.
1982), the theoretical idea forms the basis of ex- An equilibrium may not exist. Even if there is an
tensive analytical development and empirical ex- equilibrium, historical processes can easily be
ploration. slow enough relative to the rate of change in the
environment that the equilibrium of the process is
The Efficiency of History: Functionalism unlikely to be achieved before the environment,
and thus the equilibrium, changes. By assuming
Historically, political theory has been am- quickness, theories of political behavior avoid
bivalent about the efficiency of history. Like focusing on transient phenomena that might be
other social scientists, students of political less predictable and more subject to effects from
development have been inclined to accept an idea the details of the processes involved. For example,
of progress, the more or less inexorable historical when it is predicted that political parties will come
movement toward some more "advanced" level. to identical positions in an environment of single-
At the same time, political histories have often peaked voter preferences, it is assumed that party
emphasized the unique significance of a particular adjustment will be much more rapid than will be
sequence of events or choices, the impact of a par- changes in voter preferences. Efficiency also re-
ticular campaign strategy or speech, or the par- quires that the equilibrium be unique and achiev-
ticular tactics of international negotiation. In able. Processes with multiple equilibria are, of
modern usage, the terminology of progress has course, easily specified and frequently observed.
been largely replaced by a terminology of sur- What makes them unattractive is not their rarity,
vival, but for the most part, in contemporary but their intractability and the indeterminacy of
theoretical political science, institutions and their outcomes. It is no accident that the most
behavior are thought to evolve through some common principle of theories in the social sciences
form of efficient historical process. is the optimization principle, and that one of the
An efficient historical process, in these terms, is greatest concerns in such theories is showing that
one that moves rapidly to a unique solution, con- a process has a unique optimum that is guaranteed
ditional on current environmental conditions, to be achieved.
thus independent of the historical path. The
equilibrium may involve a stochastically stable The Primacy of Outcomes: Instrumentalism
distribution or a fixed point, but we require a
solution that is achieved relatively rapidly and is Historically, theories of political institutions
independent of the details of historical events portrayed political decision making primarily as a
leading to it. The assumption of historical effi- process for developing a sense of purpose, direc-
738 The AmericanPolitical ScienceReview Vol. 78
tion, identity, and belonging. Politics was a ve- back to considerationsthat typifiedearlierforms
hiclefor educatingcitizensand improvingcultural of theoryin politicalscience.We do not mean to
values. Although there are exceptions, the suggest, however, that the new and the old are
modern perspective in political science has identical.It would probablybe more accurateto
generallygivenprimacyto outcomesand eitherig- describerecent thinkingas blendingelementsof
noredsymbolicactionsor seen symbolsas part of an old institutionalisminto the non-institution-
manipulativeefforts to control outcomes, rather alist styles of recenttheoriesof politics.
than the other way around. This new institutionalismcan be presentedand
Modern polities are as replete with symbols, discussed as an epistemologicalperspective of
ritual, ceremony, and myth as the societies profound importance to understandingsocial
morefamiliarto anthropologicaltradition.Politi- science,but for our purposes,it is moreuseful to
cians announcepublic supportfor positionsthey define it in terms of a narrow collection of
fail to defend in private(Edelman, 1964). Legis- challengesto contemporarytheoreticalthinkingin
lators vote for legislationwhile remainingindif- politicalscience,a smallset of relativelytechnical
ferentto its implementation(Pressman& Wildav- ideas of primaryinterestto professionalstudents
sky, 1973). Administratorssolicit public par- of political life. The ideas deemphasize the
ticipation in decision making in order to secure dependenceof the polity on societyin favorof an
public support for policies to which they are interdependencebetween relativelyautonomous
already committed. Chief executives advocate social and politicalinstitutions;they deemphasize
reorganizationof the public bureaucracy,an- the simple primacyof micro processesand effi-
nounce plans for making reorganizations,and cient historiesin favor of relativelycomplexpro-
regularlyabandon the plans (March & Olsen, cesses and historicalinefficiency;they deempha-
1983).Informationis gathered,policyalternatives size metaphorsof choice and allocativeoutcomes
are defined, and cost-benefit analyses are pur- in favorof otherlogicsof actionand the centrality
sued, but they seem more intended to reassure of meaningand symbolicaction. The ideasarenot
observersof the appropriatenessof actions being all mutually consistent. Indeed, some of them
taken than to influence the actions (Feldman& seem mutually inconsistent. For example, ideas
March, 1981). based on the assumptionthat large institutional
In modern discussionsof politics, these sym- structures (e.g., organizations, legislatures,
bolic actions are characteristicallyportrayedas states) can be portrayedas rationally coherent
strategicmoves by self-consciouspoliticalactors. autonomous actors are uneasy companions for
Rituals and ceremoniesare defined as window- ideas suggesting that political action is inade-
dressingfor the real politicalprocesses,or as in- quately described in terms of rationality and
strumentsby which the clever and the powerful choice.
exploit the naive and the weak. The hiringof ex-
perts lends legitimacy to policies (Meyer & The CausalPositionof PoliticalInstitutions
Rowan, 1977);associatingunpopularmoves with
popular symbols is reassuring(Edelman, 1964). Without denying the importanceof both the
Controloversymbolsis a basisof power,like con- social context of politics and the motives of in-
trol over otherresources(Pfeffer, 1981a);and the dividualactors, the new institutionalisminsistson
use of symbolsis part of a struggleover political a moreautonomousrole for politicalinstitutions.
outcomes(Cohen, 1974). The state is not only affected by society but also
affects it (Katzenstein, 1978; Krasner, 1978;
InstitutionalistPerspectives Nordlinger,1981;Skocpol, 1979;Stephan, 1978).
Political democracy depends not only on
The new institutionalismis not peculiar to economic and social conditions but also on the
political science. Renewedinterestin institutions design of political institutions.The bureaucratic
is characteristicof recent trends in economics, agency, the legislative committee, and the ap-
which has discoveredlaw, contracts,hierarchies, pellate court are arenas for contending social
standard operating procedures, professional forces, but they are also collectionsof standard
codes, and socialnorms(Akerlof, 1980).It is also operatingproceduresand structuresthat define
seen in anthropology and sociology, although and defend interests.They are politicalactors in
non-institutionalistvisions never succeeded in their own right.
those fields to the extentthat they did in political The argumentthat institutionscan be treatedas
scienceand economics.Nor arethe institutionalist political actors is a claim of institutional
ideas entirelynew. By labelingthe collection of coherenceand autonomy.The claimof coherence
ideas "the new institutionalism,"we mean to is necessaryin orderto treat institutionsas deci-
note the fact thattherewas indeedan "old institu- sion makers.From such a point of view, the issue
tionalism," that cycles in ideas have broughtus is whetherwe wish to picturethe state (or some
1984 OrganizationalFactorsin PoliticalLife 739
other political institution) as making choice on the fecting tastes. Similarly,conventionaltheoriesof
basis of some collective interest or intention (e.g., politics assume that a voter's exposure to and
preferences, goals, purposes), alternatives, and choice of a candidatedo not changethat voter's
expectations (Levi, 1981). There is no necessary preferencesfor variousattributesthat a candidate
answer to the question unless we impose one. mightpossess,althoughtheymaychangea voter's
Whether it makes pragmatic theoretical sense to beliefs about which candidatespossess which at-
impute interests, expectations, and the other tributes. The new institutionalism,in company
paraphernalia of coherent intelligence to an in- with most researchon preferences,argues that
stitution is neither more nor less problematic, a preferencesand meaningsdevelopin politics,as in
priori, than whether it makes sense to impute the rest of life, througha combinationof educa-
them to an individual (Kahneman, 1982; March & tion, indoctrination,and experience. They are
Shapira, 1982). The pragmatic answer appears to neitherstable nor exogenous(Cohen & Axelrod,
be that the coherence of institutions varies but is in press). If political preferences are molded
sometimes substantial enough to justify viewing a through political experiences,or by political in-
collectivity as acting coherently. stitutions, it is awkwardto have a theory that
The claim of autonomy is necessary to establish presumes preferences are exogenous to the
that political institutions are more than simple political process. And if preferencesare not ex-
mirrors of social forces. Empirical observations ogenous to the politicalprocess, it is awkwardto
seem to indicate that processes internal to political picturethe political system as strictlydependent
institutions, although possibly triggered by exter- on the society associatedwith it.
nal events, affect the flow of history. Programs The contrastbetweenthe two kinds of notions
adopted as a simple political compromise by a is found most starkly in theories of political
legislature become endowed with separate mean- leadership.One classicidea of politicalleadership
ing and force by having an agency established to emphasizesthe creationof winningpoliticalcoali-
deal with them (Skocpol & Finegold, 1982). The tions among participantswith given demands
establishment of public policies, or competition (March, 1970). The leadershiprole is that of a
among bureaucrats or legislators, activates and broker: providing information, identifyingpos-
organizes otherwise quiescent identities and social sible coalitions, and facilitating side-payments
cleavages (Olsen & Saetren, 1980; Tilly, 1978). and the developmentof logrolls. Such a view of
Policy experts within the political system develop leadershipis implicitin the theoryof the political
and shape the understanding of policy issues and process that has been developed in political
alternatives (Heclo, 1974). sciencein recentdecades.A secondconceptionof
Such phenomena are not routinely accom- leadership emphasizes the transformation of
modated by modern political theory, which makes preferences,both those of the leaderand those of
political outcomes a function of three primary the followers (Burns, 1978; Selznick, 1957).
factors: the distribution of preferences (interests) Leadersinteract with other leaders and are co-
among political actors, the distribution of opted into new beliefs and commitments.The
resources (powers), and the constraints imposed leadershiprole is that of an educator,stimulating
by the rules of the game (constitutions). Each of and accepting changing worldviews, redefining
these is treated as exogenous to the political meanings,stimulatingcommitments.Such a view
system. That is, preferences are developed within is more conspicuousin the ideas of the new in-
a society and transmitted through socialization, stitutionalism.
resources are distributed among political actors by The distributionof political resourcesis also
some broad social processes, and rules of the partlydeterminedendogenously.Politicalinstitu-
game are either stable or change by a revolu- tions affect the distributionof resources,whichin
tionary intervention exogenous to ordinary turn affects the power of political actors, and
political activities. thereby affects political institutions. Wealth,
The idea that preferences are produced and social standing,reputationfor power, knowledge
changed by a process that is exogenous to the pro- of alternatives, and attention are not easily
cesses of choice is fundamental to modern deci- describedas exogenous to the political process
sion theory. In the "revealed preference" version and politicalinstitutions.Holdingoffice provides
of the theory, preferences must be stable in order participationrightsand altersthe distributionof
for the theory to be testable. In other versions, power and access (Egeberg, 1981; Laegreid &
preferences can change, but choice itself does not Olsen, 1978). The policy alternativesof leaders
produce a change in preferences. Conventional are not defined completelyby exogenousforces,
theories of markets, for example, picture advertis- but are shapedby existingadministrativeagencies
ing and experience as providing information (Skocpol, 1980; Skocpol & Finegold, 1982;
about alternatives and their properties, not as af- Skowronek,1982).The outcomesof the political
740 The American Political Science Review Vol. 78
process modify reputations for power, which in be rash to assume that errors in expectations have
turn modify political outcomes (Enderud, 1976; a normal distribution with a mean of zero. The
March, 1966). allocation of attention may be critical to the flow
Finally, the third exogenous factor in conven- of events. The responsiveness of the political
tional theories of politics, the rules of the game, is system to environmental pressures may, at least in
not really exogenous either. Constitutions, laws, the short run, depend on the amount of slack in
contracts, and customary rules of politics make the system, and on the ways in which accounting
many potential actions or considerations il- numbers are produced and fudged. The system
legitimate or unnoticed; some alternatives are ex- may not come close to trying to resolve conflict
cluded from the agenda before politics begins but simply attend sequentially to the demands
(Bachrach & Baratz, 1962), but these constraints placed on it (Cyert & March, 1963). Learning may
are not imposed full-blown by an external social be superstitious, and fallacious rules of inference
system; they develop within the context of may persist for long periods (Nisbet & Ross,
political institutions. Public agencies create rules 1980). At the limit, the connections between prob-
and have them sanctioned by politicians (Eckhoff lems and solutions may be less dominated by a
& Jacobsen, 1960), and revolutionary changes are logic of causal linkages between means and ends
initiated and pursued by military bureaucrats than by the less problematic temporal linkages of
(Trimberger, 1978). simultaneity (Cohen, March, & Olsen, 1972).
Theories of collective behavior most commonly
The Causal Complexity of Political History simplify the potential morass of collective com-
plexity by one of two classic routes. The first is
Theories of politics tend to assume a relatively statistical aggregation. In its usual guise, aggrega-
uncomplicated intermeshing among the elemen- tion assumes that the factors affecting outcomes
tary units of a political system. There may be can be divided into two groups, one systematic
many individuals, groups, or classes involved, but and the other random. Thus, for example, we
they are relatively undifferentiated and their inter- might assume that in a population of voters there
actions are relatively simple. Empirical observa- are many factors affecting electoral choice. Some
tions of political systems, on the other hand, of those factors (e.g., income) have impacts on
often stress the institutional complexity of the vote that are strong and consistent across in-
modern states (Ashford, 1977; Scharpf, 1977) and dividuals. Other factors (e.g., specific policy
identify a rather complicated intertwining of in- issues) have impacts that are weaker or less consis-
stitutions, individuals, and events. Alternatives tent or less well understood. If we assume the lat-
are not automatically provided to a decision ter factors can be treated as noise, that is, that
maker; they have to be found. Search for alter- they are independent, randomly distributed
natives occurs in an organized context in which variables, the systematic factors will be clear in
problems are not only looking for solutions, but the aggregate results. In this way, conventional
solutions are looking for problems. Information assumptions of aggregation impose a statistical
about the consequences of alternatives is order on the results.
generated and communicated through organized The second classical simplification is the
institutions, so expectations depend on the struc- assumption of historical efficiency. Although the
ture of linkages within the system, as well as the argument is usually associated with theories of
ways in which biases and counter-biases cumulate natural selection and best specified in modern
(Simon, 1957a, b). Guesses about future pref- theories of population biology, the basic idea of
erences are developed within institutions historical efficiency is implicit in many modern
dedicated to defining and modifying values and theories. Regardless of the complexity or apparent
the meanings of actions (Cyert & March, 1963; anomalies of human behavior, historical pro-
March & Olsen, 1976). There are many such in- cesses are assumed to eliminate rules for behavior
stitutions, some nested within others, with multi- that are not solutions to an appropriate joint op-
ple, overlapping connections (Long, 1958). Na- timization problem. Thus, a prediction based on
tional political systems fit into international solving the optimization problem will correctly
political systems and are composed of numerous predict behavior, regardless of whether the actors
subsystems, some of which extend beyond na- involved formulate or solve that problem expli-
tional boundaries. citly (Friedman, 1953). For example, we might
If this complexity is not decomposable an- predict the outcome of a complicated political
alytically into smaller systems or susceptible to negotiation by assuming that the actors are each
some relatively simple aggregation techniques, the acting rationally on the basis of complete infor-
theoretical problems of understanding social mation about each other and the world, even
history are not easily accommodated within con- though we recognize that such assumptions are
temporary theoretical styles. For example, it may quite false as a description of individual behavior.
1984 Organizational Factors in Political Life 741
the insights of students of institutions. Such ing current historical events. In effect, the chance
research is institutional in two respects: First, it is fluctuations of history change the baselines of the
oriented to one or more of the institutionalist con- next step of the historical process. Common
ceptions of order; second, it tries to illuminate descriptions of incremental policy processes make
how institutional and organizational factors af- them appear to be in the nature of martingales.
fect political events. As examples, consider the The distribution of possible outcomes from a
following: policy process is pictured as resulting from com-
Example 1: Policy Martingales. Many models petition and bargaining over incremental adjust-
of history recognize that specific historical events ments in the current policy; the policy actually
involve elements of chance. The unique historical adopted is a draw from that distribution. This
happening may be a draw from some probability martingale property of policymaking is not in-
distribution of possible events. Even in cases dependent of institutional factors. Indeed, it
where chance, strictly considered, is not viewed as seems a prototypic institutional characteristic.
vital, any specific event is seen as the consequence Policies, once adopted, are embedded into institu-
of a complicated interweaving of factors impossi- tions. They are associated with rules, expecta-
ble to predict with precision in a single case. In the tions, and commitments. By affecting attention
independent trial version of such models, any and aspirations, they affect the future search
specific historical event is subject to various kinds behavior of political participants.
of random fluctuations but, in the long run, Martingales diverge more rapidly than do in-
unlikely events at a particular time are balanced dependent trial processes; that is, for a given
by different unlikely events at a subsequent time. amount of chance variation in each time period,
The specific realizations of the historical process the variance across possible outcomes after some
that comprise the events of today are independent number of periods will be substantially greater in
of the specific realizations that comprise the a martingale. As a result, the precision with which
events of yesterday. Each specific event of an un- specific realizations of the process can be an-
folding history is relatively difficult to predict, but ticipated is considerably less. Thus, policy mar-
prediction is not improved by knowledge of the tingales are related to, but not identical to,
history of past realizations of that process. various less precise ideas of forks in history, of
It is possible to see political policymaking as an critical events that made a difference. There is a
independent trial process. Suppose we think of sense in which the first step is more important
policy as the result of bargaining among political than any subsequent one, but it is a limited sense.
actors with prior preferences and resources, but In a martingale process all events are forks; the
subject to trial-by-trial variation attributable to policy paths of two political systems with identical
specific, unpredictable and uncontrollable fac- underlying political conditions will be radically
tors. Then understanding the short-run outcomes different simply because of the way in which
of a policy process would depend on considerable (possibly small) perturbations shift the focus of
detail of the specific situation. A student of in- political pressure.
stitutions might well observe that the details of the Example 2: Experiential Learning. It is a fre-
way attention is organized, how alternatives are quent observation of institutionalism that institu-
presented, what information is available, which tions accumulate historical experience through
participants are free from other demands, how in- learning. The results and inferences of past ex-
stitutional memory is consulted, and a host of perience are stored in standard operating pro-
other factors would affect the specific political cedures, professional rules, and the elementary
policy adopted at a specific time. At the same rules of thumb of a practical person. These
time, however, such factors are irrelevant (or elements of historical knowledge have been por-
redundant) to understanding the long-term mix of trayed both as forms of irrational retrogression
policies. Such an understanding is possible simply and as carriers of wisdom, and it is not hard to
from a knowledge of the underlying political pro- specify environmental situations in which either
cess and any systematic institutional biases. characterization would be appropriate. What is
Not all policymaking processes are independent less clear is whether we can model the processes of
trial processes. Many of them seem to be more in institutional learning. Although there have been
the nature of martingales (Feller, 1950). Like an some loose arguments that experiential learning
independent trial process, a martingale process is will, in the long run, lead to the discovery and
subject to chance variation, but the variations ac- adoption of optimal strategies, little theoretical
cumulate. What distinguishes a martingale is the effort has been devoted to specifying precisely the
property that the expected value of the process at conditions under which learning from experience
one time is equal to the realization of the process leads to optimal behavior, or to relating those
at the preceding time. This property makes the conditions to features of institutional structure or
specific path of history important to understand- life.
746 The AmericanPolitical ScienceReview Vol. 78
Consider the following simple model of learn- taneity, relativelyfew problemsare solved, and
ing (Levinthal & March, 1982). A decision- choices are made for the most part eitherbefore
making institution simultaneously learns along any problemsare connectedto them (oversight),
three dimensions. First it modifies its strategy; or after the problemshave abandonedone choice
that is, it changes the likelihood of making one to associatethemselveswith another(flight).This
choice rather than another among the alternative situation of extreme loose coupling, called an
activities available to it. Subjective success leads open structurein the original discussionsof the
to increasing the chance of repeating a choice; garbagecan, has attractedmost of the attentionin
subjective failure leads to decreasing the chance of the literature,and empiricalstudieshave revealed
repeating a choice (March & Olsen, 1976). Sec- decision processes that appear to approximate
ond, an institution modifies its competences; that such an open structure(March& Olsen, 1976).
is, it changes the skill it has at the various ac- Not all decisionsituationsare quite so unstruc-
tivities in which it might engage. Competence at tured, however. We can characterizea choice
an activity increases with experience at it; it situationin terms of two structures.The first is
decreases with time (Preston & Keachie, 1964). the access structure,a relationbetweenproblems
Third, an institution modifies its aspirations; that (or solutions) and choice opportunities.The ac-
is, it changes its definition of subjective success. cess structuremay require,allow, or not allow a
Aspirations move in the direction of past perfor- particularproblem,if activated,to be attachedto
mance (Cyert & March, 1963). It is clear that in- a particularchoice. The second structureis the
stitutional factors affect several of the key decision structure, a relation between decision
features of such learning. The learning rates makersand choice opportunities.This structure
associated with the three kinds of learning are may require,allow, or not allow that a particular
partly a function of features of the institution. decisionmakerparticipatein the makingof a par-
The degree of loose coupling in an organization ticularchoice. Access and decisionstructurescan
affects the precision with which choices are made, be imaginedin any kind of arbitraryconfigura-
outcomes observed, aspirations expressed, and tion, but two specialforms have been considered
competences realized. Thus, it can be expressed as formally. A specializedstructureis one that is
various forms of noise in the process. Organiza- decomposed into substructuresthat are open.
tional slack affects the degree of centralization in Thus, a specializeddecision structureis one in
the organization, and thus the linkage among which it is possibleto dividechoice opportunities
subunits. and decision makers into subgroupsand match
The three dimensions of learning obviously in- the two sets of subgroupsso that every decision
teract. For example, learning of aspirations af- makerin a particularsubgroupof decisionmakers
fects the definition of subjective success, and has access to every choice opportunity in the
thereby affects the learning of strategies. Learning matched set of choice opportunities,but to no
of competences affects performance outcomes, other.A hierarchicalstructureis one that expands
and thereby affects the learning of both strategies access rights as a function of hierarchicalrank.
and aspirations. Learning of strategies affects For example, in a hierarchicalaccess structure,
choices, and thereby affects the learning of com- problemsand choicesareordered,and each prob-
petences. The model can be explored to discover lem has access to choices of the same or lower
the circumstances under which it reaches an rank. The differencesmade by these structures
equilibrium, and, among those the circumstances, have been noted both formally(Cohen, March,&
those under which it reaches an optimum. It can Olsen, 1972) and empirically (Egeberg, 1981;
also be combined into more complicated struc- Olsen, 1983),but the empiricaland theoreticalex-
tures of learning where the choices of one institu- aminationof garbage-canprocesseswithinaccess
tion affect the outcomes of another (e.g., com- and decision structuresthat are not completely
petition and cooperation), and where the learning open is barelybegun.
institution is itself composed of learning subunits.
Example 3: Garbage Cans. Garbage-can models SubtlePhenomenaand SimpleTheories
of organizational choice have been suggested as a
representation of a particular temporal order. In These examples hardly exhaust the list. Em-
the form most commonly discussed in the litera- pirical observationsof reputationsfor power in
ture, the garbage-can model assumes that prob- politics suggest that such reputations depend
lems, solutions, decision makers, and choice op- heavilyon the place of an individualin a political
portunities are independent, exogenous streams structureand on inferencesabout the relationbe-
flowing through a system (Cohen, March, & tween preferencesand outcomes. Some simple
Olsen, 1972). They come together in a manner models of the dynamicrelationsamong reputa-
determined by their arrival times. Thus, solutions tions for power, institutional position, pref-
are linked to problems primarily by their simul- erences, and social outcomes would provide a
1984 OrganizationalFactorsin Political Life 747
richer understanding of the ways in which power ter, which of course does not exclude the possibil-
reputations affect politics. Empirical observations ity that it is also the former, we have tried to draw
of post-decision surprises (i.e., deviations of some possible implications for theoretical
realized outcomes from expected outcomes) sug- research in political science. They are, at best,
gest that there are systematic differences between theoretical directions suggested by a sympathetic
the ways in which individuals experience the con- appreciation of a tradition of institutionalist
sequences of their actions and the ways in which thought. Such an effort is a little like trying to
institutions do. Some simple models of institu- write a useful commentary on Heidegger in the
tional expectations, choices, and post-decision form of a Shakespearean sonnet. If it has virtue, it
assessments would clarify the occasions for ex- is in attempting to encourage talking about a
pecting positive or negative surprises from subtle body of thought in a way sufficiently naive
deliberate action. to entice the technically proficient.
What characterizes all of the examples, as well
as the others that might be added, is a relatively
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