The Choice-Within-Constraints New Institutionalism and Implications for Sociology

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Abstract
The variant of new institutionalism that is our focus is a pan-disciplinary theory that asserts that actors pursue their interests by making choices within institutional constraints. We organize our review of the theory around its behavioral assumptions, the operation of institutional forms, and processes of institutional change. At each stage, we give particular attention to the potential contributions of sociology to the theory. The behavioral assumptions of the theory amount to bounded rationality and imply transaction costs, which, in the absence of institutions, may frustrate collective ends. The principle weakness of these behavioral assumptions is a failure to treat preferences as endogenous. We categorize the institutions that arise in response to transaction costs as to whether they are public or private in their source and centralized or decentralized in their making. In detailing the resulting categories of institutional forms, we identify key interdependencies across the public/private and cen...