20058873
DESCRIPTION
bea nnrgbsnrbrbTRANSCRIPT
Institutions and Development: A Conceptual ReanalysisAuthor(s): Alejandro PortesSource: Population and Development Review, Vol. 32, No. 2 (Jun., 2006), pp. 233-262Published by: Population CouncilStable URL: http://www.jstor.org/stable/20058873Accessed: 09/10/2009 17:34
Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available athttp://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unlessyou have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and youmay use content in the JSTOR archive only for your personal, non-commercial use.
Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained athttp://www.jstor.org/action/showPublisher?publisherCode=popcouncil.
Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].
Population Council is collaborating with JSTOR to digitize, preserve and extend access to Population andDevelopment Review.
http://www.jstor.org
Institutions and
Development: A Conceptual Reanalysis
Alejandro Portes
Recent years have brought a significant change in the evolution of eco
nomics and sociology, including an unexpected convergence in their ap
proaches to issues like firms and economic development. This convergence
pivots around the concept of "institutions," a familiar term in sociology and
social anthropology but something of a revolution in economics, dominated so far by the neoclassical paradigm. This development has been accompa
nied by confusion about what the new master term means and, importantly,
by a failure to mine prior theoretical work that sought to order, classify, and relate the multiple aspects of social life that are now brought under the same umbrella concept. The result has been a number of ad hoc typologies that highlight some features of what needs to be explained, while obscur
ing others.
In this essay, I seek to reverse these trends by recalling key concepts and distinctions in sociological theory and illustrating their analytic utility
with examples from the recent literature on economic development. My argument is that recourse to these concepts and distinctions enhances our
ability to analyze economic and "economically relevant" phenomena (We ber [1904] 1949). I provide an illustration of the utility of a systematic so
ciological perspective by addressing the issue of fertility transitions, one of
the central subjects of debate in modern demographic theory.
The new institutionalism
As Peter Evans has pointed out, the long-held consensus in economics that
equated increasing capital stocks with national development has given way to an emerging view that the central role belongs to "institutions" (Evans
2004a). He approvingly quotes Hoff and Stiglitz (2001: 389) to the effect that
"development is no longer seen as a process of capital accumulation, but as a
POPULATION AND DEVELOPMENT REVIEW 32(2): 233-262 (JUNE 2006) 233
234 Institutions and Development
process of organizational change." Sociologists of development, including Evans himself and several nonorthodox economists, have been saying the
same thing for decades without their arguments succeeding in swaying the
economic mainstream (Evans 1979, 1995; Hamilton and Biggart 1988; Portes
1997; Hirschman 1958, 1963). Not until two Nobel laureates in economics,
Joseph Stiglitz and Douglass North, elaborated the same arguments were some
of those in the mainstream convinced. When North declared that "institu
tions matter," other analysts started to take them into account.
By 2004, the development economist G?rard Roland declared that "we
are all institutionalists now" (Roland 2004: 110). While in other areas of
the discipline the new institutionalists still battle neoclassical orthodoxy, in
the field of economic development that struggle seems to have ended. Soci
ologists have generally welcomed this "institutional turn" (Evans 2004b;
Nee 2005) as a vindication of their own ideas, albeit with a critical omis
sion. Swayed perhaps by the promise of interdisciplinary collaboration in
the wake of the new ideas, they have overlooked a fundamental fact: econo
mists do not routinely deal with the multiple elements of social life or their
interaction and, in their attempts to do so, they often confuse them, pro
ducing impoverished or simply erroneous perceptions of reality. Other observers have noted the same problem and put it in still more
critical terms. Geoffrey Hodgson states:
The blindness may be partial, but the impairment is nevertheless serious and
disabling. What is meant by this allegation of blindness is that, despite their
intentions, many mainstream economists lack the conceptual apparatus to
discern anything but the haziest institutional outlines ... [they] have not got
adequate vision tools to distinguish between different types of institutions, nor to appraise properly what is going on in them. (Hodgson 2002: 148)
This judgment may be too harsh because, after all, institutional econo
mists have taken the first steps toward incorporating key elements of social
reality into their analyses. However, the level of interdisciplinary collabora
tion needed to do this optimally is still lacking. The first question is what
institutions actually are. The answer that emerges from economics is a dis
parate set of factors that range from social norms to values, and all the way to
"property rights" and complex organizations such as corporations and agen
cies of the state (Haggard 2004; Williamson 1975, 1985). North (1990: 3)
defined institutions as "any form of constraint that human beings devise to
shape human interaction," a vague definition that encompasses everything
from norms introjected in the process of socialization to physical coercion.
From this thin definition, all that can be said is that institutions exist
when something exerts external influence over the behavior of social ac
tors: the same notion that Durkheim identified as "norms" more than a
century ago and not sufficient to capture the dynamics of communities and
Alejandro Portes 235
societies. In a recent attempt to clarify the concept, Roland (2004) has de
veloped a typology that distinguishes between "slow-moving" institutions
(like culture) and "fast-moving" institutions (like legal rules and organiza tional blueprints). In his view, the reason transplanted institutional blue
prints fail to achieve their objectives in many countries of the global South
is that they clash with the host country's "slow-moving" institutions such
as social norms and entrenched power structures.
To convey the flavor of the ad hoc sociology now being developed in
economics, two examples from Roland's essay suffice:
Whatever group holds power will use that power in its own best interest.
Thus, ruling elites who have a vested interest in maintaining their power in societies with inefficient institutions may not agree to give up that power because the winners of institutional change may not be able to commit to
compensation schemes for the losers, (ibid.: 115)
[l]n general, social norms and values change slowly. Even individual social norms, such as attitudes towards the death penalty or acceptance of corrup
tion, tend to change rather slowly, possibly because many norms are rooted
in religions whose basic precepts have changed remarkably little for centu ries.... (Roland 2004: 116)
Norms are indeed rooted in values that tend to resist change, and power structures change slowly because powerholders prefer not to give up their
privileges. Confronted with such commonplace assertions, some sociologists have accepted these well-intentioned but elementary incursions into famil
iar terrain as the basis for a "new institutionalism" in sociology (Nee and
Ingram 1998). From the field of socioeconomics have come additional at
tempts to impose some order on this conceptual murkiness. Hollingsworth (2002), for example, distinguishes between "institutions" (norms, rules, con
ventions, values, habits, etc.), "institutional arrangements" (markets, states,
corporate hierarchies, networks, etc.), "institutional sectors" (financial sys tems, systems of education, business systems), "organizations," and "out
puts and performance" (quantity and quality of products, etc.). This typol ogy is, unfortunately, ad hoc, suffering again from the tendency to lump
disparate elements under the same concept and failing to distinguish be
tween different levels of causal significance. Neoinstitutionalism has also traveled to the realm of politics, where it
has been used, as in economics, to denote the constraints that the social
context puts on the actions of "rational man," thus leading to "bounded
rationality" (Dolsak and Ostrom 2003; Elster, Offe, and Preuss 1998). While
itself unimpeachable, this assertion leaves open the question of what are
the features of social context that actually "bound" rational action. Saying
simply that everything depends on time and place leads us nowhere theo
retically, as this statement is nonfalsifiable.
236 Institutions and Development
Moving things further, Elinor Ostrom has proposed a neoinstitutional
analysis of the "Commons," seeking to solve the dilemma between self-in
terest and the collective good among users of the same readily available,
but exhaustible common property resources. Ostrom (1990; Ostrom et al.
2002) argues that neither the state nor the market does a very good job in
these situations, since they seek to impose external rules on the relevant
actors. Rather, actors can devise their own enforceable institutional arrange ments (i.e., norms) to escape the tyranny of atomized self-interest. These
norms again vary with time and place. As we will see shortly, Ostrom's
analysis is compatible with a sociologically informed analysis of institutional
development, but the latter has the advantage of going beyond the simple assertion that such arrangements vary with the local context.
In sum, development economists and neoinstitutionalists seek to flesh
out North's insight that social constraints matter. But in the absence of a
solid theoretical framework, the practical results of this "institutional turn"
have been what might be expected. In the hands of development practitio ners, the new consensus has led to the attempted export of legal codes and
organizational blueprints to the global South. The dismal results of such
attempts have already been recognized (Evans 2004a; Hoff and Stiglitz 2001 ).
However, we can do more than point out that such efforts are doomed from
the start. Economists and other social scientists can draw on established theo
retical traditions to sharpen their conceptual tools and devise a more so
phisticated and useful mapping of social life. Sociologists can contribute to
this enterprise by refining their own conceptual legacy. The resulting "thick
institutionalism" is preferable, in most instances, to the "thin" version now
making the rounds in several disciplines. The basis for fruitful interdisciplinary collaboration is already at hand
and consists of a body of knowledge containing key elements for the analy sis of what takes place in society and for the proper placement of the con
cept of "institution." These elements include: 1) a distinction between the
symbolic realm and the material reality; 2) an understanding of the hierar
chical character of both realms; 3) an identification of the lynchpin con
cepts linking both; and 4) a theory of social change that goes beyond cur
rent institutionalist understandings of this process (Campbell 2004). What
follows represents my own understanding of this body of knowledge; other
authors may provide alternative interpretations.
Culture and social structure
From its classical beginnings, modern sociology developed a central dis
tinction, consolidated by the mid-twentieth century, between culture and
social structure. There are good reasons for this distinction. Culture em
bodies the symbolic elements crucial for human interaction, mutual un
Alejandro Portes 237
derstanding, and order. Social structure is composed of actual persons en
acting roles and organized in a status hierarchy of some kind. The distinc
tion is analytical because only human beings exist in reality, but it is fun
damental to understand both the motives for their actions and their
consequences. Culture is the realm of values, cognitive frameworks, and
accumulated knowledge. Social structure is the realm of interests, individual
and collective, backed by different amounts of power. The symbolic dis
tinction provides the basis for analyzing the difference between what "ought to be" or "is expected to be" and what actually "is" in multiple social con
texts (Merton 1936, 1968a). The diverse elements that compose culture and social structure can be
arranged in a hierarchy of causative influences: from "deep" factors, often
concealed below everyday social life but fundamental for its organization, to "surface" phenomena, more mutable and more readily evident. Language and values are the "deep" elements of culture, the first as the fundamental
instrument of human communication and the second as the motivating force
behind "principled" action, individual or collective. The importance of val
ues can range, in turn, from fundamental moral imperatives of a society to
traditions prized mostly out of custom. In every instance, values point to
ward a clear continuum between the good and desirable and the bad and
abhorrent. "Neutrality" is the exact opposite of this basic element of culture
(Durkheim [1897] 1965; Weber [1904] 1949). Values are deep culture be
cause they are seldom invoked in the course of everyday life. Values come
to the fore only in exceptional circumstances (Weber [1904] 1949; Merton
1989). Yet they underlie, and are inferred from, aspects of everyday behav
ior that are the opposite of unrestrained self-interest, the "constraints" that
North, Ostrom, and others refer to.
Norms are such constraints. Values are not norms. The distinction is
important: values represent general moral principles, and norms embody concrete directives for action (Newcomb, Turner, and Converse 1965;
Maclver and Page [1949] 1961). Values underlie norms, which are rules
that prescribe the "do's" and "don't's" of individual everyday conduct. These
rules can be formal and codified into constitutions and laws, or they can be
implicit and informally enforced. The concept of norms has been used, at
least since Durkheim ([1901] 1982), to refer to this restraining element of
culture. Neglect of these classical analyses in the current institutionalist lit
erature has led to lumping norms with the term "institution," which has
another, and important, connotation, as seen below. The significance of the
values embodied within norms is reflected in practice in the level of sanc
tions attached to the latter. Thus life in prison or the death penalty awaits
those found guilty of deliberate murder, while loud protest and insulting remarks may be the lot of those seeking to sneak ahead in a queue (Cooley 1902, 1912; Simmel [1908] 1964; Goffman 1959).
238 Institutions and Development
As these examples indicate, the enforcement aspect of norms (sanc
tions) can be both formal and informal, but generally the more important the underlying value, the more likely that sanctions are codified and writ
ten into law or other explicit texts. This is as true of negative sanctions, such as jail terms, as of positive ones, such as awards and prizes for achieve
ment. Mores and folkways are the sociological terms used for almost a cen
tury to designate important norms reflecting major societal values, in con
tradistinction to those derived mainly from tradition (Sumner 1907; Maclver
and Page [1949] 1961: 20; Merton 1968b: 331, 351). Norms are not free-floating, but come together in organized bundles
known as roles. This sociological concept has been neglected in the institu
tionalist literature, which thus deprives itself of a key analytic tool. For it is
as role occupants that individuals enter into the social world and are sub
ject to the constraints and incentives of norms. Roles are generally defined
as the set of behaviors prescribed for occupants of particular social positions
(Linton 1945; Newcomb 1950: Ch. 3). Well-socialized persons shift from
role to role effortlessly and often unconsciously as part of their daily rou
tines. The normative blueprints that constitute a role generally leave con
siderable latitude for their individual enactment. Thus the role of "physi cian" or "mother" may be performed in very different ways by individual
occupants, while still conforming to the normative expectations for the role.
Normative expectations may also vary across cultures. To anticipate the sub
sequent discussion, the roles of "policeman" or "government minister" may
embody very different behavioral blueprints in different societal contexts,
despite being designated by the same formal label.
An extensive literature in both sociology and social psychology has
analyzed roles as the building blocks of social life and as one of the lynchpin
concepts linking the symbolic world of culture to real social structures. The
same literature has examined such dynamics as the "role set" enacted by
given social actors and the "role conflict" or "role strain" created when nor
mative expectations in an actor's role sets contradict each other (Cottrell 1933; Linton 1945; Merton 1957; Goffman 1959, 1961; Goode 1960). None
of these concepts has made its appearance in the ad hoc sociology being created in economics, nor in the thin neoinstitutionalism currently prac ticed in both sociology and political science. Roles are an integral part of
institutions, but they are not institutions and confusing the two terms weak
ens the heuristic power of both concepts.
Along with normative expectations, roles also embody an instrumen
tal repertoire of skills necessary for their proper enactment. Language is the
fundamental component of this repertoire, for, without it, no other skills
can be enacted. These cultural "tool kits" also contain many other elements?
from scientific and professional know-how to demeanor, forms of expres
sions, manners, and general savoir faire suitable for specific social occasions.
Alejandro Portes 239
Again, the cultural repertoires attached to specific roles such as "policeman" or "government minister" can vary significantly across societies, despite the
formal identity of their titles. In the modern sociological literature, these
elements are referred to by the concepts of cultural capital and skills reper toires (Bourdieu 1979, 1984; Swidler 1986; Zelizer 2005).
Power, class, and status
Parallel to the component elements of culture run those of social structure.
These are not made up of moral values or generalized "do's" and "don't's"
flowing from them, but involve the specific and differentiated ability of so
cial actors to compel others to do their bidding. This is the realm of power,
which, like that of values, is situated at the "deep" level of social life influ
encing a wide variety of outcomes, albeit in different ways. Weber's classic
definition of power as the ability of an actor to impose his or her will de
spite resistance is still appropriate, for it highlights the compulsory and co
ercive nature of this basic element of social structure. It does not depend on
the voluntary consent of subordinates, and, for some actors and groups to
have power, others must be excluded from access to power-conferring re
sources (Weber [1922] 1947; Veblen [1899] 1998; Mills 1959). While val
ues motivate or constrain, power enables. Naturally, elites in control of
power-conferring resources seek to stabilize and perpetuate their position
by molding values so that the mass of the population is persuaded of the
"fairness" of the existing order. Power thus legitimized becomes authority, in which subordinates readily acquiesce to their position (Weber [1922]
1947; Bendix 1962: Chs. 9-10). In Marx's classic definition, power depends on control of the means of
production, but in the modern postindustrial world this definition appears to be too restrictive (Marx [1939] 1970; [1867] 1967: Part VII). Power is
conferred as well by control of the means of producing and appropriating
knowledge, by control of the means of diffusing information, and by the
more traditional control of the means of violence (Weber [1922] 1947;
Wright 1980, 1985; Poulantzas 1975). In the Marxist tradition, a hegemonic class is one that has succeeded in legitimizing its control of the raw means
of power, thus transforming it into authority (Gramsci [1927-33] 1971; Poulantzas 1975). Power is not absent from contemporary institutional eco
nomics, but the emphasis is on authority relations within firms?what
Williamson (1975, 1985) calls "hierarchies." Although these analyses are
important, they neglect more basic forms of power, including the power to
bring firms into being in the first place. This omission supports Hodgson's
argument on the lack of tools in modern economics to understand what
institutions really are. For as we shall see shortly, actual institutions are
molded, to a large extent, by power differentials. Sociologists who have been
240 Institutions and Development
following the economists' lead have also neglected these differentials, as
well as the fundamental concept that flows from them: social class.
Just as values are embodied within norms, so power differentials give rise to social classes?large aggregates whose possession of or exclusion from
resources leads to varying life chances and capacities to influence the course
of events. Classes need not be subjectively perceived by their occupants in
order to be operative, for they underlie the obvious fact that people in soci
ety are ranked according to what they can or cannot do or, alternatively, by how far they are able to implement their goals when confronted with resis
tance (Wright 1985; Wright and Perrone 1976; Poulantzas 1975). Class po sition is commonly associated with wealth or its lack, but it is also linked to
other power-conferring resources such as expertise or the "right" connec
tions (Hout, Brooks, and Manza 1993; Bourdieu 1984, 1990; Portes 2000a). As emphasized by Pierre Bourdieu (1985) dominant classes generally com
mand a mix of resources that include not only wealth, but also ties to influ
ential others (social capital) and the knowledge and style to occupy high status positions (cultural capital).
The deep character of power seldom comes to the surface of society, for, as seen previously, its holders aim to legitimize it in the value system in order
to obtain the voluntary consent of the governed. For the same reason, class
position is not readily transparent and it is a fact, repeatedly verified by em
pirical research, that individuals with very different resources and life chances
frequently identify themselves as members of the same "class" (Hout, Brooks,
and Manza 1993; Grusky and Sorensen 1998). Legitimized power (author
ity) produces, in turn, status hierarchies; most social actors actually perceive the underlying structure of power on the basis of such hierarchies and clas
sify themselves accordingly. In turn, status hierarchies are commonly linked
to the performance of occupational roles defined by differential bundles of
norms and skill repertoires (Maclver and Page [1949] 1961; Newcomb, Turner,
and Converse 1965: 336-341; Linton 1945). The various elements of culture and social structure, placed at differ
ent levels of causal importance and visibility, occur simultaneously and ap
pear, at first glance, like an undifferentiated mass. Their analytic separation is required, however, for the proper understanding of social phenomena,
including economic phenomena. Not everything is "constraints on behav
ior"; some elements constrain, others motivate, and still others enable.
Economists have not done the conceptual spadework required to under
stand these differences. The conceptual framework outlined thus far is sum
marized in Figure 1. As the citations accompanying the text suggest, this
framework is neither new nor improvised, but forms part of a classical in
tellectual legacy neglected in the enthusiasm for the "institutionalist turn."
Other sociologists may rearrange some of the elements of this concep tual framework or introduce others, but I think that many will agree with
Alejandro Portes 241
FIGURE 1 Elements of social life
Causal influence
Deep
Intermediate
i
Visible (individuals)
i Visible (collective)
NOTE: Here and in subsequent figures, arrows indicate the hypothesized direction of causal influence.
its basic contours. In reality, all key elements of social life, both constrain
ing and enabling, are related and influence one another, but arrows are
used sparingly in this diagram in order to highlight their analytic distinct
ness. Only two horizontal double arrows are included, linking the spheres of culture and social structure at the individual level (role and status) and
at the collective level. This latter link is discussed next.
Institutions in perspective
As indicated in Figure 1, status hierarchies with attached roles do not gen
erally exist in isolation, but as part of social organizations. Organizations, economic and otherwise, are what social actors inhabit, and they embody the most readily visible manifestations of the underlying structures of power
(Powell 1990; DiMaggio 1990; Granovetter 2001). Institutions represent the
symbolic blueprint for organizations; they are the set of rules, written or
informal, governing relationships among role occupants in social organiza tions like the family, schools, and other major institutionally structured ar
eas of organizational life: the polity, the economy, religion, communica
tions and information, and leisure (Maclver and Page [1949] 1961; Merton
1968c; North 1990; Hollingsworth 2002). This definition of institutions is in close agreement with everyday uses
of the term, as when one speaks of "institutional blueprints." Its validity does not depend, however, on this overlap, but on its analytic utility. My
position concerning this and other concepts in the preceding sociological framework is nominalist. They are mental constructs whose usefulness is
given by their collective capacity to guide our understanding of social phe nomena, including the economy. If North and his followers denominate
norms "institutions," then they must cope with the conceptual problem of
Culture
Values
Norms Skills repertoires
(cultura], capital)
Roles
Institutions
Social structure
Power
!
Class structure
~* Status hierarchies
"*" Organizations
242 Institutions and Development
the relationship between such "institutions" and the roles in which they are embedded, as well as the symbolic blueprints specifying relationships
among such roles and, hence, the actual structure of organizations. As An
thony Giddens (1993) has noted, institutions are not social structures, they have social structure (i.e., organizations) as the actual embodiment of the
blueprints guiding relationships between roles.
A "thick" institutionalism that bounds the concept, while systematically
relating it to other elements of social life, gives us the necessary analytic le
verage to understand phenomena that otherwise would be obscured. For ex
ample, the distinction between organizations and the institutions that under
lie them provides a basis for analyzing how events actually occur in social and
economic life. For it is not the case that, once institutional rules are estab
lished, role occupants blindly follow. Instead, they constantly modify the rules,
transform them, and bypass them in the course of their daily interaction.
No doubt "institutions matter," but they are themselves subject to what
Granovetter (1985, 1992) referred to as "the problem of embeddedness":
the fact that the human exchanges that institutions seek to guide in turn
affect these institutions. That is why formal goals and prescribed organiza tional hierarchies come to differ from how organizations operate in reality
(Dalton 1959; Morrill 1991; Powell 1990). Absent this analytic separation, as well as the understanding that institutions and organizations flow from
deeper levels of social life, everything becomes an undifferentiated mass
where the recognition that "contexts matter" produces, at best, descriptive case studies and, at worst, circular reasoning. The following sections seek to
put the aforementioned conceptual framework into motion on the basis of
two recent examples from the literature on national development.
The failure of institutional monocropping
The most tangible practical result of the advent of institutionalism in the
field of economic development has been the attempt to transplant the insti
tutional forms of the developed West, especially the United States, into the
less developed world. The definition of "institutions" employed in such at
tempts is in close agreement with that advanced here: blueprints specifying the functions and prerogatives of roles and the relationships among their
occupants. Institutions and the resulting organizations may be created from
scratch?as a central bank, a stock exchange, or an ombudsman office?or
they may be remolded?as in attempts to strengthen the independence of
the judiciary or streamline the local legislature (Haggard 2004).
Many authors have noted that these attempts to put the ideas of North
and other institutionalists into practice have not yielded the expected re
sults and have frequently backfired. Evans, in particular, calls these exer
cises in transplantation "institutional monocropping," whereby the set of
Alejandro Portes 243
rules constructed by trial and error over centuries in the advanced coun
tries is grafted into different societies and expected to have comparable re
sults (Evans 2004a). Roland (2004) diagnoses the cause of the failures of
such efforts as lying in the gap between "slow-moving" and "fast-moving" institutions, but the actual forces at play are much more complex.
Institutional grafting takes place at the surface level of things and, as
such, faces the potential opposition of a dual set of forces grounded in the
deep structure of the receiving societies: those based on values and those
based on power. Within the realm of culture, consider the different bundles
of norms and cultural tool kits that go into formally similar roles. That of
"policeman" may entail, in less developed societies, the expectation to com
pensate paltry wages with bribe-taking, a legitimate preference for kin and
friends over strangers in the discharge of duties, and skills that extend no
further than using firearms and readily clubbing civilians at the first sign of
trouble. The role of "government minister" may similarly entail the expec tation of particularistic preferences in the allocation of jobs and govern
ment patronage, appointments by party loyalty rather than expertise, and
the practice of using the power of the office to ensure the long-term eco
nomic well-being of the occupant through variable levels of graft. Such role expectations are grounded in deeply held values that privi
lege particularistic obligations and ascriptive ties and that encourage suspi cion of official bureaucracies and seemingly universalistic rules. When im
ported institutional blueprints are superimposed on such realities, the results
are not hard to imagine. These plans do not necessarily backfire, but they can have a series of unexpected consequences following from the fact that
those in charge of their implementation and the presumed beneficiaries view
reality through very different cultural lenses (O'Donnell 1994; Portes 1997,
2000b). Institutional grafting has had the purpose of strengthening certain
branches of the state, promoting a more efficient allocation of resources,
and enhancing the attractiveness of the country to foreign investors. These
are worthy goals, but they often clash with the material interests of those
in positions of power. Dominant classes in the target countries seldom will
ingly give up their positions or power-conferring resources. A struggle al
most invariably ensues in which the advantages of incumbency confer the
upper hand on entrenched elites. This is why it has been so difficult to imple ment agrarian reform policies in the face of the organized opposition of land
owners, or to increase the international competitiveness of local industries
owned by privileged groups accustomed to state protection (De Janvry and
Garram?n 1977; Centeno 1994; Evans 1989, 1995). Several authors, including economists who have analyzed these dy
namics, recognize the importance of power. Karla Hoff and Joseph Stiglitz
(2001: 418-420) note, for example, that imposing new sets of formal rules
244 Institutions and Development
without simultaneously reshaping the distribution of power is a dubious
strategy. Similarly, in the previously cited passage, Roland (2004: 115) rec
ognizes the obvious, that "whatever group holds power will use that power in its own best interest." Less well understood are two other key features of
social structures. The first is that "power" is not a free-floating entity, but
depends on control of certain strategic resources?capital, means of pro
duction, organized violence?that vary from country to country. Second, and more important, the existing class structure and those on top of it may be legitimized by the value system in such a way that change is resisted not
only by those in positions of privilege, but by the mass of the population as
well. As Weber and the line of Marxist theories inspired by Gramsci recog
nized, legitimized power is particularly hard to dislodge because the masses
not only acquiesce to their own subordination, but stand ready to defend
the existing order. The experiences of "modernizing" regimes seeking to
dislodge entrenched theocratic authorities in the Middle East and elsewhere
illustrate the decisive role of this kind of power (Lerner 1958; Levy 1966;
Bellah 1958).
Following the argument of another Nobel Prize winner, Amartya Sen, Evans (2004a) offers an alternative to institutional monocropping, which
he labels "deliberative development." Sen's argument for participatory de
mocracy starts with the notion that "thickly democratic" initiatives, built
on public discussion and free exchange of ideas, offer the only way to reach
viable development goals. For Sen (1999), thickly democratic participation is not only a means to an end, but a developmental goal in itself. Evans
agrees and cites the "participatory budgeting" process in Brazilian cities domi
nated by parties of the Left as an example of the viability of deliberative
development (Baiocchi 2003). Ostrom's (1990) analysis of and solution to the "tragedy of the com
mons," discussed above, follow parallel lines. She, too, criticizes state at
tempts to impose external rules and deems them doomed to failure for rea
sons similar to those described by Evans. Instead, she advocates institutional
blueprints that grow out of dialogue and commitments among users of com
mon property resources. Thus fishers using the same ocean grounds have
been able to come up with better and more durable solutions to the deple tion of stocks than the set of rules dreamed up by state bureaucrats (Ostrom 1990: 18-20).
The conceptual framework discussed previously is useful to envision
the contrast between institutional grafting and deliberative development. As shown in Figure 2, the idea of importing institutions begins at the sur
face level and tries to push its way "upward" into the normative structure
and value system of society. For reasons already seen, such efforts are likely to meet resistance and frequent failure. The participatory strategy begins at
the other end, by engaging the population in a broad discussion of develop ment goals (values) and the rules (norms) and technical means (skill reper
Alejandro Portes 245
FIGURE 2 Participatory democracy and institutional monocropping
Causal influence
Deep
i
Intermediate
i
Visible
Norms
Individual
Collective
Deliberative
development
Cultural repertoires
Roles
it tuti
t
Institutions
Institutional grafting
toires) necessary to attain them. Although the process is messy and compli
cated, the institutional blueprints that eventually emerge from these dis
cussions are likely to be successful because they correspond to the causal
directionality of culture itself.
A key problem with deliberative development proposals, however, is
that they ignore the right-side elements of society, as outlined in Figure 1,
namely those grounded in power and crystallized in the class structure. Un
less the dominant classes are somehow persuaded or compelled to go along with such experiments, the latter are not likely to succeed. If implemented
against elite resistance, they are bound to be derailed into just talk?delib
eration as an end in itself. When the population mobilized to take part in
such meetings sees that they lead to nothing or produce outcomes prede termined by the authorities, participation drops rapidly and generalized dis
content sets in (Roberts and Portes 2005; Roberts 2002). As Sen (1999) himself recognizes, technocrats (i.e., technically trained
elites) prefer to impose institutional blueprints that enhance their power and external image, rather than subordinate themselves to the messy delib
erations of ordinary people. Evans (2004a: 40) acknowledges as well that
the dynamics of power are likely to be the biggest impediment to the "insti
tutionalization of deliberative institutions." Not surprisingly, only when par ties of the Left have gained solid control of governments have experiments in participatory democracy been given a reasonable chance of success. This
occurs because authorities can mobilize the resources of government to neu
tralize resources possessed by local elites, persuading them that it is "in their
interest" to join the deliberative process (Biaocchi 2003; Agarwala 2004).
246 Institutions and Development
The privatization of the Mexican economy
Starting in 1982, Mexico's government began a massive program of divesti
ture of the many companies that it had created. This program amounted to
a radical departure from the previous state-centric model of development and affected the interests of almost everyone in Mexican society (Centeno
1994; Ariza and Ramirez 2005). The shift came in the aftermath of the Mexi
can default of 1982 and the conditions imposed by the International Mon
etary Fund (IMF) and the US Treasury to bail out the country. Over the
next three sexenios (presidential terms), the Mexican state divested itself of
almost everything?from the telecommunications company to the two na
tional airlines (Mexicana de Aviaci?n and Aerom?xico). This massive economic realignment was not accomplished without re
sistance. A great deal of money was to be made from privatizations, but
there were also a number of actors who lost power, wealth, or their jobs. In
a recent study, Dag MacLeod (2004) examined how the program was imple mented and with what results. Mexico's privatization of the economy
amounted to drastic institutional change?a profound modification of the
legal/normative blueprints under which firms operate and their internal or
ganization. This transformation, however, could not have been accomplished at the level of the institutions themselves, for it required the intervention
of much deeper forces.
State-owned firms operated with a logic of their own, creating con
stituencies around themselves. Although frequently inefficient, they gave secure employment to many and political capital to the line ministers and
managers who operated them (Lomnitz 1982; Eckstein 1977). Thus,
Aeromexico operated with a staff of 200 employees per airplane at a time
when the inefficient and about-to-be-bankrupt Eastern Airlines had 146.
Yet, the minute that plans for Aeromexico's restructuring were announced,
its employees struck, arguing that the firm would be profitable "if only"
management were more efficient (MacLeod 2004: 123, 133). The battle for divestment and market opening pitted the unions, the
managers of state-owned industries, and the ministries that supervised them
against a group of reformers imbued with the new neoliberal doctrines at
the Treasury Ministry and other strategic places in the Mexican bureau
cracy. Large capitalists, foreign multinationals, and the IMF supported di
vestiture and opening; while small-firm owners, who had much to lose from
the removal of state protection, opposed it:
Although Mexican capitalists had united briefly..., they were soon divided
again, between large and small, internationally oriented and domestically fo
cused. As President de la Madrid began lowering tariff barriers and allowing
greater foreign investment, it soon became clear that labor would not be the
only casualty of restructuring.... (MacLeod 2004: 96)
Alejandro Portes 247
During President de la Madrid's sexenio, only smaller and relatively
marginal firms were privatized. Defenders of the status quo could keep faith
that the strong corporatist traditions of the ruling party, the PRI, would in
the end prevail. Despite sustained external pressure, institutions (i.e. state
owned corporations) would not reform themselves and attempts at reform
were effectively resisted:
When it became clear during the de la Madrid administration that the very source of political power and patronage?the parastate firm?might actually
be taken away, officials within the bureaucracy quickly developed strategies for resisting privatization.
From their positions on the executive committees and boards of directors of
parastate firms, line ministers could keep a watchful eye on the efforts of
would-be reformers.... [L]ine ministers withheld data or presented contra
dictory and incorrect data, making it virtually impossible to evaluate a com
pany.... (ibid.: 71, 75-76)
True reform, as the IMF and the multinational corporations envisioned
it, could only come from the top of the power structure. This actually hap
pened during the next sexenio under President Carlos Salinas de Gortari. A
convinced free marketeer, Salinas appointed economists of the same per suasion to key positions in the Central Bank and the Treasury Ministry.
Once there, they created new, compact, and powerful agencies to ensure
that privatization would move forward. The president shifted the balance
of power, abandoning erstwhile allies in the unions, the smaller industrial
ists, and farmers to establish a firm alliance with the larger and more inter
nationalized sector of the Mexican capitalist class.
Not willing to believe that things would take such a turn for the worse,
union leaders and firm managers bypassed the new bureaucratic structures
to take their case directly to the president. To no avail:
When the UDEP [Unit for the Divestiture of Parastate Entities] began the pro cess of privatizing parastate firms, labor leaders, line ministers, and execu
tives of parastate firms often sought to circumvent the authority of the UDEP
by appealing directly to the president. President Salinas regularly sent these
supplicants back to the director of the UDEP.... This process quickly solidified the authority of the UDEP within the Mexican bureaucracy, (ibid.: 81-82)
The "sale of the state" engineered by UDEP in subsequent years amounted to a major case of institutional transformation; it also represents a clear example of the dynamics of power. As shown in Figure 3, reforms
initiated from the outside and from below barely made a dent in the Mexi
can corporatist structure. It was necessary for the country's top political and
248 Institutions and Development
FIGURE 3 The divestiture of parastate corporations in Mexico
Causal influence
Deep
i
Intermediate
i
Visible Individual
Collective Institutions
Social
structure
Power
u s stn.
u
Class structure
Status hierarchies
u Organizations
(parastate firms)
Presidential
mandate in
alliance with top
capitalists and
state bureaucrats
External influence and
pressure from the IMF and
other foreign agencies
economic leadership to get involved in order to overcome strong and orga nized resistance from various classes. Unionized workers and national en
trepreneurs became the losers in this giant power struggle that saw the Mexi
can labor market become far more "flexible" and the Mexican corporation far more open to external competition and takeover (Shaiken 1990, 1994;
Ariza and Ramirez 2005). As elsewhere, significant institutional and orga nizational change did not originate with organizations themselves, but re
quired major transformations at deeper levels of the social structure.
However, just as attempted transformations of existing institutions can
meet with resistance from power holders in the social structure, power plays that impose institutional change can produce generalized opposition when
the underlying values remain unaltered. The Salinas reforms took place
against a background of public skepticism about the need to denationalize
the economy and strong opposition from many sectors of Mexican society
(MacLeod 2004). Salinas ended his term in disgrace, becoming an unpopu lar figure and eventually being forced to leave the country. While the course
on which he set the Mexican economy remains unaltered, there are grow
ing signs of resistance from the mass of the population inasmuch as the
announced benefits of privatization have failed to materialize (Ariza and
Ramirez 2005). "Neoliberalism" itself has become an epithet, and Mexican
parties and politicians seeking office now distance themselves from the term
and the privatizing reform imposed from above under its guidance (Delgado Wise 2005).
Alejandro Portes 249
The problem of change
Diffusion and path dependence
In his recent book, Institutional Change and Globalization (2004), John
Campbell systematically describes the different schools of institutional anal
ysis that exist today. These he labels "rational choice institutionalism," as
sociated primarily with economics; "organizational institutionalism," asso
ciated with the sociology of organizations; and "historical institutionalism,"
based on political economy and certain strands of political science. Depend
ing on the school, social change is seen primarily as an evolutionary pro
cess, developing gradually over time, or as a combination of evolution and
"punctuated evolution" when drastic shifts occur.
Despite these differences, Campbell characterizes all three schools as
favoring two major determinants of change. These are "path dependence,"
meaning the tendency of events to follow a set course where "what existed
yesterday" largely determines what happens today and what is likely to oc
cur tomorrow (Thelen 2004; North 1990); and "diffusion," meaning the ten
dency of established institutional patterns to migrate, influencing the course
of events. Diffusion is identified by the school led by John Meyer as a mas
ter process in the contemporary global system in which the institutions of
the advanced countries, particularly the United States, are commonly re
produced in weaker societies, either under the aegis of international agen cies or out of the desire of local rulers to imitate the modern world (Meyer and Hannan 1979; Meyer et al. 1997).
Campbell argues that "the problem of change" has been a thorny one
for institutional analysis. This is not difficult to understand. First, with a
vague and contested definition of "institution," the analysis of change con
fronts an elusive target. When an institution can be anything?from the
incest taboo to the central bank?we do not have a sufficiently delimited
object to examine how it changes over time. The sociological definition ad
vanced here?sets of rules that govern the regular relationships among role
occupants?is sufficiently specific to allow consideration of how processes of change take place in this sector of social life. Thus defined, institutional
change is not the same as change in the class structure or in the value sys
tem?processes that ultimately affect institutions but that occur elsewhere.
Second, with concepts such as path dependence and diffusion as the
main tools for the analysis of change, it is not difficult to understand how
the predicted course of events for institutional analysis would be either
evolution or "punctuated evolution." It is a fact that, at the surface level
of social life, change tends to be gradual with patterned ways of doing
things largely determining the future course of events, and transforma
tions in roles and institutional blueprints occurring almost imperceptibly.
250 Institutions and Development
Inter-societal diffusion of culture may operate at deeper levels, affecting the normative and skill contents of specific roles. Diffusion of new tech
nologies (skills repertoires) and patterns of consumption (norms) from the
advanced world to the less developed countries is indeed one of the most
common and most important sources of change in these countries (Sassen
1988; Meyer et al. 1997). But dynamics of change are not limited to diffusion and path depen
dence; they can also exist at deeper levels of the culture and social struc
ture, producing drastic and nonevolutionary outcomes. To be sure, as ar
gued by some institutionalists, radical change tends to have long periods of
gestation, but this does not negate the fact that once such change occurs,
consequences for the affected populations can be abrupt and often trau
matic. Technological changes, to take but one example, can be endogenous rather than brought about solely by diffusion. Once they occur, technologi cal breakthroughs can affect, in a very short time, the skills repertoires and,
hence, the roles of large numbers of social actors. One such example, the
advent of the Internet, is an innovation that has altered the content of oc
cupational roles and the rules linking them in most institutions of modern
society (Castells 1998, 2001).
Religion and religious prophecies can affect the culture in still more
radical ways because they impinge directly on the value system (Wuthnow
1987, 1998). Weber's theory of social change focuses on the history of reli
gion and, specifically, on the role of charisma and charismatic prophecy as
forces capable of breaking through the limits of reality, as hitherto known,
and providing the impetus necessary to dismantle the existing social order
and rebuild it on a new basis. The influence of the Protestant Reformation,
especially Calvinism, in revolutionizing economic life in western Europe is
perhaps the best-known illustration of the effects that charismatic proph
ecy can have on society (Weber [1922] 1964; [1915] 1958). The advent of charismatic prophecy capable of revolutionizing the value
system and, hence, an entire civilization occurs after a long period of his
torical gestation, but this does not prevent it from having immediate and
profound consequences once it bursts onto the scene. After Calvinism had
transformed the social order of much of western Europe, historians had
little difficulty in tracing the concatenation of events that led to it. But they would not have bothered to engage in such an exercise had Luther not
nailed his 95 theses at Wittenberg and had Calvin not risen to power in
Geneva. Post-hoc reconstruction of revolutionary social change can always be "evolutionary."
For those who dismiss the role of religious charisma as a thing of the
past, one need only point to the decisive influence that Evangelical Chris
tianity continues to have in transforming large portions of American soci
ety (Wuthnow 1998; Roof 1999) and to the emergence of a fundamentalist
Alejandro Portes 251
brand of Islam set on ultimate confrontation with the West. The "war on
terrorism" that is today the overriding concern of states in North America
and Europe is interpretable as a direct consequence of a reenergized, char
ismatic religious prophecy seeking to remake the world in its own image
(Kastoryano 2004; Kepel 1987).
Revolutionary change can also occur in the realm of social structure, as when power is wrested from its current possessors and vested in a new
elite. The question of power and of class struggles has been addressed by a
long line of historians and social scientists, classic and contemporary. Vilfredo
Pareto's ([1902] 1966) theory of the circulation of elites and his remark
that "history is but a graveyard of aristocracies" focus on the fact that domi
nant groups have never been able to maintain power indefinitely and on
the analysis of the mechanisms leading to their demise. From very different
theoretical quarters, Marx privileged the class struggle and, at a deeper level,
the conflict between new modes of production and entrenched "social rela
tions of production" as the master mechanisms leading to revolutionary
change. For Marx and his numerous followers, the internal contradictions
of feudalism that brought about its end were being recreated anew under
capitalism, as rising social classes clashed with the dominant class structure.
Thus, "what the bourgeoisie creates above all are its own gravediggers" (Marx and Engels [1847] 1959: 20).
Much of contemporary historical sociology?including the writings of
Barrington Moore (1966), Theda Skocpol (1979), Charles Tilly (1984), Im
manuel Wallerstein (1974, 1991), and Giovanni Arrighi (1994)?is concerned
with the same question of revolutionary change and elite replacement. To
take one example, Skocpol's theory of social revolutions highlights inter
elite conflict, external military pressure, and an oppressed peasantry as fac
tors that, when coming together, can drastically transform the class struc
ture and bring about a new social order. While structural change of this
magnitude occurs after a lengthy concatenation of events, this is only made
evident by the moment of social explosion itself and the ensuing events.
Had Louis XVI not made the fateful decision to convene the Estates General, he could have continued residing in Versailles undisturbed, and reams of
historical accounts about the origins of the French Revolution would not
have been written.
Seen from the perspective of the profound consequences wrought by transformations in a society's value system or class structure, a theory of
change based on path dependence and cultural diffusion looks limited in
deed. Change?whether revolutionary or not?at deeper levels of the cul
ture and social structure filters upward to the more visible levels, including institutions and organizations. Thus it is possible to distinguish at least five
forces impinging on institutions and leading to their transformation: path
dependence, producing evolutionary change at the more visible institutional
252 Institutions and Development
level; diffusion, also leading to evolutionary and sometimes "punctuated"
change at the intermediate levels of culture; scientific/technological break
throughs affecting the cultural skills repertoires and normative order; at a
deeper level, charismatic prophecy?religious or secular?capable of trans
forming the value system and, hence, the rest of the culture; and inter-elite
and class struggles with the potential for transforming the distribution of
power. The last three sources hold the potential for profound institutional
change, of the type seen in the aftermath of social revolutions and epoch
making inventions.
Figure 4 graphically summarizes this discussion. Campbell (2004) con
cludes his review of institutional change by recommending that we con
sider such processes only within well-limited time frames and "in its mul
tiple dimensions." These recommendations are unobjectionable, but do not
go far enough. While limited time frames prevent infinite regress into his
tory, they do not distinguish between evolutionary change over a given
period and abrupt, revolutionary transformations. Similarly, the "multiple dimensions" to be considered in the analysis of change are left unspecified.
A conceptual framework such as that outlined in Figure 4 helps to
distinguish between different elements of culture and social structure and
the relative impact of processes of change taking place at different levels.
An institutional analysis of change limited to institutions themselves pro duces an impoverished account of these processes, relative to what the so
cial sciences in general and sociology in particular have already accomplished.
FIGURE 4 Levels and forces of change_
Level CULTURE
Deep Values
Intermediate aKms
repertoires
Norms
Visible (individuals) Roles ^
Visible (collective) Institutions
Forces of
change
Charisma/
charismatic
prophecies
Scientific/
technological innovations
Cultural
diffusion
Path
dependence
SOCIAL
STRUCTURE
Power
Class structures
Status
hierarchies
Organizations
Forces of
change
Class struggles and inter-elite
competition
Path
dependence
Alejandro Portes 253
Fertility transitions
As an integral part of social science, demography has been centrally con
cerned with the question of change. In particular, the issue of fertility transitions has occupied theorists in this field to the point that Charles
Hirschman (1994) complained that a single-minded focus on this ques tion had diverted attention from other important demographic phenom ena. Karen Mason (1997) replied that, while this may be true, the ques tion of fertility transition has been the "bread and butter" of demographic
theorizing and a good point of departure for a systematic analysis of popu lation change. Mason performed the spadework of reviewing all major theories of fertility transition?from the "classic" view of urbanization and
industrialization as the key causal factors (Notestein 1953) to more re
cent "ideational" theories that emphasize the effect of diffusion on the
family normative system and its knowledge of means of birth control
(Cleland and Wilson 1987). Mason finds fault with all these theories, noting, among other prob
lems, their failure to specify the temporal scope of their predictions and
their lack of proper attention to the mortality declines that generally pre cede fertility transitions. She notes accurately that the forces impinging on
the process are multiple and that seeking to identify a single major cause
dooms theories to failure. She then advances a complex "interactive" model
in which such factors as "acceptable number of surviving children" and "low
ered costs of prenatal controls" bear on individual perceptions, leading to a
modified calculus among families about the feasibility and convenience of
implementing fertility controls.
As a descriptive model, Mason's account is unobjectionable; as a pre dictive theory, however, it suffers the fatal flaw of failing to specify the forces
that set the process into motion in the first place. Recast in the conceptual framework outlined in the preceding sections (Figures 1 and 4), changes in
"acceptable number of children" are changes in values, and "lowered costs
of prenatal controls" are changes in the cultural skills repertoire. The ques tion then is what factors produced these changes, for values and cultural
skills do not transform themselves. If the answer were to be "cultural diffu
sion," the question would simply shift to what factors determined change in those geographic regions and societies from which the new values and
skills emanated in the first place. Robert Pollak and Susan Watkins (1993) cover much of the same ter
rain, but with an emphasis on orthodox economic theory and its attempts to cope with fertility transitions. These attempts mostly seek to fit a major, discontinuous process of change into an inflexible model concerned with
individual cost-benefit calculations under the assumption of stable prefer ences. To the contrary, institutional schools of every stripe recognize that
254 Institutions and Development
this model is insufficient for the analysis of both stability and change at the
macro-social level. Pollak and Watkins's essay performs the useful service
of highlighting the shortcomings of both standard neoclassical economics
and "bounded rationality" models that seek to incorporate the effects of
factors such as diffusion and culture.
"Economists in mufti" (Pollak and Watkins 1993: 481) have come to
recognize that preferences are not stable and that things like "aspirations,"
"attitudes," and "values" affect them. When they turn to culture for an an
swer, the results are not impressive because the definition of this area of
social life remains utterly vague. Some economists define culture as a pool of ideas from which individuals can sample; others as evaluative conversa
tions constructed on the basis of tradition; still others, closer to North, as a
set of constraints within which economic actors maximize utilities (ibid.:
484-485). With such inadequate conceptual tools, it is not difficult to see
why economists have failed to unravel the determinants of fertility transi
tions, just as they have seldom gone beyond institutional monocropping in
attempts to promote national development. Missing is a systematic under
standing of the different components of culture, their interrelationships, and
the causal forces impinging on them at various levels.
Geoffrey McNicoll (1980, 1992, 2001) has provided succinct reviews
of the theoretical controversies over fertility transitions and the more re
cent contributions to these debates. Like Pollak and Watkins, he does not
advance a theory of his own, but in an early article he explicitly endorsed
an institutionalist approach to the problem, writing that "careful analysis of
institutional settings, covering both statics and dynamics, can produce quite
convincing explanations of fertility levels and trends" (McNicoll 1980: 444). He approvingly cites Ben-Porath's (1980) then-novel attempt to model fer
tility transitions within the framework of the economics of transaction costs,
where "the family is seen as a social device for minimizing (over the long
run) a broad array of transaction costs" (ibid.: 455).
Unfortunately, this appeal for institutional analysis comes without an
explicit definition of what institutions are, or of what their relationships
may be with other elements of social life. Instead, McNicoll offers a series of
case studies delineating how fertility transition occurred (or did not occur) in places like China, Bali, and Bangladesh. Although interesting, this de
scriptive material does not produce any theoretical innovation, serving only to validate the now familiar nostrum that "institutions (whatever they are)
matter." The observation was probably novel at the time it was penned, but
the assertion that the cause of fertility transitions depends on the particu larities of each local context does not take us far.
About the same time, John Caldwell (1980) published an essay that
advanced a genuine theory of fertility transitions. From a logic-of-science
standpoint, Caldwell's is the most compelling argument reviewed thus far.
Alejandro Portes 255
This is the case not because it is necessarily true, but precisely because it is
falsifiable, as it singles out a real institutional determinant present in mul
tiple contexts. This determinant is the advent of mass public education. In
Caldwell's view, "The direction of the wealth flow between generations is
changed with the introduction of mass education, at least partly because
the relationships between members of the family are transformed as the
morality governing those relationships changes" (Caldwell 1980: 225). The theory possesses several formal advantages over its competitors.
First, it does not simply state that transitions take place when values change or when fertility control becomes possible, but specifies the actual force that
brings about these changes in the culture; second, it does not say that tran
sitions depend on the particular institutional context, but advances a prin
ciple that is generalizable across many such contexts; third, it avoids the
trap in which theories of diffusion fall, by identifying the force that pro duced the early fertility transitions from which new values and skills subse
quently migrated to other societies.
Placed within the conceptual framework of Figure 4, Caldwell's theory
represents a case of changes in one institution (education) bringing about a
major change in another (the family) through multiple effects on the ben
efits/costs calculus concerning children:
[E]ducation increases the cost of children far beyond the fees, uniforms, and
stationery demanded by the school. Schools place indirect demands on fami
lies to provide children with better clothing, better appearance, ... and extras
that will enable the child to participate equally with other school children. But costs go beyond this. School children demand more from their parents than do their illiterate siblings fully enmeshed in the traditional family sys tem and morality, (ibid.: 227)
The same conceptual framework in Figure 4 immediately suggests the
question of what forces produced changes in educational systems in the
first place. Apart from diffusion processes, which may be invoked to ex
plain the adoption of mass education in less developed societies, the ques tion is what precipitated its introduction in the more advanced ones.
Caldwell was so preoccupied with demonstrating the universality of the
mass education/fertility connection that he largely neglected this funda
mental issue, although here and there glimpses appear of what the full
theory would look like.
First, the campaign for universal education, like the campaign for uni
versal suffrage, was an integral part of the class struggle that in England (in
particular) and western Europe (in general) pitted the industrial working class against the capitalist bourgeoisie. Once democracy was established and
the right to vote extended to all citizens, it was but one step to the recogni
256 Institutions and Development
tion by the elites that those newly enfranchised voters had to be made liter
ate (ibid.: 226). Still more important was the western European competitive state sys
tem and the growing awareness among national elites that states with an
educated populace gained significant advantages, both technologically and
militarily. The rapid Prussian ascent during the nineteenth century and
Prussia's decisive victory over France in 1870 played a key role in these
changed perceptions:
In Prussia, Frederick the Great instituted compulsory schooling in 1763.... While
the schooling was not good...it had sufficient impact to stir the rest of Europe,
especially after the Franco-Prussian War of 1870, and was a much-quoted pre
cedent in the struggle elsewhere for universal schooling, (ibid.: 233)
Thereafter, no governing elite in the European system could afford to
ignore this precedent and still dream of retaining its place in the competi tive interstate struggle. Compulsory education became a raison d'Etat. In
the more industrially advanced countries, its implementation was aided by the mobilization of the urban working class pressing for the same outcome
from below, but even in the countries of Europe's southern and eastern
peripheries, autocratic governments had to yield to the inevitable.
This expanded version of Caldwell's theory is graphically summarized
in Figure 5. It not only provides a plausible causal interpretation of the forces
FIGURE 5 Expanded version of Caldwell's theory of fertility transitions_
Level of causality
Basic: Structural power struggles
Intermediate: Institutional change
Immediate demographic outcomes:
Events
I. Intrastate class II. Interstate competition in
struggles in early the nineteenth-century industrialized countries European system
\ / III. State decisions to transform the
educational system: Advent of
compulsory mass education
IV. Families transformed as inter
generational wealth flows were
reversed i
V. Families take steps to reduce
natality
VI. Fertility transitions launched
Alejandro Portes 257
leading to the outcome of interest, but it is congruent with the previous
analysis of change in recognizing that: 1) institutions do not revolutionize
themselves; and 2) major institutional transformations depend on deeper levels of the culture and the social structure. In the present case, the dy
namics of intrastate class struggles and interstate competition were the fac
tors propelling one country after another to implement major changes in
their educational systems, which (according to Caldwell) transformed the
institution of the family by reversing the traditional offspring-to-parents wealth flows. While the theory may be falsified, it places us on a solid foot
ing to understand how major processes of change come about and, in par
ticular, what led to cascading fertility transitions.
Conclusion
Disciplinary myopia is perhaps inevitable as new generations of scholars
seek to make their mark in the world. The unfortunate consequence, how
ever, is the rediscovery or re-elaboration of what had already been found
in earlier times.
Advocates of the "institutions are everything" approach may reply that
the conceptual framework proposed in this essay is dated since it is largely based on the work of nineteenth- and early-twentieth-century precursors.
They may add that there has been progress since then, and that "thin insti
tutionalism"?a loose definition of the concept of institutions?is more flex
ible and, for that reason, preferable in many circumstances. To this I reply that progress is indeed desirable but that, with the exception of debunking the patently implausible assumptions of neoclassical economics, neoinsti
tutionalism is still far from achieving its potential. I would attribute this
failure, first, to the neglect of a rich theoretical heritage and, second, to care
less definitions. It is impossible to cumulate scientific knowledge when the
master concepts can mean practically anything. No better conceptual frame
work has been developed to replace that which is our legacy from earlier
generations of thinkers and researchers. For that reason alone, thick insti
tutionalism?a precise definition of the concept placed within a systematic framework?is preferable as the basis for future progress.
I hasten to add that the theoretical synthesis presented here is tenta
tive and subject to modification. I claim no intrinsic truth for it, save its
utility for delimiting the scope of the concept of institutions and for moving us away from an impoverished understanding of social change. The excur
sion into fertility transitions in demography may provide the basis to evalu
ate the logical character of alternative explanations of social change and
the extent to which they represent true hypotheses rather than truisms or
hyped descriptions.
258 Institutions and Development
Note
This is a revised version of a paper presented at the conference on Economic Sociology,
meetings of the Eastern Sociological Society,
Washington, DC, 19 March 2005.1 thank the
discussants at the session, Victor Nee and Ri
chard Swedberg, for their valuable comments.
I also acknowledge the useful comments and
suggestions of Paul DiMaggio, Douglas Massey, Mauro Guillen, and Christopher Young.
References
Agarwala, Ri?a. 2004. "From work to welfare: The state and informal workers' organizations in
India," Working Paper #04-07, Center for Migration and Development, Princeton Uni
versity.
Ariza, Marina and Juan Manuel Ramirez. 2005. "Urbanizaci?n, mercados de trabajo y escenarios
sociales en el Mexico finisecular," in A. Portes, B. R. Roberts, and A. Grimson (eds.), Las
Ciudades Latinoamericanas a Comienzos del Siglo. Buenos Aires: Prometeo Editores, pp. 299
361.
Arrighi, Giovanni. 1994. The Long Twentieth Century: Money, Power, and the Origins of Our Times.
London: Verso.
Baiocchi, Gianpaolo. 2003. Radicals in Power: The Workers' Party (PT) and Experiments in Urban
Democracy in Brazil. London: Zed.
Bellah, Robert N. 1958. "Religious aspects of modernization in Turkey and Japan," American
Journal of 'Sociology 64: 1-5.
Ben-Porath, Yoram. 1980. "The F-connection: Families, friends, and firms and the organization of exchange," Population and Development Review 6: 1-30.
Bendix, Reinhard. 1962. Max Weber: An Intellectual Portrait. Garden City, NY: Anchor Books.
Bourdieu, Pierre. 1979. "Les trois ?tats du capital culturel," Actes de la Recherche en Sciences Sociales
30: 3-6.
-. 1984. Distinction: A Social Critique of the Judgment of Taste. Cambridge, MA: Harvard Uni
versity Press.
-. 1985. "The forms of capital," in J. G. Richardson (ed.), Handbook of Theory and Research
for the Sociology of Education. Westport, CT: Greenwood Press, pp. 241-258.
-. 1990. The Logic of Practice. Stanford: Stanford University Press.
Caldwell, John C. 1980. "Mass education as a determinant of the timing of fertility decline,"
Population and Development Review 6: 225-255.
Campbell, John L. 2004. Institutional Change and Globalization. Princeton, NJ: Princeton Univer
sity Press.
Castells, Manuel. 1998. End of Millennium: The Information Age. Oxford: Blackwell Publishers.
-. 2001. The Internet Galaxy. New York: Oxford University Press.
Centeno, Miguel A. 1994. Democracy Within Reason: Technocratic Revolution in Mexico. University
Park, PA: Pennsylvania State University Press.
Cleland, John and Christopher Wilson. 1987. "Demand theories of the fertility transition: An
iconoclastic view," Population Studies 41: 5-30.
Cooley, Charles H. 1902. Human Nature and the Social Order. New York: Scribner.
-. 1912. Social Organization. New York: Charles Scribner's Sons.
Cottrell, Leonard S. 1933. "Roles and marital adjustment," Publications of the American Sociological
Society #28.
Dalton, Melville. 1959. Men Who Manage: Fusions of Feeling and Theory in Administration. New
York: Wiley. De Janvry, Alain and Carlos Garramen. 1977. "Laws of motion of capital in the center-periph
ery structure," Review of Radical Political Economics 9: 29-38.
Delgado Wise, Raul. 2005. "The relation between Mexico-U.S. economic integration and inter
Alejandro Portes 259
national migration under NAFTA," paper presented at the CUMBRE 2005 Conference,
Office of Latino and Latin American Studies, University of Nebraska-Omaha, 22 April.
DiMaggio, Paul. 1990. "Cultural aspects of economic action and organization," in R. Friedland
and A. F. Robertson (eds.), Beyond the Marketplace: Rethinking Economy and Society. New
York: Aldine de Gruyter, pp. 113-136.
Dolsak, Nines and Elinor Ostrom. 2003. The Commons in the New Millennium: Challenges and Ad
aptation. Cambridge, MA: MIT Press.
Durkheim, Emile. [1897] 1965. Suicide, A Study in Sociology. Translated by J. A. Spaulding and G.
Simpson. New York: Free Press.
-. 11901] 1982. The Rules of the Sociological Method. Translated by W. D. Halls. New York:
Free Press.
Eckstein, Susan. 1977. The Poverty of Revolution: The State and the Urban Poor in Mexico. Princeton,
NJ: Princeton University Press.
Elster, Jon, Claus Of fe, and Ulrick K. Preuss. 1998. Institutional Design in Post-Communist Societies:
Rebuilding the Ship at Sea. Cambridge: Cambridge University Press.
Evans, Peter. 1979. Dependent Development: The Alliance of Multinational, State, and Local Capital in
Brazil. Princeton, NJ: Princeton University Press.
-. 1989. "Predatory, developmental, and other apparatuses: A comparative political
economy perspective on the third world state," Sociological Forum 4: 561-587.
-. 1995. Embedded Autonomy: States and Industrial Transformation. Princeton, NJ: Princeton
University Press.
-. 2004a. "Development as institutional change: The pitfalls of monocropping and the
potentials of deliberation," Studies in Comparative International Development 38: 30-52.
-. 2004b. "The challenges of the 'institutional turn': Interdisciplinary opportunities in de
velopment theory," in V. Nee and R. Swedberg (eds.), The Economic Sociology of Capitalist Institutions. Princeton, NJ: Princeton University Press.
Giddens, Anthony. 1993. New Rules of Sociological Method: A Positive Critique of Interpretative Sociolo
gies. 2nd Edition. Stanford: Stanford University Press.
Goffman, Erving. 1959. The Presentation of Self in Everyday Life. Garden City, NY: Doubleday. -. 1961. Encounters: Two Studies in the Sociology of Interaction. Indianapolis, IN: Bobbs-Merrill.
Goode, William J. 1960. "A theory of role strain," American Sociological Review 25: 483-496.
Gramsci, Antonio. [1927-33] 1971. "State and civil society," in Q. Hoave and G. N. Smith (eds. and trans.), Prison Notebooks. New York: International Publishers, pp. 206-276.
Granovetter, Mark. 1985. "Economic action and social structure: The problem of embeddedness,"
American Journal of Sociology 91: 481-510.
-. 1992. "The sociological and economic approaches to labor market analysis: A social
structural view," in M. Granovetter and R. Swedberg (eds.), The Sociology of Economic Life.
Boulder, CO: Westview Press, pp. 233-263.
-. 2001. "Coase revisited: Business groups in the modern economy," in M. Granovetter
and R. Swedberg (eds.), The Sociology of Economic Life, 2nd edition. Boulder, CO: Westview
Press, pp. 327-356.
Grusky, David B. and Jesper B. Sorensen. 1998. "Can class analysis be salvaged?," American
Journal of'Sociology 103: 1187-1234.
Haggard, Stephan. 2004. "Institutions and growth in East Asia," Studies in Comparative Interna
tional Development 38: 53-81.
Hamilton, Gary and Nicole W. Biggart. 1988. "Market, culture, and authority: A comparative
analysis of management and organization," American Journal of Sociology 94 (Supplement): 552-594.
Hirschman, Albert O. 1958. The Strategy of Economic Development. New Haven, CT: Yale Univer
sity Press.
-. 1963. Journeys Toward Progress. New York: Twentieth Century Fund.
Hirschman, Charles. 1994. "Why fertility changes," Annual Review of Sociology 20: 203-233.
Hodgson, Geoffrey M. 2002. "Institutional blindness in modern economics," in J. R.
260 Institutions and Development
Hollingsworth, K. H. Muller, and E. J. Hollingsworth (eds.), Advancing Socio-economics: An
Institutionalist Perspective. Landham, MD: Rowman and Littlefield, pp. 147-170.
Hoff, Karla and Joseph Stiglitz. 2001. "Modern economic theory and development," in G. Meier
and J. Stiglitz (eds.), Frontiers of Development Economics. New York: Oxford University Press,
pp. 389-160.
Hollingsworth, J. Rogers. 2002. "On institutional embeddedness," in J. R. Hollingsworth, K. H.
M?ller, and E. J. Hollingsworth (eds.), Advancing Socio-economics: An Institutionalist Perspec tive. Landham, MD: Rowman and Littlefield, pp. 87-107.
Hout, Michael, Clem Brooks, and Jeff Manza. 1993. "The persistence of classes in post-indus trial societies," International Sociology 8: 259-277'.
Kastoryano, Riva. 2004. "Religion and incorporation: Islam in France and Germany," Interna
tional Migration Review 38: 1234-1255.
Kepel, Gilles. 1987. Les Banlieues de l'Islam: naissance d'une religion en France. Paris: Editions du
Seuil.
Lerner, David. 1958. The Passing of Traditional Society: Modernizing the Middle East. New York: Free
Press.
Levy, Marion. 1966. Modernization and the Structure of Societies. Princeton, NJ: Princeton Univer
sity Press.
Linton, Ralph. 1945. The Cultural Background of Personality. New York: Appleton, Century, Crofts.
Lomnitz, Larissa. 1982. "Horizontal and vertical relations and the social structure of urban
Mexico," Latin American Research Review 17: 51-74.
Maclver, Robert H. and Charles H. Page. [1949] 1961. Society: An Introductory Analysis. New York:
Rinehart.
MacLeod, Dag. 2004. Downsizing the State: Privatization and the Limits of Neoliberal Reform in Mexico.
University Park, PA: Pennsylvania State University Press.
Marx, Karl. [1867] 1967. Capital. Volume III. New York: International Publishers.
-. [1939] 1970. The Grundrisse, edited and translated by D. McLellan. New York: Harper and Row.
Marx, Karl and Friedrich Engels. [1847] 1959. "Manifesto of the Communist Party," in L. S.
Fewer (ed.), Marx and Engels: Basic Writings on Politics and Philosophy. Garden City, NY:
Doubleday, pp. 1-41.
Mason, Karen Oppenheimer. 1997. "Explaining fertility transitions," Demography 34: 443-454.
McNicoll, Geoffrey. 1980. "Institutional determinants of fertility change," Population and Devel
opment Review 6: AAX-A62.
-. 1992. "Changing fertility patterns and policies in the third world," Annual Review of
Sociology 18: 85-108.
-. 2001. "Government and fertility in transitional and post-transitional societies," Popula tion and Development Review 27 ( Supp. ) : 129-159.
Merton, Robert K. 1936. "The unanticipated consequences of purposive social action," Ameri
can Sociological Review 1: 894-904.
-. 1957. "The role-set: Problems in sociological theory," British Journal of Sociology 8: 106-120.
-. 1968a. "Manifest and latent functions," in R. K. Merton (ed.), Social Theory and Social
Structure. New York: Free Press, pp. 73-138.
-. 1968b. Social Theory and Social Structure. Enlarged edition. New York: Free Press.
-. 1968c. "Social structure and anomie," in R. K. Merton (ed.), Social Theory and Social
Structure. New York: Free Press pp. 175-214.
-. 1989. "Unanticipated consequences and kindred sociological ideas: A personal gloss," in C. Mongardini and S. Tabboni (eds.), L'opera diR. K. Merton e la sociolog?a contempor?nea.
Genova, Italy: ECIG, pp. 307-329.
Meyer, John, John Boli, George M. Thomas, and Francisco Ramirez. 1997. "World society and
the nation state," American Journal of Sociology 103: 144-181.
Meyer, John and Michael T. Hannan. 1979. National Development and the World System: Educa
tional, Economic, and Political Change, 1950-1970. Chicago: University of Chicago Press.
Mills, C. Wright. 1959. The Power Elite. London: Oxford University Press.
Alejandro Portes 261
Moore, Barrington. 1966. Social Origins of Dictatorship and Democracy. Boston: Beacon Press.
Morrill, Calvin. 1991. "Conflict management, honor, and organizational change," American Jour
nal of Sociology 97: 585-621.
Nee, Victor. 2005. "The new institutionalisms in economics and sociology," in N. J. Smelser and
R. Swedberg (eds.), The Handbook of Economic Sociology, 2nd edition. Princeton, NJ: Prince
ton University Press and Russell Sage Foundation, pp. 49-74.
Nee, Victor and Paul Ingram. 1998. "Embeddedness and beyond: Institutions, exchange, and
social structure," in M. C. Brinton and V. Nee (eds.), The New Institutionalism in Sociology.
Stanford, CA: Stanford University Press, pp. 19-45.
Newcomb, Theodore M. 1950. Social Psychology. New York: Holt, Rinehart, and Winston.
Newcomb, Theodore M., Ralph H. Turner, and Philip E. Converse. 1965. Social Psychology: The
Study of Human Interaction. New York: Holt, Rinehart, and Winston.
North, Douglass C. 1990. Institutions, Institutional Change, and Economic Performance. Cambridge:
Cambridge University Press.
Notestein, Frank W. 1953. "Economic problems of population change," in Proceedings of the Eighth International Conference of Agricultural Economists. London: Oxford University Press, pp. 13
31.
O'Donnell, Guillermo. 1994. "The state, democratization, and some conceptual problems," in
W. C. Smith, C. H. Acu?a, and E. A. Gamarra (eds.), Latin American Political Economy in the
Age of Neoliberal Reform. New Brunswick, NJ: Transaction, pp. 157-179.
Ostrom, Elinor. 1990. Governing the Commons: The Evolution of Institutions for Collective Action. Cam
bridge: Cambridge University Press.
Ostrom, Elinor et al. 2002. The Drama of the Commons. Washington, DC: National Academy Press.
Pareto, Vilfredo. [1902] 1966. "Les syst?mes socialistes," in S. E. Finer (ed.), Vilfredo Pareto: So
ciological Writings. New York: Praeger, pp. 123-142.
Pollak, Robert A. and Susan Cotts Watkins. 1993. "Cultural and economic approaches to fertil
ity: Proper marriage or m?salliance?," Population and Development Review 19: 467-496.
Portes, Alejandro. 1997. "Neoliberalism and the sociology of development: Emerging trends
and unanticipated facts," Population and Development Review 23: 229-259.
-. 2000a. "The resilient significance of class: A nominalist interpretation," Political Power
and Social Theory 14: 249-284.
-. 2000b. "The hidden abode: Sociology as analysis of the unexpected," American Sociologi cal Review 65: 1-18.
Poulantzas, Nicos. 1975. Classes in Contemporary Capitalism. London: New Left Books.
Powell, Walter W. 1990. "The transformation of organizational forms: How useful is organiza tion theory in accounting for social change?," in R. Friedland and A. F. Robertson (eds.),
Beyond the Marketplace: Rethinking Economy and Society. New York: Aldine de Gruyter, pp. 301-329.
Roberts, Bryan R. and Alejandro Portes. 2005. "Coping with the free market city: Urban collec
tive action in Latin America, 1980-2000," Report. Austin: Princeton-Texas Urbanization
Project.
Roberts, Kenneth. 2002. "Social inequalities without class cleavages in Latin America's neoliberal
era," Studies in Comparative International Development 36: 3-33.
Roland, G?rard. 2004. "Understanding institutional change: Fast-moving and slow-moving in
stitutions," Studies in Comparative International Development 38: 109-131.
Roof, Wade Clark. 1999. Spiritual Marketplace: Baby Boomers and the Remaking of American Reli
gion. Princeton, NJ: Princeton University Press.
Sassen, Saskia. 1988. The Mobility of Labor and Capital: A Study in International Investment and La
bor Flow. New York: Cambridge University Press.
Sen, Amartya. 1999. Development as Freedom. New York: Alfred A. Knopf.
Shaiken, Harley. 1990. Mexico in the Global Economy. San Diego: Center for U.S.-Mexican Stud
ies, University of California.
-. 1994. "Advanced manufacturing and Mexico: A new international division of labor?,"
Latin American Research Review 29: 39-72.
262 Institutions and Development
Simmel, Georg. [1908] 1964. "The stranger," in K. H. Wolff (ed. and trans.), The Sociology of
Georg Simmel. New York: Free Press, pp. 402-408.
Skocpol, Theda. 1979. States and Social Revolutions: A Comparative Analysis of France, Russia, and
China. Cambridge: Cambridge University Press.
Sumner, William G. 1907. Folkways. Boston: Ginn Company.
Swidler, Ann. 1986. "Culture in action: Symbols and strategies," American Sociological Review 51:
273-286.
Thelen, Kathleen. 2004. How Institutions Evolve: The Political Economy of Skills in Germany, Britain,
the United States, and Japan. New York: Cambridge University Press.
Tilly, Charles. 1984. The Contentious French: Four Centuries of Popular Struggle. Cambridge, MA:
Harvard University Press.
Veblen, Thorstein. [1899] 1998. The Theory of the Leisure Class. Amherst, NY: Prometheus Books.
Wallerstein, Immanuel. 1974. The Modern World-System: Capitalist Agriculture and the Origins of the
European World-Economy in the Sixteenth Century. New York: Academic Press.
-. 1991. Geopolitics and Geoculture: Essays on the Changing World-System. Cambridge: Cam
bridge University Press.
Weber, Max. [1904] 1949. The Methodology of the Social Sciences. Translated by E. A. Shils and H.
A. Finch. New York: Free Press.
-. [1915] 1958. "Religious rejections of the world and their directions," in H. H. Gerth and
C. Wright Mills (eds.), From Max Weber: Essays in Sociology. New York: Oxford University
Press, pp. 323-359.
-. [1922] 1947. "Social stratification and class structure," in T. Parsons (ed.), The Theory of Social and Economic Organization. New York: Free Press pp. 424-429.
-. [1922] 1964. The Sociology of Religion. Translated by E. Fischoff. Boston: Beacon Press.
Williamson, Oliver. 1975. Markets and Hierarchies. New York: Free Press.
-. 1985. The Economic Institutions of Capitalism. New York: Free Press.
Wright, Erik O. 1980. "Varieties of Marxist conceptions of class structure," Politics and Society 9:
299-322.
-. 1985. Classes. London: Verso.
Wright, Erik O. and Luca Perrone. 1976. "Marxist class categories and income inequality," Ameri
can Sociological Review 42: 32-55.
Wuthnow, Robert. 1987. Meaning and Moral Order: Explorations in Cultural Analysis. Berkeley, CA: University of California Press.
-. 1998. After Heaven: Spirituality in America since the 1950s. Berkeley, CA: University of Cali
fornia Press.
Zelizer, Viviana. 2005. "Culture and consumption," in N. J. Smelser and R. Swedberg (eds.), The Handbook of Economic Sociology, 2nd edition. Princeton, NJ: Princeton University Press
and Russell Sage Foundation, pp. 331-354.