democratic institutions based on stable economic growth were being criticized and
challenged in the 1970 s as they had not been since the 1940 s.
Increasingly loud criticism of institutions that had long been taken for granted
(particularly those concerned with regulation, money supply, and social welfare)
now provoked questions that intrigued a generation of scholars: why had those
institutions been created, how had they evolved to reach this point, and why were
they no longer adapting successfully to changing needs? How, in other words, had
the stable, adaptive path dependence of Western institutions come to experience
operational crisis and undermined conWdence in the ideas and processes on which
they were founded? And how did the diVerent sets of national institutions diVer in
the way they accommodated to the new economy of the late twentieth century?
That it raised such questions should not imply thatWnding the answers has been
easy for HI, as the approach lends itself much better to the study of incremental
growth around an original path than to sudden, drastic change.
2 The Epistemology of Historical
Institutionalism and its Competitors
.........................................................................................................................................................................................
The search for the causes and agents of institutional change has had many
epistemological consequences, not least of which was a new attention to ideas. In
steady state, the ideas and assumptions that institutions incorporate tend to be taken
for granted. But in times of crisis, new ideas are put forward andWnd adherents. In
economics, the ideational turn of the 1970 s and 1980 s discredited Keynsianism and
promoted contending arguments mainly associated with the ‘‘Chicago School.’’ The
new paradigm incorporated neoclassical theories about the greater eYciency of
minimally regulated markets, and new theories about money supply (Eisner 1991 ;
Hall 1989 ). In political science, a revived inXuence of economic ideas—pioneered
after the Second World War by Kenneth Arrow, Mancur Olson, and Anthony
Downs—augmented the popularity of a rational choice paradigm (RC) focused on
individual preferences and utility maximizing strategies. (See Shepsle, this volume.)
But, somewhat paradoxically, there was, at roughly the same time, a rebellion of
social scientists and historians against the individual centered behaviorism that had
dominated political science (most completely in the United States), and against its
dominant paradigm, pluralism (see esp. Lowi 1969 ). The ‘‘normal’’ political science
of the 1950 s and 1960 s, focused on contemporary (but well established) interest
groups and individual attitudes (as measured by survey responses), was of little
historical institutionalism 41