Understanding Institutions and

Logics of Appropriateness:
1
Introductory Essay

Johan P. Olsen

Working Paper
No. 13, August 2007

Working Papers can be downloaded from the ARENA homepage:

http://www.arena.uio.no
A Perspective on Political Life
This section presents three landmark articles that are part of a research agenda launched more
than twenty years ago. Then, “The New Institutionalism: Organizational Factors in Political Life”
invited a reappraisal of how political institutions could be conceptualized, to what degree
institutions have independent and endurable implications, the kinds of political phenomena
they impact, the mechanisms through which they do so, and the processes through which
institutions emerge, are maintained, and change. Since then, the original contribution has
been elaborated in several publications.2 In contrast to much of the work in organization
studies, the focus has been on political, rather than economic, organizations.

“The new institutionalism” offers a perspective on how political life is organized,

functions and changes in contemporary democracies. The term includes a set of
theoretical ideas, assumptions and hypotheses concerning the relations among
institutional characteristics, political agency, performance, and institutional change, and
the wider social context of politics. In contrast with an older institutionalism that used
formal-legal rules as proxies for political action, the new institutionalism is behavioral.
Theoretical ideas are required to be consistent with empirical observations.

The institutional approach supplements and competes with two other interpretations of
democratic politics and government. First, a rational actor perspective which sees
political life as organized by exchange among calculating, self-interested actors
maximizing their expected utility. Second, a society-centered perspective that sees
political institutions and behavior as arising from societal forces, rather than society
being governed by politics. One version gives primacy to macro economic,
technological, and social change. Another interprets politics as organized by shared
world-views in a community of culture, history and fate.

Reproduction of this text is subject to permission by the author.

© Arena 2007

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These perspectives focus attention on different actors, mechanisms and explanatory
factors, and they differ when it comes to what contribution to the flow of history is
attributable to political institutions and actors. The key distinctions are (a) the extent to
which political institutions are seen as having some degree of autonomy and
independent effects, and (b) the extent to which a perspective pictures institutionalized
rules and identities as being reproduced with some reliability, at least partly independent
of deliberate design and reform efforts, as well as of environmental stability or change.

Basic Ideas
Core assumptions of the new institutionalism are that political institutions create
elements of order and predictability in political life, have durable and independent
effects, and some robustness towards individual actors and environments.

An institution is an enduring collection of rules and organized practices, embedded in

structures of meaning and resources that are relatively invariant in the face of turnover
of individuals and changing external circumstances. Constitutive rules and repertoires of
standard operating procedures prescribe appropriate behavior for specific actors in
specific situations. Structures of meaning, involving standardization, homogenization
and authorization of common purposes, vocabularies, ways of reasoning and accounts,
give direction to, explain, justify, and legitimate behavioral rules. Structures of resources
create capabilities for acting. Resources are routinely tied to rules and worldviews,
empowering and constraining actors differently and making them more or less capable
of acting according to behavioral codes.

The logic of appropriateness is a perspective on human action. To act appropriately is

to proceed according to the institutionalized practices of a collectivity and mutual
understandings of what is true, reasonable, natural, right, and good. Actors seek to fulfil
the obligations and duties encapsulated in a role, an identity, and a membership in a
political community. Rules are followed because they are perceived to be adequate for
the task at hand and to have normative validity.

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The new institutionalism assumes that political life is not solely organized around policy
making, aggregation of predetermined preferences and resources, and regulation of
behavior and outcomes through external incentives and constraints. Consistent with an
old strand in the study of politics, institutionalism holds that politics involves a search
for collective purpose, direction, meaning, and belonging. In contrast with standard
equilibrium models, assuming that institutions reach a unique organizational form
conditional on current functional and normative circumstances, and thus independent
of their historical path, institutionalism holds that history is “inefficient”. The matching
of institutions, behaviors, and contexts takes time and has multiple, path-dependent
equilibria.

In sum, the basic units of analysis of the new institutionalism are internalized rules and
practices, identities and roles, normative and causal beliefs, and resources; not micro-
rational individuals or macro forces. Institutionalism assumes that the organization of
political life has an independent explanatory power and emphasizes the endogenous
nature and social construction of institutions. A challenge is to provide better
understanding of the processes that translate institutionalized rules into political action
and consequences, and of the processes that translate human action into rules and
institutions. Institutionalists need to explain how such processes are stabilized or
destabilized and identify factors that sustain or interrupt ongoing processes.

Impacts upon Action, Policies and People

Over the last twenty years debates about the significance of formally organized political
institutions has turned into a concern with to what extent, in what respects, through
what processes, under what conditions, and why institutions make a difference. The
organization of political life affects the motivations and capabilities of collectivities and
individuals. Institutions prescribe how authority and power are constituted, exercised,
legitimated, controlled, and redistributed. They empower and constrain actors, define
basic rules for resolving conflicts, and impact the allocation of advantages and burdens.
Institutions create and select actors. They integrate a community and develop affective

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ties among its members (Weaver and Rockman 1993; Egeberg 2003, March and Olsen
2006 a, b).

To the degree that institutions generate beliefs in a legitimate order, they simplify
politics by ensuring that many things are taken as given. Rules and practices specify
what is normal, must be expected, can be relied upon, and what makes sense in a
community. While the blessings of rules are mixed, some of the capabilities of modern
institutions come from their effectiveness in substituting rule-bound behavior for
individually autonomous behavior. Institutions also facilitate sense-making, guide and
stabilize expectations, and dampen conflicts over resource allocations.

This “established wisdom” about the effects of political institutions has, however, been
described as fragile (Rothstein 1996). Causal chains are often complex, long, and
contingent (Weaver and Rockman 1993) and the legitimacy of democratic institutions
is partly based on the expectation that they will provide open-ended processes without
determinate outcomes (Pitkin 1967). Institutions do not determine political action and
results in detail. They constrain and enable outcomes without being an immediate or
direct cause of them. The same organizational arrangement can have different
consequences under different conditions, and different arrangements can produce the
same effects. Two issues arise for the new institutionalism: How are rules of
appropriateness translated into behavior and how do actors become carriers of rules and
practices?

Impacting Behavior and Policies

A key task is to improve the understanding of the conditions under which actors are
motivated and capable of complying with rules of appropriateness, the processes
through which rules are translated into behavior and the factors that strengthen or
weaken the relation between rules and actions.

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In routine situations rule-based action may reflect in an almost mechanical way
prescriptions embedded in constitutions, laws, institution-specific rules, or professional
norms. Defining a role or identity and achieving it can, however, require time and
energy, thought and capability. It is well known, for example from courts of law that
following rules can be a complicated cognitive process involving thoughtful, reasoning
behavior.

Such reasoning is not primarily connected to the anticipation of consequences. Actors

use criteria of similarity and congruence, rather than likelihood and expected value.
The core behavioral proposition of the new institutionalism is that, most of the time
humans take reasoned action by trying to answer three elementary questions: What
kind of a situation is this? What kind of person am I (are we)? What does a person such
as I (we) do in a situation such as this - what kind of behavioral prescriptions follow
from matching the facts of the situation with the relevant rules (March and Olsen
1989)?

The clarity and consistency of rules and identities are variables, and so are the familiarity
with and understanding of situations and the behavioral implications of matching rules.
There may be more or less time for analysis and decision making; and when
prescriptions are straightforward, institutionalized authority and resources may be
adequate, or overpowered by non-institutionalized resources and informal processes.

Therefore, actors may have a difficult time interpreting which historical experiences are
relevant for current situations. They may struggle with how to classify themselves and
others -who they are, and what they are- and what the classifications imply in a specific
situation. The problems are in particular challenging when several institutions
structured according to different principles and rules provide competing analyses and
behavioral prescriptions for the same area of action.

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For example, diplomats face competing expectations because diplomacy as an
institution involves a tension between being the carrier of the interests of a specific state
and being a defender of transnational principles, norms and rules maintained and
enacted by representatives of the states in mutual interaction (Bátora 2005). In a
Weberian bureaucracy, often seen as the archetype hierarchical organization, there are
also competing claims to authority and logics of appropriateness, such as following
command rooted in formal position, rule-following based upon laws, and behavior
dictated by professional knowledge, truth-claims or axioms of enlightened government.

Furthermore, adjudication involves an intricate interweaving of rule application,

creation and reinterpretation as new and unfamiliar situations arise (Magnussen 2006).
Policy situations can be defined in different ways that call forth different legitimate
rules, actors and arguments (Ugland 2002), and global prescriptions of administrative
reform have consistently been interpreted and responded to differently depending on
national institutional arrangements, resources and historical traditions (Christensen and
Lægreid 2007).

The possible indeterminacy of rules, roles, identities, and situations requires detailed
observations of the processes through which rules are translated into behavior through
constructive interpretation and available resources. This includes how institutions affect
exposure to and search for information, deliberation and interpretation, codification and
validation of evidence, and memory-building and retrieval; as well as the mechanisms
through which institutions distribute resources and enable actors to follow rules, across
a variety of settings and situations (March and Olsen 1995). There is also a need to
understand how actors become rule-bound.

Fashioning People
The effects of external opportunity and incentive structures on behaviour are directed
and limited by institutions. Institutions are carriers of a polity’s character, history and
visions, and institutions have a potential for fashioning actors’ character, preferences,

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and commitments. Identification is a fundamental mechanism in group integration,
based upon an internalized acceptance of obligations and duties (March and Simon
1958). Actors internalize culturally defined purposes to be sought as well as modes of
appropriate procedures for pursuing purposes, and there is no perfect positive
correlation between political effectiveness and normative validity (Merton 1938).
Legitimacy, therefore, depends not only on showing that actions accomplish
appropriate objectives, but also that actors behave in accordance with appropriate
procedures ingrained in a culture (Meyer and Rowan 1977).

As a result, student of institutions need to study the types of humans selected and
formed by different types of institutions and specify the mechanisms by which different
rules of appropriateness evolve and become legitimized, reproduced, modified, and
replaced. In democratic contexts, there is a special need to explore which mechanisms
and institutional settings transform individuals into law-abiding, consensus- and
compromise-seeking citizens; how elected representatives, bureaucrats, and judges are
turned into office-holders with an ethos of self-discipline, impartiality and integrity; and
how different institutions create different balances between the requirements of offices
and individual calculated interests.

Internalized rules are lessons from experience, encoded by actors drawing inferences
from their experiences, or by differential survival or reproduction rates (March, Schultz
and Zhou 2000). Identities may be strong or weak and there may be competing
institutional and group belongings. Internalization takes place through processes of
education, socialization, explanation, and justification in a variety of institutional
settings, such as ordinary work-situations, political institutions, civil society, and
institutions of higher education. Possibly, the processes and determinants of
identification are not much different from those relevant for interpreting rules, or
institutional dynamics in general.

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Dynamics of Change
Institutions are not static. Change is a constant feature of institutions as they respond to
experience. The scopes and modes of institutionalized activity vary across political
systems, policy areas, and historic time. There are shifts within an existing repertoire of
rules and practices and change of repertoires.

Why then are institutions what they are? Through what processes do institutions and
rules emerge or change and what factors lead to different forms of institutional
integration? What is the role of human action and how do existing institutional
arrangements affect the emergence, reproduction, and transformation of institutions?
Which institutional characteristics favor change or make institutions resistant to change?
The new institutionalism approaches these issues by arguing, first, that history is
“inefficient” and that a task is to identify factors that create inefficiencies in adaptation;
and second, that change is not driven solely by external processes and chocks but that
there is a need to explore intra- and inter-institutional sources of change.

Historical Inefficiency
A standard argument in the literature is that institutions survive and flourish because
they are well adapted to their functional (Goodin 1996, Stinchcombe 2001) or
normative environments (Meyer and Rowan 1977). A democratic ideal is that citizens
and their representatives should be able to design political institutions at will. However,
this democratic ideal is frustrated by Rechtsstaat principles and by limited human
capacity for understanding and control. In practice, actors show limited willingness and
ability to adapt rules and identities on the basis of experience.

Rules develop in response to history, but that development is not uniquely optimal in
any meaningful sense. The new institutionalism argues that key behavioral mechanisms
encoding experience into rules and routines are history-dependent and neither
guarantee improvement nor increasing survival value. Observation and interpretation of
experience and institutional memories, retrieval, and responses are affected by

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institutional arrangements, and adaptation is less continuous and precise than assumed
by standard equilibrium models (March 1981, March and Olsen 1989). A better
understanding of historical inefficiency requires detailed exploration of possible frictions
in processes of institutional design and reform, institutional abilities to adapt
spontaneously to changing circumstances, and environmental effectiveness in
eliminating suboptimal institutions and identities (Olsen 2001).

Reformers are institutional gardeners more than architects and engineers. They
reinterpret codes of behavior, impact causal and normative beliefs, foster civic and
democratic identities and engagement, develop organized capabilities, and improve
adaptability. Still, institutions are defended by insiders and validated by outsiders and
cannot be changed arbitrarily. The more institutionalized an area, the more robust are
institutional structures against reform efforts and environmental change, and resistance is
strongest when change threatens institutional identities (March and Olsen 1983, 1989,
Olsen 2007: Ch.8). This does not imply that institutions always favor continuity over
change, but that the processes of adaptation can sometimes be fast and direct but often
are tortuous.

Intra- and Inter-Institutional Dynamics

Institutions prescribe and proscribe, speed up and delay change, and the assumption that
structures persist unless there are external irritants or shocks, underestimates intra- and
inter-institutional dynamics and sources of change. Change can be driven by explicit
rules, pressures from institutional ideals that can never be fulfilled in practice, internal
loss of faith in institutions and interpreters of appropriateness, and by intra- and inter-
institutional tensions between organizational and normative principles.

While concepts of institution and order assume some internal coherence and
consistency, tensions and disputes are endemic. The principles and rules on which an
institution is constituted are never fully accepted by the entire society and political
orders are never perfectly integrated (Eisenstadt 1965, Goodin 1996). Order is created

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by a collection of institutions that fit more or less into a coherent system and most
political systems function through a mix of co-existing, partly inconsistent
organizational and normative principles, behavioral logics, and legitimate resources
(Orren and Skowronek 2004, Olsen 2007). The coherence of political institutions and
orders varies over time through processes of institutionalization, de-institutionalization,
and re-institutionalization.

Institutionalization implies:
(a) Increasing clarity and agreement about behavioral rules, including allocation of
formal authority. Standardization and formalization of practice reduce
uncertainty and conflict concerning who does what, when and how. As some
ways of acting are perceived as natural and legitimate there is less need for using
incentives or coercion in order to make people follow prescribed rules.
(b) Increasing consensus concerning how behavioral rules are to be explained and
justified, with a common vocabulary, expectations and success criteria. There is
a decreasing need to explain and justify why modes of action are appropriate in
terms of problem-solving and normative validity.
(c) The supply of resources becomes routinized and “taken as given”. It takes less
effort to obtain or mobilize the resources required for acting in accordance with
prescribed rules of appropriate behavior.

Thus, de-institutionalization implies that institutional identities, roles, authority, borders,

explanations and justifications, and resources are contested. There is increasing
uncertainty, disorientation, and conflict. New actors are mobilized. There are demands
for new explanations and justifications of existing practices. Outcomes are more
uncertain, and it is necessary to use more incentives or coercion to make people follow
prescribed rules.

The coherence of an institution or a political order can be threatened by strong

identifications with subunits or roles, and institutions organized upon competing

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principles can create problems for each other. Still, one hypothesis is that democratic
systems work comparatively well because their political orders are not well integrated. In
everyday-life inconsistencies and tensions are buffered by institutional specialization,
separation, autonomy, sequential attention, local rationality, and conflict avoidance
(Cyert and March 1963). Arguably, these mechanisms help democracies cope with
conflicts that create conflicts and stalemates at constitutional moments when demands
for consistency and coherence are stronger (Olsen 2007: Ch.9).

Certain periods are characterized by institutional confrontations (Weber 1978). There

are radical intrusions and attempts to achieve control over other institutional spheres, as
well as stern institutional defense against invasions of alien norms. Changing patterns of
power follow from inter-institutional processes of separation and integration, de-
coupling or re-coupling; as new bridges or walls are built between institutions.

An improved understanding of the dynamics of institutions and identities requires

attention to several “imperfect” and disjointed processes of change, not a focus on a
single mechanism and coherent and dominant process; and the second chapter in this
section explores institutional integration and disintegration by means of an experiential
learning model. Networks transform themselves as participants learn from local
experience and adjust local linkages; rather than as a result of some global rationality
achieved through rational choice or competitive selection. Learning is myopic and
meandering, rather than optimizing. It is “inefficient” in the sense of not reaching a
uniquely optimal arrangement, and different learning-rates from successes and failures
have important consequences for integration and disintegration (March 1999).

Purification and Reconciliation

The basic ideas of the “new institutionalism” have fared fairly well. The “logic of
appropriateness” and “historical inefficiency” still are promising rather than outdated
ideas, and there have been important advances. Nevertheless, many theoretical

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challenges remain and there is need for detailed empirical studies testing the quality of
theoretical speculations.

Further theoretical exploration of the role of institutions in political life may take two
different avenues. One is to purify the competing conceptions of political institutions,
action, and change and make further efforts to specify the conditions under which each
provides a good approximation to important empirical phenomena. Within this
approach, the new institutionalism needs to identify processes and determinants that
increase or hamper the autonomy and ordering effect of political institutions; facilitate
or hinder political action according to a logic of appropriateness; and make history
more or less inefficient and maintain stability or promote institutional change.

Another avenue is to explore how competing perspectives interact and impact each
other. The spirit of the new institutionalism is to supplement rather than reject
alternative approaches. The recognition of an autonomous role for institutions does not
deny the importance of political agency and environmental imperatives.

In this spirit, the last chapter in this section makes an effort to clarify relations between
a logic of appropriateness and a logic of consequentiality. The chapter discusses which
factors determine the salience of different logics and the institutional conditions under
which each is likely to dominate (March and Olsen 1998). Political actors may subsume
one logic as a special case of the other. They may establish a hierarchy among logics, or
be governed by the relative prescriptive clarity of different logics. The resources
available for acting in accordance with different logics may be decisive. Actors may use
different logics for different purposes. There may be a sequential ordering of logics of
action, and change between logics of action may result from specific experiences.

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Endnotes
1
To appear in James G. March: Understanding Organizations. Stanford: Stanford University Press, 2008.
2
“Institutionalism” means different things to different people. Here it refers to the approach initiated by
March and Olsen 1984 (the first chapter in this section) and elaborated in March and Olsen 1989, 1995,
1998, 2006 a,b. I draw on these publications and nearly forty years of cooperation and friendship with
James G. March.

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