IDEAS home Printed from https://ideas.repec.org/a/bla/kyklos/v73y2020i3p371-391.html
   My bibliography  Save this article

Institutional Change and the Importance of Understanding Shared Mental Models

Author

Listed:
  • William F. Shughart
  • Diana W. Thomas
  • Michael D. Thomas

Abstract

Arthur Denzau and Douglass North’s paper “Shared Mental Models: Ideologies and Institutions” seeks to explain differences in economic performance across time and space recognizing that under conditions of uncertainty actors base their decisions “in part upon […] myths, dogmas, ideologies, and ‘half‐baked’ theories.” The model Denzau and North develop is firmly rooted in the orthodoxy of economics but emphasizes the significance of shared ideologies and ideas in driving economic change. In this paper, we discuss how the legacy of Denzau and North (1994) should be applied to current and future economic inquiries and, in particular, how it might inform work in development economics, behavioral economics, and in the study of the effects of social norms on economic outcomes. We argue that a perspective that emphasizes the role of the economic actor as entrepreneur in the context of shared mental models and institutions can improve economic analysis in those areas of research, which currently focus on the economist as exogenous policy expert.

Suggested Citation

  • William F. Shughart & Diana W. Thomas & Michael D. Thomas, 2020. "Institutional Change and the Importance of Understanding Shared Mental Models," Kyklos, Wiley Blackwell, vol. 73(3), pages 371-391, August.
  • Handle: RePEc:bla:kyklos:v:73:y:2020:i:3:p:371-391
    DOI: 10.1111/kykl.12245
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/kykl.12245
    Download Restriction: no

    File URL: https://libkey.io/10.1111/kykl.12245?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Angus Deaton, 2010. "Instruments, Randomization, and Learning about Development," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 424-455, June.
    2. Abhijit Banerjee & Rukmini Banerji & James Berry & Esther Duflo & Harini Kannan & Shobhini Mukerji & Marc Shotland & Michael Walton, 2017. "From Proof of Concept to Scalable Policies: Challenges and Solutions, with an Application," Journal of Economic Perspectives, American Economic Association, vol. 31(4), pages 73-102, Fall.
    3. Peter Leeson & J. Subrick, 2006. "Robust political economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 19(2), pages 107-111, June.
    4. Andrews,Matt, 2013. "The Limits of Institutional Reform in Development," Cambridge Books, Cambridge University Press, number 9781107016330, January.
    5. Douglass C. North, 1991. "Institutions," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 97-112, Winter.
    6. Vlad Tarko, 2015. "The role of ideas in political economy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(1), pages 17-39, March.
    7. Smith,Vernon L., 2009. "Rationality in Economics," Cambridge Books, Cambridge University Press, number 9780521133388, January.
    8. Vernon L. Smith, 2003. "Constructivist and Ecological Rationality in Economics," American Economic Review, American Economic Association, vol. 93(3), pages 465-508, June.
    9. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
    10. Congdon, William J. & Kling, Jeffrey R. & Mullainathan, Sendhil, 2009. "Behavioral Economics and Tax Policy," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(3), pages 375-386, September.
    11. Mwangi Kimenyi & William Shughart, 2010. "The political economy of constitutional choice: a study of the 2005 Kenyan constitutional referendum," Constitutional Political Economy, Springer, vol. 21(1), pages 1-27, March.
    12. Elinor Ostrom, 2000. "Collective Action and the Evolution of Social Norms," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 137-158, Summer.
    13. Boettke, Peter J. & Coyne, Christopher J. & Leeson, Peter T., 2013. "Comparative historical political economy," Journal of Institutional Economics, Cambridge University Press, vol. 9(3), pages 285-301, September.
    14. Christopher J. Coyne & Peter T. Leeson, 2009. "Media as a Mechanism of Institutional Change and Reinforcement," Kyklos, Wiley Blackwell, vol. 62(1), pages 1-14, February.
    15. Sunstein,Cass R., 2016. "The Ethics of Influence," Cambridge Books, Cambridge University Press, number 9781107140707, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Anthony Gill, 2021. "The comparative endurance and efficiency of religion: a public choice perspective," Public Choice, Springer, vol. 189(3), pages 313-334, December.
    2. Ravi K. Roy & Arthur T. Denzau, 2020. "Shared Mental Models: Insights and Perspectives on Ideologies and Institutions," Kyklos, Wiley Blackwell, vol. 73(3), pages 323-340, August.
    3. Daniel D. Bonneau & Joshua C. Hall & Yang Zhou, 2022. "Institutional implant and economic stagnation: a counterfactual study of Somalia," Public Choice, Springer, vol. 190(3), pages 483-503, March.
    4. Ron Hira, 2020. "Outsourcing: A Case of Shared Mental Models in Conflict," Kyklos, Wiley Blackwell, vol. 73(3), pages 410-435, August.
    5. Vicente Moreno-Casas, 2024. "A coevolutionary approach to institutional lock-in," Review of Evolutionary Political Economy, Springer, vol. 5(3), pages 495-509, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ruttan, Vernon W., 2006. "Social science knowledge and induced institutional innovation: an institutional design perspective," Journal of Institutional Economics, Cambridge University Press, vol. 2(3), pages 249-272, December.
    2. Darcy W E Allen, 2020. "When Entrepreneurs Meet:The Collective Governance of New Ideas," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number q0269, September.
    3. Boettke, Peter J. & Coyne, Christopher J. & Leeson, Peter T., 2013. "Comparative historical political economy," Journal of Institutional Economics, Cambridge University Press, vol. 9(3), pages 285-301, September.
    4. Mo, Di & Bai, Yu & Shi, Yaojiang & Abbey, Cody & Zhang, Linxiu & Rozelle, Scott & Loyalka, Prashant, 2020. "Institutions, implementation, and program effectiveness: Evidence from a randomized evaluation of computer-assisted learning in rural China," Journal of Development Economics, Elsevier, vol. 146(C).
    5. Stein T. Holden & Mesfin Tilahun, 2024. "Can Climate Shocks Make Vulnerable Subjects More Willing to Take Risks?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(4), pages 967-1007, April.
    6. Nicolas Jacquemet & Alexander James & Stéphane Luchini & Jason Shogren, 2011. "Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(3), pages 413-433, March.
    7. Cristina Corduneanu-Huci & Michael T. Dorsch & Paul Maarek, 2017. "Learning to constrain: Political competition and randomized controlled trials in development," THEMA Working Papers 2017-24, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    8. Jörg Peters & Jörg Langbein & Gareth Roberts, 2018. "Generalization in the Tropics – Development Policy, Randomized Controlled Trials, and External Validity," The World Bank Research Observer, World Bank, vol. 33(1), pages 34-64.
    9. Mariella Gonzales & Gianmarco León-Ciliotta & Luis R. Martínez, 2022. "How Effective Are Monetary Incentives to Vote? Evidence from a Nationwide Policy," American Economic Journal: Applied Economics, American Economic Association, vol. 14(1), pages 293-326, January.
    10. Christian Barrère, 2007. "Towards an Economic and Substantivist Theory of Heritage [Vers une théorie économique substantiviste du patrimoine]," Post-Print hal-02615269, HAL.
    11. Shabnam Mousavi & Gerd Gigerenzer, 2017. "Heuristics are Tools for Uncertainty," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 34(4), pages 361-379, December.
    12. Bogliacino, Francesco & Codagnone, Cristiano, 2021. "Microfoundations, behaviour, and evolution: Evidence from experiments," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 372-385.
    13. Jason T. Kerwin & Rebecca L. Thornton, 2021. "Making the Grade: The Sensitivity of Education Program Effectiveness to Input Choices and Outcome Measures," The Review of Economics and Statistics, MIT Press, vol. 103(2), pages 251-264, May.
    14. Faraz Usmani & Marc Jeuland & Subhrendu K. Pattanayak, 2024. "NGOs and the Effectiveness of Interventions," The Review of Economics and Statistics, MIT Press, vol. 106(6), pages 1690-1708, November.
    15. Boettke, Peter J. & Coyne, Christopher J., 2009. "Context Matters: Institutions and Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 5(3), pages 135-209, March.
    16. Harrison, Glenn W., 2008. "Neuroeconomics: A Critical Reconsideration," Economics and Philosophy, Cambridge University Press, vol. 24(3), pages 303-344, November.
    17. Wiebke Roß & Jens Weghake, 2015. "10 Jahre YouTube: Von dem Aufstieg einer Plattform und der Entwicklung neuer Märkte zum Kollateralschaden einer Google-Regulierung?," TUC Working Papers in Economics 0014, Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal).
    18. Makowsky, Michael D., 2011. "A theory of liberal churches," Mathematical Social Sciences, Elsevier, vol. 61(1), pages 41-51, January.
    19. Michael D. Thomas & Nathan A. Miller, 2021. "Experimental Public Policy, Discovery, and Behavioral Taxation," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 36(Winter 20), pages 1-20.
    20. Olaf J. de Groot, 2011. "Spillovers of Institutional Change in Africa," Kyklos, Wiley Blackwell, vol. 64(3), pages 410-426, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:kyklos:v:73:y:2020:i:3:p:371-391. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0023-5962 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.