An Introduction to Institutional Inertia-Theory and Evidence

Why are some countries poorer (or richer) than other countries? Many answers have been given to this question and it is still an active field of research. The main idea of this edited volume is that institutional inertia is an important and fundamental factor in explaining the cause of poverty and wealth of nations. However, this is a factor that has received less attention in the recent literature on institutional economics. Therefore, the objectives of this book are to explore the meaning of inertia and to identify the types, causes, significance, and effects of institutional inertia. Thus, this book presents the concept of inertia from two positive and negative aspects and explains the concept and types of institutional inertia. Then the effects and causes of institutional inertia are also explained. However, this book appears to be the first attempt in this field and differs from the existing literature in several ways: (i) unlike the existing literature, it has a comprehensive look at the definition of inertia, institutional inertia, types of institutional inertia, its roots and effects; (ii); it has a special look at the roots of cognitive inertia and introduces it as the main source of institutional inertia; (iii) it presents a comprehensive view of organizational inertia; (iv) it comprehensively discusses the impact of institutional inertia in the fields of trade, energy transition, climate change, innovation and entrepreneurship. Hence, this edited volume on Institutional Inertia embraces a wide spectrum of topics such as inertia (resistance and endurance); the concepts, types and causes of institutional inertia; the origin of development, critical juncture, and institutional inertia; inertia in informal institutions (concepts, and effects); the roots of cognitive inertia (an introduction to institutional changes); cognitive inertia as a fundamental cause of institutional inertia; overview of institutional-organization inertia nexus; internal empowerment dynamics of organizational inertia management; trade and institutional inertia; transition to sustainable energy and institutional inertia; legitimacy, institutional inertia, and climate change; early entrepreneurship entry and institutional rigidities in emerging market economies (evidence from the Global Entrepreneurship Monitor); inertia, innovation failures, and learning from innovation failures (some insights from MSEs in an emerging market economy). In each chapter of this book, the authors, with their expertise in their chosen topics, have attempted to reveal some emerging aspects in institutional inertia that can be useful not only for academics, but also for institutional, cultural, social, economic, and development policies and practices.