How Can Formal Norms Change Informal Norms? Douglass North’s Approach to Ideologies and Institutional Change

The paper argues that in North’s theory the reciprocal influence between organizations and institutions, and between informal and formal norms, is interpretable as a continuous alternation of bottom-up and top-down processes. Bottom-up processes arise from shared beliefs, and they concern how informal norms engender formal norms. Top-down processes explain how formal norms influence informal norms. North does not exhaustively deal with this latter process, although he provides elements which go in this direction. The concept of ideology illustrates this problem. It is conceived as the outcome of bottom-up processes whereby shared interpretations of reality emerge, but not as a tool used by norm entrepreneurs to trigger top-down processes of change in informal norms. Since formal norms incorporate ideologies, these processes concern how formal norms give shape to informal norms. The paper suggests that theories of social construction – with specific attention to legal studies, international relations inquiries, and Schumpeterian approaches – can integrate North’s view.