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enforcement, and transaction costs which would otherwise arise because of insufficient infor
mation. Based on self interest, actors act within the institutional framework according to the
principle of utility maximization with predefined and unambiguous preferences. Institutions
play a role by providing a framework that directs expectations, limits the range of choices an
actor can make, and offers sanctions and incentives. The orientation at institutional norms is
the result of an individual rational cost benefit equation as it is perceived as cost reducing (Hall
and Taylor 1996: 942 946; Peters 1999: 43 62). Most of water research in Institutional Eco
nomics is based on such assumptions. While this approach is useful to grasp strategic behavior,
it neglects the social construction of preferences and cannot explain the persistence of dys
functional institutions.
Sociological institutionalism (SI) argues that it is not possible to explain the existence and
persistence of institutions with effectiveness or rationality, and rejects models of rational actors
and behavioralism. Rather, it seeks to understand how institutions influence orientations (pre
ferences and perceptions), anticipations, interests, and objectives of actors and therefore the
ways solutions to problems are sought,
before
concrete incentives become effective. Sociological
institutionalism became especially powerful in organizational theory (Powell, DiMaggio 1991).
While sociological institutionalism aims at “bringing society back in” (Friedland, Alford
1991: 232), the objective of historical institutionalism (HI) is “bringing the state back in”
(Evans et al. 1985). As its basic interest is the interaction of polities (the political institutions)
and politics (the political processes) to explain policies (outcomes), it is often used in policy
analysis. The state is conceptualized as a complex set of institutions that interacts with other
societal and political institutions such as labor organizations or interest groups. Historical insti
tutionalism is based on the assumption that development is path dependent; meaning that
institutional designs, once established, are in effect for a long time as they constrain the possi
bilities and options for change. Hence, even specific efforts to shape institutions are limited by
these path dependencies. Political ambitions to change institutions are often not feasible as it is
impossible to change the path. In this manner, powerful actors that benefit from certain insti
tutions and hence have an interest in their persistence or change also play a role (Hall, Taylor
1996: 937f; Thelen and Steinmo 1992; Thelen 2002). Historical institutionalism combines ac
tor specific and institutional factors. While actors are not as much constrained by institutions
as in the sociological variant, their strategies, objectives, and norms still are shaped by the insti
tutional setting. Institutions are only one set of factors influencing policy outcomes beside
others like economic development or the spreading of political ideas.
Although these three schools refer to distinct meta theoretical approaches and their dis
tinction is important, they also share basic assumptions and can be regarded as supplementary
rather than exclusionary. Therefore, they can be combined. In this study, we will mainly com
bine elements of sociological and historical institutionalism in the basic understanding of insti
tutions and institutional change. This does not mean the assumptions of RCI are rejected in
total. They are partly integrated in historical institutionalism, also including power (and hence
strategic behavior) as a factor in institutional change. Therefore, elements of RCI are used in
order to understand and explain strategic and power seeking behavior of actors, albeit with
their preferences not being fixed but shaped by the institutional context.
After this brief note on neo institutional approaches in general, the following sections
discuss the basic definition of institution and present the conceptualization of institutional
change and continuity that will guide our research and argument.
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