Summary: This paper asks (a) why and how institutions change; (b) how does an institution persist in a changing environment and (c) how do processes that it unleashes lead to its own demise. This paper shows that the game theoretic notion of self-enforcing equilibrium and the historical institutionalist focus on process are both inadequate to answer these questions. Building on a game theoretic foundation, but responding to the critique of it by historical institutionalists, the paper introduces the concepts of quasi-parameters and self-reinforcement.
Method: Formal models.
Important Insight: Quasi-parameters exist and matter to institutional durability. While parameters are exogenous environmental changes to the institution under consideration, quasi-parameters are aspects which are affected by the institution endogenously. Such aspects should be considered as parametric in studying self-enforceability but as endogenously determined – and thus variable – in the long run.