Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Path-Dependent Rule Evolution

  • Jan SchnellenbachEmail author
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_362


Path-dependent rule evolution occurs whenever the further change of formal or informal institutions is, at least to some degree, determined by the institutional history of a system.

How rules emerge and change

Different types of rules influence individual behavior. There are formal institutions, such as laws or self-adopted written rules of organizations (Furubotn and Richter 2005); there are informal institutions that are not captured in written form, such as social norms (Young 2008); and there are also habits or routines (Hodgson 2010; Vanberg 2002) that individuals themselves follow. A decision to implement and to follow such rules can be made consciously, but they can also evolve without any individual making a deliberate choice to change them. In any case, the evolution of rules is often path dependent.

Path dependence exists, simply put, when past events and decisions have an influence on and limit the scope of the future evolution of a system (David 2005). A simple...

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© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Brandenburgische Technische Universität Cottbus-Senftenberg Chair for MicroeconomicsCottbusGermany