This paper was originally prepared for presentation to the seminar series on social and institutional change at the Robert Wood Johnson Foundation, Princeton, N.J., organized by Paul DiMaggio. I appreciate the insightful comments of Art Stinchcombe on the earlier draft.

This article provides a sample of the latter two approaches and argues that they are fundamentally similar in terms of their underlying logic and policy implications. These models have appeared Rosenzweig and Binswanger (1993) for instance show the effect of weather uncertainty on diver- gence between cropping choices of poor and rich farmers in Indian ICRISAT villages, which presumably owes to differential risk attitudes induced partly by differences in credit access

currently in revise & resubmit status at American Journal of Sociology word count = 21,871 without footnotes; 28,371 with footnotes 1 The authors gratefully acknowledge a series of small grants from the Social Science Division of the University of Chicago, which helped in the collection of data, and a substantial grant from the Hewlett Foundation, which funds John Padgett’s and Walter Powell’s “Co-evolution of States and Markets ” program at the Santa Fe Institute. SFI is the intellectual and research home of this project; we deeply appreciate its support over numerous years. David Sallach

Abstract not found

• This essay is a rough draft of the introductory chapter for a doctoral text on organizational economics. As such, it draws unabashedly on several surveys and papers I have written or co-authored, including Gibbons (1997, 1998a, 1999, 2000) and Baker, Gibbons, and Murphy (1999). Although the text will be rooted in economics, I would like it to both draw on and reach the wide range of fields that study organizations. Accordingly, parts of this essay and the text will be rudimentary for some readers but unfamiliar or even controversial to others. Furthermore, my attempt at breadth causes me to sacrifice depth in many places. Comments are therefore eagerly solicited not only on this essay but also on the course syllabus that will be the basis for the text, which is available upon request. I apologize in advance to anyone whose work is under-emphasized or omitted in either the essay or the syllabus; all I can say is that I am all ears. Why Organizations Are Such a Mess

The authors gratefully acknowledge a series of small grants from the Social Science Division of the University of Chicago, which helped in the collection of data. The Santa Fe Institute enthusiastically gave intellectual and research support to the first author. SFI is a creative environment in which to work. David Sallach and Nick Collier, of the Social Science Research Computing Center at the University of Chicago, offered the kind gift of their services in helping to organize the data into relational data-base form. We have received helpful comments on an earlier draft of

Cambridge University Press. Vol. II. Pp. 79-113. This paper discusses the three approaches within economic history that utilizes micro-economic theory to examine institutions, their nature, change, and efficiency: the Neo-classical Economics approach, the New Institutional Economic History approach, and Historical Institutional Analysis approach. The focus is on methodology and general results rather than on any specific conclusions regarding institutions in particular historical episodes. Most of the survey is devoted to elaborate on the recent development of Historical Institutional Analysis.

We consider a setting where every pair of players can interact (e.g. exchange goods) and this interaction yields a fixed surplus. An interaction can take place only if the players involved have a connection. This connection may be direct, in which case the two players split the surplus equally. But the interaction could also be indirect (i.e. involving more than two players in the path), and then every player essential to the connection is assumed to get an equal share of the surplus. In the model, the incentives to forming links derive from the possibilities they avail in three respects: (1) the creation of new interaction opportunities; (2) the rents that can be attained from essential intermediation; (3) the payment of rents that can be avoided by circumventing intermediaries. We focus on an equilibrium notion in which pairs of players may jointly coordinate on the (possibly simultaneous) creation and destruction of the links they control. Our main conclusion is that, so long as costs of forming links are not very small, all (non-empty and strict) equilibrium networks are stars. In such networks, a single agent is essential for all bilateral interaction and there is significant inequality in payoff distribution. We end the paper by showing that the main gist of the analysis is essentially maintained if commitment is ruled out and bilateral deviations are required to be internally consistent.

This paper was originally prepared for presentation to the seminar series on social and institutional change at the Robert Wood Johnson Foundation, Princeton, N.J., organized by Paul DiMaggio. I appreciate the insightful comments of Art Stinchcombe on the earlier draft. ORGANIZATIONAL GENESIS, IDENTITY AND CONTROL:

Greek society in the early Dark Age consisted of small isolated settlements with almost no social stratification. In the course of the following four centuries, the city-state emerged as a community of citizens, as a political, geographical, religious, and judicial unit, with assembly, council, elected magistrates and written laws. A rational-actor perspective is used to shed additional light on this process of institutional change. The process was driven by competition among the members of the leading class. A crucial step was the definition of ”national” territories. This is usually associated with a growing scarcity of land, but it is suggested that it may also have been used in the competition for power among local chieftains, and hence may have been a conscious rather than a spontaneous process. The gradual consolidation of the boundaries of the incipient poleis changed the incentives of the different actors in the community. It may therefore have contributed to population growth, inter-state conflicts, colonisation and a more fierce competition for power. Furthermore, variations over time in the conditions for the aristocratic competition for power can help explain both the later introduction of formal political institutions and the overthrow of these institutions by tyrants.