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The first view is modest by not suggesting anything about the internal thought processes of agents, and the second view upholds rational choice theory as a theory that describes the normative foundations of rational decision making. Even though the first view is more restrained and is sufficient for applying rational choice methods to understanding social and political phenomena, many researchers hold the view that rational choice theory is a powerful analytic tool precisely because it reflects the actual principles that must characterize purposive agency.

Rational choice theory has been central to methodological debates throughout the social sciences because of its adherence to a limited view of human rationality as consistency among preferences that categorically deems irrational modes of conduct not reducible to this description. As with any robust research tradition, intense controversies abound both internally and externally. Debates internal to the field have tended to focus on complex nuances of the formal theory as well as the suitability of associating consistency of choice with choices characterized by narrow self-interest.

Whereas the former is previously touched on, the latter attempt, for example, is to determine if altruistic behaviour can be consistent with rational choice.

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Joint Approaches to Social Policy: Rationality and Practice

Thank you for your feedback. Introduction Elements and structure Modeling human behaviour. Written By: S. See Article History. Alternative Titles: choice theory, formal modeling theory, positive political theory, rational action theory, social choice theory. Read More on This Topic. In other words, researchers seek a theory of institutions that is endogenous so that it captures the ways in which institutions are imbricated with the actions that they foster.

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Institutions are not ahistorical constants; rather, they are themselves the product of human agency, and as humans enact institutions they correspondingly transform them. Here, however, social science institutionalism is less useful than it might first appear. Different approaches to institutions arose in different disciplines, in response to different imperatives.

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Yet they all struggle with the questions of how to capture endogenous relations between expectations and action, and how to link expectations to underlying causes. In each discipline, scholars tended initially to focus on explaining stability rather than change, using institutions to explain why patterns of behavior endure under circumstances where one might expect them to change.

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In each, a subsequent wave of scholars has reacted against institutional determinism, looking to incorporate the possibility of change, by explaining the underlying forces that shape institutions, but creating new perplexities as a consequence. As Riker famously argued, one cannot claim that institutions stabilize social interactions, without explaining how institutions are somehow different from the interactions that they are supposed to stabilize.

In the end, therefore, institutions are no more than rules and rules are themselves the product of social decisions. Consequently, the rules are also not in equilibrium. One can expect that losers on a series of decisions under a particular set of rules will attempt often successfully to change institutions and hence the kind of decisions produced under them. In that sense, rules or institutions are just more alternatives in the policy space and the status quo of one set of rules can be supplanted with another set of rules.

Without some clear understanding of how institutions differ from the decisions that they are supposed to structure, institutional theory is liable to degenerate into a series of just-so-isms, which posit that institutions have binding force, while providing no specific rationale for why they are binding. People may comply with institutions because they fear the wrath of more powerful actors, or because they recognize the benefits from coordinating on a salient solution, or because they are caught up by the demands of ritual behavior.

Such arguments also provide the basis for theories of institutional change. Institutions may change when power balances shift, or when new, more attractive solutions become available, or when skilled social actors construct new binding myths. However, as Przeworski sharply observed, it is hard to invoke such external forces to explain institutional compliance and institutional change without suggesting that institutions are epiphenomenal, and that what is doing the actual work are the external forces rather than the institutions themselves.

Przeworski pointed out that most institutionalist accounts do a very bad job at showing that institutions matter in their own right—which is to say that current accounts have difficulty in theorizing how institutions have independent causal force. It is notable that these theoretical difficulties spring up across quite different approaches to institutions, despite their various origins and emphases. In part, this reflects very broad problems in the social sciences such as the relationship between structure and agency. In part, it reflects problems that are specific to institutional theory, and in particular to the difficulty of distilling a clear definition of institutions from the murky interactions of beliefs, decisions, and actions and the social forces conditioning all three.

For rational choice scholars, institutions are usually either structures —forces which conduct actors to select one equilibrium or another, or equilibria —sets of strategies from which no actor has any incentive to defect if no other actor defects. Under both definitions, institutions may usually be thought of as rules—regardless of whether these rules are considered to be exogenous regularities that structure choices or enchained patterns of equilibrium behavior in which every actor will continue to behave in specific ways provided others do the same.

Current rational choice institutionalism is the culmination of two distinct lines of inquiry—one in social choice theory, the other in economics—which intersected in the early s. Social choice theory, building on eighteenth-century work on voting by the Marquis de Condorcet and others, gave rise to an extensive formal literature in theoretical economics in the second half of the twentieth century.

Economists such as Kenneth Arrow , Duncan Black , and Amartya Sen arrived at basic results about the aggregation of decisions, looking to examine the strengths and limitations of various voting schemes and other schemes for collective choice, under assumptions of rationality. This literature soon discovered various paradoxes and instabilities, which began to have important consequences for political science as well as economics. Others, such as Downs , provided a more optimistic account. Work by McKelvey , and Schofield , among others, demonstrated that if politics had more than two dimensions, then majority rule could not provide stability.

Instead, politics could end up cycling from one alternative to another, without ever necessarily gravitating towards any central solution or set of solutions. These chaos theorems generated immense frustration among political scientists, because they not only cast doubts on the stabilizing benefits of democracy, but also suggested a degree of radical instability that seemed at odds with empirical observations.

Politics appeared to be relatively predictable—so what was the root cause of stability? The answer—according to a prominent line of argument developed in political science—was institutions. For example, one might think of the institutional structure of the U. Congress—which is composed of different committees, each with a specialized jurisdiction—as simplifying politics in ways that produced stability and predictability.

Congressional committees could carve out specific issue dimensions, reducing the issue space so that each issue dimension was dealt with separately, and a chaotic space of social choice across multiple dimensions was transformed into a series of iterated decisions taken within discrete jurisdictions Shepsle, Hence, institutional arrangements such as congressional committees could avoid the chaos of multidimensional voting spaces, and instead produce so-called structure-induced equilibrium outcomes.

As scholars began to develop the structure-induced equilibrium approach further, they began to use noncooperative game theory rather than social choice theory to model decision making, seeking to capture the essential details of even quite complex institutional arrangements as game trees, in which individual strategies potentially lead to equilibrium outcomes.

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As it was developing, a second body of work in economics began to confront a very different puzzle of observed stability North, Economists studying development believed that they had a good sense of what was necessary to produce economic growth—strong markets and free enterprise. Basic rational choice theory suggested that national economies should converge over time on the practices that led to increased economic growth, because otherwise they would be leaving dollar bills on the pavement.

Yet in reality, countries continued to stick to dramatically different growth paths, rather than converging on the more efficient possibilities offered by countries with free markets. What explained this anomaly, in which national economies remained stably attached to practices that made no sense? According to the influential work of North the answer lay in the relationship between institutions and organizations.

Institutions, as sets of rules, shape the incentives in a particular society. Organizations, as collective actors, pursue their self-interest within a given set of rules, perhaps changing those rules in the process. Societies with institutions that have appropriate incentive structures will tend to develop along a virtuous path, in which institutions and organizations reinforce each other so as to encourage growth-promoting activities. Societies with institutions that tend to promote predatory behavior by the state or other actors may find themselves trapped on long-term, low-growth trajectories, but lack the institutions and organized social actors that might allow them to escape these constraints.

Both of these accounts struggled with the question of why institutions have binding force. Since institutions were themselves the product of choices presumably made across multiple dimensions they should be just as subject to problems of instability as the social choices they purportedly structured. Put less politely, invoking institutions as structures—without explaining the choices through which these institutions had themselves arisen and why these choices were enduring—was sharp practice.

Under the one account, institutions were binding because they produced good outcomes for particular powerful individuals. Under the other, they were binding because they produced good outcomes for everyone. The failure to stick to one or the other allowed North to shift back and forth between explanatory frameworks without ever committing himself to a fully developed set of microfoundations.

These deficiencies inspired pushback.

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  • Structure-induced equilibrium accounts gave way to disagreements over whether it was better to think about institutional equilibrium or equilibrium institutions Shepsle, The former reflected the emphasis of the structure-induced equilibrium approach on explaining how specific institutional features might produce one or another equilibrium, depending, for example, on the order within which actors made choices and had power to set the agenda. Typically, it used models based on one-shot games, treating the institutions as part of the game tree.

    Equilibrium institution approaches, instead, treated institutions as the outcomes of games rather than structures within the game. Instead of looking to one-shot games with complex structures, they typically treated social interactions as indefinitely iterated games with simple structures Calvert, These simple games, however, could give rise to quite complex and sophisticated equilibria, in which actors continued to behave in particular and sometimes quite complex ways, subject to other actors continuing to behave in the expected fashion.

    Under the so-called folk theorem an enormously wide variety of equilibria can arise in many indefinitely iterated games with reasonable parameters.