The nature of institutions in a process approach

Abstract

Motivation: The importance of institutions, understood as common social norms (process approach), is undeniable. As they affect all processes occurring in the economy, it seems crucial to gain a thorough knowledge of their nature. Understanding how institutions work, how they function and how they change would allow for a better explanation of many socio-economic processes occurring in production, exchange and consumption.Aim: The main purpose of this article is to conceptualize institutions in the process approach and to identify the most important features that characterize them. The paper is theoretical and interdisciplinary in nature.Results: The result of the analysis carried out in this article is the identification of the following characteristics of institutions in the process approach: universality, heterogeneity (originality), endogeneity, variability over time (spontaneous and constituted), dependence on the past (historicity), immateriality and direct non-observability. The study also allowed to identify the following features of the institutional system: internal complexity and internal interdependence, which can take the form of relationships of substitutability, complementarity or mutual exclusion.