Politics and Perceptions

The “reality” of a political/economic system is never known to anyone, but human beings do construct elaborate beliefs about the nature of that “reality” — beliefs that are both a positive model of the way the system works and a normative model of how it should work. The belief system may be broadly held within a society; alternatively, widely disparate beliefs may be held…

The resultant path dependence typically makes change incremental. But change is continually occurring (although the rate will depend on the degree of competition among organizations and their entrepreneurs), resulting in alterations of the institutional matrix, revisions of perceptions of reality, and therefore new efforts of entrepreneurs to improve their position in a never-ending process of change. Change can also result from non-human-induced changes in the environment, such as natural disasters; but overwhelmingly it is humans themselves who incrementally alter the human landscape.

-North, Summerhill, & Weingast’s “Order Disorder, and Economic Change” 1999, 7.




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