Sociology Economic Institutions and Institutional Change
Kim Pernell
  • LAST MODIFIED: 24 March 2021
  • DOI: 10.1093/obo/9780199756384-0255


Interest in the institutions that structure economic behavior has a long history in sociology, extending back to the work of Marx, Weber, Durkheim, and Polanyi. With the rise of new economic sociology in the 1980s, scholars have direct renewed attention toward the informal and formal rules and conventions that structure economic life. Money, financial markets, complex organizations, and economic policies have received particular attention. One branch of scholarship in this area focuses on uncovering factors that drive the emergence or development of economic institutions. Another branch of scholarship examines the role of institutions in structuring economic behavior. A third line of research takes up the puzzle of institutional change: how stable economic conventions crumble and come to be replaced with new ones. The present article offers a broad survey of scholarship on economic institutions, with a particular focus on institutional variation and institutional change.

Classic Works

Sociological scholarship on economic institutions is informed by many of the same theoretical antecedents that gave rise to the field of economic sociology, as described in the separate Oxford Bibliographies article “Economic Sociology.” Early thinkers emphasized the socially and politically constructed nature of economic institutions. Durkheim 1984 explained how economic institutions emerged not only to fulfill economic demands, but social and moral needs as well. Marx and Engels 1978 highlighted the role of class power in structuring the form economic institutions take. Weber 1978 and Weber 2010 compared different methods of organizing economic activity to underscore the connections between economic and social institutions. Polanyi 2001 argued that economic institutions, the free market included, are socially embedded—made possible only through proactive social and political action.

  • Durkheim, Émile. 1984. The division of labor in society. New York: Free Press.

    DOI: 10.1007/978-1-349-17729-5

    Argues that economic institutions, including the division of labor, can serve the function of promoting social solidarity and moral order within societies. Individuality itself is shaped by the broader organization of work and production.

  • Marx, Karl, and Friedrich Engels. 1978. The Marx-Engels reader. Translated and compiled by Robert Tucker. New York: Norton.

    Underscores the role of power in shaping economic institutions. Class conflict is endemic to society. Prevailing ideologies, and prevailing models of organizing work and production, reflect the interests of the dominant class.

  • Polanyi, Karl. 2001. The great transformation: The political and economic origins of our time. Boston: Beacon.

    Describes the social and political transformations that led to the establishment of modern markets. Economic institutions like the free market are always and everywhere socially embedded. Laissez-faire only become possible through proactive government intervention.

  • Weber, Max. 1978. Economy and society. Berkeley: Univ. of California Press.

    A central theme is that economic behavior is influenced by social institutions, including the law, the state, religion, and class. To understand why economic behavior varies across time and place, we must understand its links to these other social institutions.

  • Weber, Max. 2010. The Protestant ethic and the spirit of capitalism. Rev. ed. New York: Oxford Univ. Press.

    Argues that the behavior and customs that supported capitalism originated in early Protestant (Calvinist) traditions. One implication is that shared beliefs, in addition to individual self-interest, help to support patterns of economic behavior. A revision of the 1920 edition.

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