Institutional Theory in Political Science: The New Institutionalism

Peters argues that the 'new institutionalism' is not a single theory but a family of distinct approaches that often disagree on fundamental questions. Rather than resolving these differences by advocating one variant, he develops a common frame of reference by posing the same set of questions to each: what institutions are, how they are formed, how they operate, how they change, and how they interact with individuals. This comparative architecture reveals both genuine overlaps—features that unify institutional analysis—and sharp disagreements that matter for research. The book assesses whether a unified institutional paradigm is possible for political science.

The number has grown across editions. The third edition identifies eight variations on the theme of institutional analysis, while earlier editions described seven. The core variants include normative institutionalism (associated with March and Olsen's 'logic of appropriateness'), rational choice institutionalism (rules and incentives shaping utility-maximizing behavior), historical institutionalism (path dependence and the legacy of past decisions), empirical institutionalism (focus on formal government structures), discursive and constructivist institutionalism (ideas as foundations), and sociological institutionalism. The fourth edition added chapters on informal institutions and institutionalization/deinstitutionalization.

The logic of appropriateness, central to normative institutionalism, holds that people in institutions behave as they do because of normative standards acquired through membership—not because they calculate individual utilities. March and Olsen contrast this with the 'logic of consequentiality' that underpins rational choice institutionalism, where behavior is a function of rules and incentives and individuals maximize their own utility. Peters treats this as one of the fundamental disagreements within institutionalism: normative institutionalists see behavior as rule-following based on identity and appropriateness, while rational choice institutionalists see it as strategic calculation constrained by institutional rules.

Historical institutionalism emphasizes path dependence: once institutions are established and practices are internalized by organizational members, they tend to persist even when efforts are made to eliminate or modify them. The power of inertia is especially strong in governmental organizations. Peters notes that this approach treats history as consequential not merely for what can be learned from the past but because present and future choices are connected to the past through institutional continuity. Path dependence does not mean inevitability—it narrows the range of choice and makes long-term direction more predictable and harder to reverse.

Peters contends that while institutionalists assume a priori that institutions matter as explanatory variables, the real problem arises when attempting to specify what about them matters and how they exert influence on outcomes. For some versions of institutionalism, measurement is straightforward—identifying formal structures and predicting from structural differences. For others, the possibilities for measurement are more ambiguous and remote from common-sense meanings of institutionalism. If comparative political theory is to develop, Peters argues, institutionalists must cope with institutions on more than an abstract, theoretical level and develop measures enabling testing of predictions.

The book has been widely endorsed as a standard reference. Johan P. Olsen called it a laudable effort to create order in a literature that had become a 'cacophony of competing voices,' predicting it would remain a standard reference for years. Bo Rothstein described it as giving a 'unique and comprehensive overview' of institutional analysis, with Peters offering 'novel and original insights'. Vivien Schmidt called it a 'must-read' that provides a history and survey of political science through the lens of institutional theory. Jacob Torfing praised the systematic and balanced account, noting the addition of discursive institutionalism made it more complete.