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Dynamics of institutional change: institutional stickiness and the logic of individual action

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Formal institutions often persist despite recognized need for change. The literature has proposed various mechanisms of resolving this institutional "stickiness," including exogenous influences and major systemic crisis. The authors focus on endogenous responses to stickiness and argue that stickiness tends to trigger a series of responses at the micro-level of individuals, families, firms, and organizations. These responses range from resignation to sanctioned action, non-sanctioned action, and physical exit from the system. Government-led institutional adjustment may occur as a consequence of some of these responses. They illustrate these dynamics on the examples of China, Germany, and Japan.

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp2004/2004-87.pdf

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Copyright INSEAD. All rights reserved