Breaking the path of institutional development? Alternatives to the new determinism

The concept of path dependence is being used in highly deterministic ways in neo-institutionalist analysis, so that studies using this framework have difficulty in accounting for, or predicting, change. However, the original Polya urn model from which path dependence theory draws predicts that alternative paths will be possible. It can be argued that actors will be able to use these when they perceive a need to change. This article seeks to capture this possibility through accommodating a Bayesian parametric decision maker, interacting with an environment. This makes it possible to examine how change may involve such processes as: the use of past or redundant institutional repertoires; transfer of experience across action spaces; or from other agents, through networks of structured relationships; the emergence of perceived one best solutions. This approach points to the need to change how typologies are used in neo-institutionalist research, so that those features of cases which do not fit the pre-conceived framework of a type are not disregarded as noise, but properly evaluated as potential resources for change.