Coevolution of economic behaviour and institutions: towards a theory of institutional change

Traditionally, economics has regarded institutions, notably norms and regulations, as fixed or exogenous. Surprisingly few insights on institutional evolution from natural and social sciences have made their way into economics. This article gives an overview of evolutionary theories of institutions in biology, sociology, anthropology and economics. These theories are subsequently compared with non-evolutionary theories of institutions. Next, the insights and approaches are integrated into a framework for analysis of institutions based on the notion of coevolution. Copyright Springer Verlag Berlin/Heidelberg 2003