A constructivist approach to institutions

4.3.1 Neo-institutionalism

As the preceding section has illustrated, social constructivism must be considered an

institutionalist ontology, which asserts a dialectical relationship between institutional context and actors, wherein institutions are not merely structures that shape behaviour but are also themselves constituted and shaped by behaviour (Hay 2016; Schmidt 2002). The

constructivist approach to institutionalism can be understood as a fourth and relatively recent addition to the three ‘neo’-institutionalist theories: rational choice institutionalism (RI), historical institutionalism (HI) and sociological institutionalism (SI) (see Hall and Taylor 1996). It is not the intention here, nor indeed is there adequate room, to debate the various merits of these older neo-institutionalist approaches (though see Hall and Taylor 1996 for a fuller discussion). Nevertheless, it is pertinent to locate the constructivist approach in relation to the other three neo-institutionalist theories.

Initially, these neo-institutionalist approaches emerged as attempts to reassert a level of structure into accounts of the social world, following the behaviouralist turn in the 1950s and 1960s, through an understanding of how institutions come to shape the behaviour of actors and produce stability (Hall and Taylor 1996: 936; Schmidt, 2008a: 213). HI theorists, for example, posit that institutions, defined as formal or informal procedures, norms and conventions, serve to regulate behaviour and provide information to actors about the present and future behaviour of other actors. Once established, institutional development follows a

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‘path-dependent’ course, interrupted only by certain ‘critical junctures’ normally created by large exogenous shocks (see Hall and Taylor 1996: 937-42).

The constructivist approach, however, was in some senses a reaction to the overly structural accounts of institutions that these approaches brought with them. The main charge against such logics from constructivist scholars is that they hold a natural inclination towards accounting for institutional creation and subsequent stasis yet have an underdeveloped sense of how institutional change occurs, beyond viewing the impact of exogenous events such as economic crises as moments that punctuate the equilibrium of institutional stability (Schmidt 2002: 209). As Schmidt (2002: 213) asked, ‘if everyone follows rules, once established, how do we explain institutional change?’ The turn to ideas within institutionalist scholarship was thus utilised as a remedy to help explain how institutional change may occur (Blyth 2003: 696).

Initially this occurred within the HI tradition. Though grounded in the materialist proclivities of HI, Peter Hall’s (1993) now classic work, on what he termed a ‘paradigm shift’ in the UK in the late 1970s away from Keynesianism towards monetarism, demonstrated how political ideas can provide powerful ‘interpretive frameworks’ through which state actors come to realise new policies and institutional designs. Hall’s work on Thatcherism helped to demonstrate clearly that the policymaking process can be ‘structured by a particular set of ideas, just as it can be structured by a set of institutions’; the two, Hall noted, ‘often reinforce each other since the routines of policymaking are usually designed to reflect a particular set of ideas about what can and should be done in a sphere of policy’ (Hall 1993: 290).

4.3.2 Constructivism: A fourth variant of neo-institutionalist theory

Hall’s framework has been hugely influential within the literature. However, an emerging set of constructivist theorists remained unsatisfied with the framework adopted by Hall, which ultimately rests on a logic of historical path dependency and wherein ideational factors serve only to ‘patch up’ holes in the HI framework, helping to explain change when other aspects of the HI framework cannot (see Blyth 1997: 246; 2002; 2013). As a result, ideas are generally relegated to a less important status, wherein ‘unless existing state institutions and policy instruments are congruent with new ideas, then new ideas will neither be proposed nor readily accepted by the state and other elites’ (Blyth 2002: 20). Moreover, and largely as a result of this, Hall’s work, and the HI literature in general, was charged with having less to say, ‘about the processes of change which underlie the model’, with post-formative change

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seen largely as a ‘consequence of path dependent lock-in effects’ (Hay 2008: 60, 67 emphasis added). By ignoring the ‘processes of change’, HI theorists neglected how policy actors act to ‘deliberately package and frame policy ideas to convince each other as well as the general public that certain policy proposals constitute plausible and acceptable solutions to pressing problems’ (Campbell 1998: 380).

Authors from a constructivist perspective built upon these criticisms (see Blyth 2002; Hay 2008; Schmidt 2002; 2008a). Such authors have variously described or positioned their work as an ideational approach to institutionalism (see Blyth 2002), as ‘constructivist institutionalism’ (see Hay 2004b; 2008) and ‘discursive institutionalism’ (Schmidt 2002; 2008a). Whilst these approaches and various others hold their own nuances, this section’s ambition is to cut across this literature in order to draw upon the richness of its shared and most important insights. In doing so, I refer to these works under the banner ‘constructivist institutionalism’ (CI), whilst I view Schmidt’s ‘discursive institutionalism’ (DI) as a particular ‘way of doing’ CI, equipping scholars with a set of analytical tools, rather than being completely distinct from the work of other CI scholars.

Beyond the inevitable theoretical and analytical variances within CI, I suggest that it is possible to delimit five key facets of this approach. First and foremost, for CI scholars, actors’ ‘interests’ are ‘irredeemably ideational, reflecting a normative (indeed moral, ethical, and political) orientation towards the context in which they will have to be realized’ (Hay 2008: 63-4; see Hay and Gofas 2010; Blyth 2003; Schmidt 2008a). This ontological prioritisation of the ideational does not mean that actors are somehow irrational. Rather, it underlines that such actors behave in relation to their perceptions of their own self-interest (Matthijs 2011: 23).

Second, we must ‘conceive of ideas as having institutional effects without necessarily reducing them to institutions’ (Blyth 1997: 246; see also 2002; 2003; Schmidt 2002; Hay 2008; Campbell 1998; Carstensen 2011). Whilst the specific role played by ideas differs across accounts (see Carstensen and Schmidt 2016), the overriding premise is that ideas must be seen to have a genuinely ‘independent causal impact on political outcomes’ (Watson 2001: 81; see also Hay 2004b).74 _{That is not to suggest that ideas can be easily isolated analytically}

from other factors; after all, actors’ ideas are shaped by the social world around them.

74 _{Indeed, as Mehta (2010) notes, the influence of such works has moved the wider theoretical debate away from}

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However, if we accept that two actors have the cognitive capacity to simultaneously develop different sets of ideas about the same phenomenon, ideational factors must be viewed as having a status independent from other material or institutional aspects of the social world (see Watson 2005: 60-5). This account thus centres the character of agency in the formation of ideas.

On this basis, institutions are not understood simply as ‘rule-following structures’ (Schmidt, 2008a: 314). Instead, ‘a dynamic understanding of the relationship between institutions on the one hand, and the individuals and groups who comprise them’ is implied (Hay 2008: 65). As Blyth (2003: 698) puts it, ‘structures do not come with an instruction sheet’. Institutions, therefore, exist as both ‘structures that constrain actors and as constructs created and changed by those actors’ (Schmidt, 2008a: 314; see also Blyth, 2003: 700). Compared to the natural focus on institutional stability engendered by HI’s logic of path dependency, CI allows for a more nuanced account of institutional change and path-shaping. It does so by promoting the study of ideas whilst recognising that interests, institutions and ideas ‘represent different but not mutually exclusive ways to focus attention in analysing economic policy’ (Clift 2016: 510).

This leads to the third key element of CI: that ideas matter, and always matter – even when change does not occur. Indeed, as has already been noted, the constructivist scholarship was developed out of frustration with the theoretical limitations of earlier neo-institutionalist scholarship, which was unable to adequately account for endogenous institutional change. As a result, the CI literature has often focused on moments of perceived economic crisis as periods when ‘ideas matter more’ and are more likely to bring about political economic change (see Blyth 2002; Matthijs 2011). That is not to suggest that within the CI tradition there are no attempts to theorise institutional stasis or paradigm reinforcement from an ideationally attuned perspective (see Blyth 2013c; Hay 2013). However, beyond certain exceptions (see Moschella 2009; Schmidt and Thatcher 2014a), the literature has largely overlooked the failure or absence of ideational renewal as a factor in producing institutional stasis. A number of the tools to examine this already exist. For instance, as Hay (2008: 65) contends, the constructivist school emphasises not only institutional path dependence, but also ‘ideational path dependence’ (see also Matthijs 2011: 30-31). For instance, in the case of social democratic politics, Berman’s (1998: 7) account demonstrates how ‘different versions of social democracy’ came to be ‘institutionalized’ early on within the German and Swedish social democratic parties, with the result that the two parties ‘found themselves placed on

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distinct policy-making trajectories’ in the interwar period. As per these insights, focusing upon the conditions of ideational renewal – as a necessary element in any attempt to respond to the requirements of a new political and/or economic environment – is, therefore, an important part of this study. I return to this issue when discussing the ideational foundations of effective statecraft in Section 4.5.

The central point here, then, and what is seen to be missing from HI literature, is that it is not only institutions but ‘the very ideas on which they are predicated and which inform their design and development, that exert constraints on political autonomy’ (Hay 2008: 65, emphasis added; see also Campbell 1998: 380). Returning to the dialectical relationship between the ideational and the institutional we can, therefore, appreciate the role of

subjective and intersubjective ideas in shaping the institutional environment, both in enabling change and facilitating stability through posing constraints on political autonomy (see

Widmaier et al. 2007; Blyth 2002: 41;Finnemore and Sikkink 1998). This thesis builds upon some of the limitations even within the CI canon by taking seriously the processes associated with the failure or absence of ideational renewal as integral parts of the lack of change in the post-crisis period.

This, in turn, leads us to the fourth key facet of the constructivist approach: a focus on the processes of institutional design, development and change (Hay 2008: 67). Analysing these processes is critical to understanding why some ideas successfully promote change and others do not. My intention is thus to study the mechanisms through which certain ideas and discourses are developed and discussed in both internal policymaking circles and publicly, and subsequently come to shape the institutional environment (see Schmidt 2002; 2008a).

Finally, linked to this understanding of the relationship between ideas, actors’

behaviour and the institutional environment, the fifth key facet of the constructivist approach is to view institutional change as necessarily contingent and political, providing a naturally critical edge to constructivist analysis (see Hay 2016: 525; Hacking 1999). It is this final facet that is of such great importance to this study’s focus on the post-crisis environment. Crisis moments have played a significant role in shaping the understanding of the potential for radical political change within such ideationally-attuned works. The following section thus explores this further and sets out a framework for understanding crisis moments that can guide my analysis within this thesis.

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