Transplantation of economic institutions: a post-institutional theory (expanded version)

The transplantation of institutions, that is its copying from one country to another, is one of the most challenging areas of institutional economics. At the same time, the overwhelming majority of research on institutional transplantation is based on a set of general methodological principles and theoretical positions, which collectively might be termed the ‘classical theory’. Despite its persuasiveness and wide distribution (including outside the economic discourse), the classical theory of institutional transplantation has many built-in methodological limitations. It has a pronounced one-sided character, is based on reductionist approaches, and has problems with a systemic explanation of transplant processes in the modern economy. The article presents an interdisciplinary research program for the extended theory of institutional transplantation, based on the methodologies of post-institutionalism. The extended theory proposes to pay special attention to bottom-up transplants, as well as the role of institution-based communities – heterogeneous networks of internal and external actors of transplanted institutions. Adaptation of a transplanted institution to the new environment is viewed more as an active transformation of the environment by actors (institutional niche construction). The deviations from foreign prototypes arising in transplanted institutions are interpreted as adaptive refunctionalizations rather than transplant failures. Special emphasis is placed on the interactive communication field in which transplanted institutions develop. As a result of transplantation, it is proposed to consider not the dichotomy of successful adaptation and rejection of a new institution, but the emergence of institutional assemblage – a complex system of borrowed and local institutions based on irreducible institutional logics. A key metaphor for the extended theory is the formation of reef communities around artificial coral reefs.