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Edited by Thomas Christiansen and Christine Neuhold
Chapter 2: Formal Institutions and Informal Institutional Arrangements
Michael Brie and Erhard Stölting INTRODUCTION The informal is simultaneously the unwanted stepchild of the social sciences and something that continues to enthrall them. Accessible only in a limited fashion to qualitative empirical research, rarely able to be grasped in elegant formal models, and still morally suspect, the informal sphere has the aura of the irrational and the irregular. Standard works of institutional analysis still have the tendency to push the informal to the margins of institutional analysis. Normally, empirical research goes to great efforts to furnish comparable results (see, for example, Zak and Knack 2001). The mainstream of scholarly research therefore is almost exclusively aimed at the 10 percent of the visible tip of the iceberg of ongoing social processes that is borne by the 90 percent invisible ice under the sea’s surface, even though the central role of the informal is widely and prominently recognized (North 1990, p. 39). Despite the decisive contributions of Mark Granovetter, Robert Putnam and Elinor Ostrom, the informal has remained a marginal field of modern social-scientific research. In this contribution we thus aim to show how informal institutional arrangements are an essential aspect in the functioning even of formal social institutions. THE DISTINCTION BETWEEN FORMAL AND INFORMAL STRUCTURES AND PROCESSES Formal social action is regulated by rules that have been instituted according to procedures recognized as legal in clearly defined contexts. Normally, formal rules are written down and recognized as binding on behavior under defined circumstances. They can be changed by actors...
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