Politics of institutional change: Evolution of the Irish social concertation model

Abstract

This article proposes a better way to understand endogenous processes of institutional changes, by exploring the dynamic evolution of the Irish social partnership. The dynamic changes of the Irish social partnership challenge the prevailing theories of comparative political economy. Unlike neoliberal and Marxist accounts of national economies converging toward a neoliberal free market, Ireland developed a social concertation model under globalization. However, despite this development, the institutionalist arguments cannot account for the dynamics of path-breaking adjustments and why two similar crises in the late 1980s and 2008-2011 resulted in different outcomes. Even the recently updated versions of rationalist and institutionalist accounts of endogenous institutional changes cannot encompass the dynamic changes of creative recomposition - neither self-reinforcing nor self-undermining adjustments, as demonstrated by the emergence of a third type of coordination in Ireland in 2010-2011. To better account for the endogenous process of institutional changes, this article, taking a pragmatic view, emphasizes changes in the actors' ideas and actions in the process of experiencing an institution, unlike the rationalist and institutionalist assumption of repetition of the same practices and perception. This article argues that understanding the continuous changes in rules, action and perception in the practical interaction within the formal stability is critical to understanding the dynamics of creative recomposition leading to a new creation of institution at a critical juncture.