Institutions exert a pervasive influence on the evolution and character of regional economies. Yet, this role is poorly understood within recent debates on neoliberalism, varieties of capitalism, and other approaches to the study of economic change. A reconstituted institutional economic geography must accommodate individual agency, institutional evolution, interscalar relations, and comparative methodologies. Examining recent work on universities in local economies, as well as on creativity-based strategies and social inclusion/polarization, it is shown how locally distinctive institutional architectures shape evolutionary trajectories, leading to differentiated social and economic outcomes. The paper then enunciates some important principles of methodology and theory-building in institutional analysis.
Meric S. Gertler (2010) Rules of the Game: The Place of Institutions in Regional Economic Change, Regional Studies, 44:1, 1-15, DOI: 10.1080/00343400903389979
President and Professor University of Toronto, Canada
The interview transcript
Hello Merick thank you very much for accepting this invitation to a coffee
break how are you doing? I’m very well and thank you for inviting me it’s a
Same here I want to talk with you today about the paper you wrote in which you examine the role of institutions in regional economic change could you please tell me what the paper was about so really it’s about alerting economic geographers to the fact that there are these invisible forces that shaped the way we behave and the decisions that we make and if we don’t take those forces into account then we’re missing a really big part of the story and in trying to explain how places develop over time
So I see the key notion of your paper is exactly that institutional economic geography, could you please define it?
Sure, so institutions are rules that are either written or unwritten formal or informal the kinds of conventions that shape the way we behave they’re really valuable in economies because they help create predictability you know for example in certain countries we know that well people walk on the right side of the footpath versus the left side and that that widely understood rule helps people get from A to B in a very orderly way imagine if there was no consensus around that the confusion and congestion that would result and so that’s a kind
of metaphor for the many other institutions that shape our economic decision-making on a daily basis
Thank you for that and based on this notion which ones are the main findings of your paper?
So the main findings really are for first of all I argue that we need to think about how institutions shape the behavior of individuals but we also have to make sure that we leave room for the agency of individual people so you know
institutions make certain outcomes more likely and other outcomes less likely
but they don’t predict with 100% certainty what we will do that’s where individuals come in the second point is that in order to have a really dynamic and full fledged institutional geography we have to understand how institutions change over time and I think the best way to do that is by studying real places and appreciating how changing institutions produce changing results in those places the third idea is that we have institutions at various different spatial scales so there’s a real geography to this many institutions come from the level of the nation state the country such as trade rules for example or intellectual property rules other institutions are more regional or local in origin and so we have to understand first of all that that there are three sets not one set and secondly we have to appreciate how they interact so for example you know how do national institutions around competition make it easy or not so easy for firms in a particular place to cooperate with one another and are there certain institutional rules at the local level that produce variations from one place to another my point is you need to look at all of these different scales. And I guess that the next point and the final point is that the best way to understand how institutions shape economic geographies is by doing work in a comparative way you need to compare more than one locality where there’s some variation in institutional structures and use that as a way of guide your understanding of the impact that institutions make in terms of producing economic results very interesting findings.
Thank you for that so I’m very interested also knowing where was your
personal motivation in writing this paper?
Personal motivations are really two first of all a recognition that when you read economic theory over a long period of time there’s a lot of interest in the role that institutions play there’s a really rich literature there and yet it didn’t seem to be penetrating the field of economic geography the way I thought it should. The second motivation was that I was frustrated by the fact that people would study one case and me make very sweeping conclusions on the basis of that one case without understanding how the results that they were highlighting were really dependent on the institutional architecture of that place. One of the examples is around the whole creative cities debate and the argument in the United States that cities have had a high proportion of creative employment or creative industries were inherent unequal that you know the more creative a city the greater the income polarization and that to me seemed like too sweeping a generalization because I know that in the city that I work in and live in Toronto we have a lot of creative industries a lot of creative workers and there were different institutional shapes there that were actually minimizing the differences in income levels between workers of different occupations and you could look at things like the public school system or the way that income is redistributed by governments across different parts of the region as some of the most important institutional features that produce a very different result in Canada.
Thank you for that and finally I want to ask you about the policy implications, so based on your research which ones will you say are key policy implications?
So I think the most important policy implication is that many of these institutions can be shaped by public policy and that it’s actually a kind of an optimistic finding that by crafting policies even at the local level that are driven by goals like reducing income inequality or accelerating the transfer of knowledge from universities to firms in the communities around them you can actually make quite a big difference and you can make a difference pretty quickly too so it’s actually very optimistic I think that’s really important for policymakers to understand.
Yeah I could indeed, thank you thank you for that so those were all my questions, thank you again for having the time to chat with me and hope to see you again.