Transition on the spot: Historicity, social structure, and institutional change

Why do some countries in transition perform quite well while others still struggle with institutional reform, experiencing economic hardship and political disintegration? This paper suggests that this question can only be answered if the processes behind institutional change are well understood. Within the framework of a micro-macro model, it will be argued that historic experience shapes both mental models and the effectiveness of social learning. The historicity of economic development is behind differing development paths. Moreover, it will be shown that understanding the forces that bring about institutional change allows the political advisor to suggest strategies better adapted to the specific needs of different countries than the strategies currently employed. These findings will be applied to the problem of institutional change in rural Russia where the failure of existing reform strategies is eminent.