NEW SYSTEMIC INSTITUTIONAL APPROACH
FOR COMPARATIVE
POLITICAL AND ECONOMIC ANALYSIS
Svetlana Kirdina
Institute of Economics,
Russian Academy of Sciences,
Moscow
URPE at ASSA
January 4-6, 2013
San Diego, California
Outline
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Attempts to rethink global market capitalism
Systemic paradigm and institutional analysis in modern
economic theory
Systemic and institutional ideas to develop the Marxian
approach
Institutional Matrix Theory, or X- and Y-Theory as a new
systemic institutional approach for comparative studies
Conclusion
URPE, San Diego, USA, January 2013
Some attempts to rethink market capitalism:
not one but two (by at) types of economies
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1853 – Karl Marx (Germany) about two paths of development:
European one (see “Das Kapital”) and “Asiatic mode of production
without private ownership of land”
1939 – Walter Eucken (Germany) about “exchange economies” and
“centrally planned economies”
1953 – Karl Polanyi (Hungary-Austria-Canada) about market
(exchange) and redistribution in the economy
1990-th – Russian scholars Natalia Drozdova, Nadezhda Lebedeva
and Olga Bessonova with their separate institutional concepts about
non-market historical path of Russia’s economy
2002 – Steven Rosefielde (USA, North Carolina) about market selfregulating category A economies and culture-regulated category B
economies
URPE, San Diego, USA, January 2013
Systemic paradigm in economic theory-1
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The systemic approach deals not just with the
individual (mereological) details of an economy but
with the social system as a whole, and not just with
the economy but also with the political, ideological,
and other dimensions. It pays special heed to the
interactions between spheres. The most general
features of the system paradigm that appear in
economic research are described in the well-known
study by J. Kornai (1998).
URPE, San Diego, USA, January 2013
Systemic paradigm in economic theory-2
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Interrelations between the whole and its parts are the primary
subject of social systems analysis;
Research focuses on the institutions that define the framework and
flows of specific processes. Institutions are understood in a broad
sense as structures formed historically and developed
“evolutionary”;
There is a close connection in understanding the current social order
in economies alongside of the historical process in which it
appeared;
Primary attention is paid to major changes and deep
transformations, rather than to small and constant changes;
System “dysfunctions” are inherently built into any system, which may
be compensated for but not eliminated since their selfreproducibility is deeply rooted in the system itself.
URPE, San Diego, USA, January 2013
Main research program with institutional
approach in comparative studies are
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Comparison of Economic Systems (CES),
 Comparative Institutional Analysis (CIA),
 Ordoliberalism by W. Eucken
 Regulation Theory of French School
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URPE, San Diego, USA, January 2013
Methodological principles in the
analysis of economic systems
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Development of an universal and ideologically neutral language to
describe different economic systems;
Definition of economic system as an institutional structure;
Holistic approach focused on the economic system as a whole not on
the economic agents’ behavior;
Institutional approach and the construction of the underlying
structure of institutions (the morphology, a term by W. Eucken),
forming the basement of economic systems;
Comparative and typological analysis, based on the underlying
structure of institutions;
Hermeneutic methodology, which results in elaborating “ordoliberal
orders” (W. Eucken) or “modes of regulation” (according to
Regulation theory) and understanding real-life economic systems as
special cases of these orders or modes.
URPE, San Diego, USA, January 2013
Marxian approach and Institutional
Matrix Theory (IMT), or X- and Y-Theory
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While Marx investigated in details only one type of society and did
not analyze societies with so-called Asiatic mode of production, IMT
deals with all kind of societies.
IMT, or X- and Y-theory, rejects Marxian economic determinism in
favor of a more open-minded approach to social and political
causality and the creation of history.
We follow Marxian historical materialism but admit that thought
processes initiate human historical activity and praxis (Cox, 1996).
So institutions are objectively (materialistic and historically)
determined and also ‘human–made,’ which involves subjective and
teleological features.
After Marx, we are regarding society as a structured whole with
three main spheres – economy, politics and ideology. Aggregations
of interrelated basic economic, political and ideological institutions
are defined as institutional matrices.
URPE, San Diego, USA, January 2013
Main assumptions of Institutional Matrices
Theory (or X- and Y- Theory)
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Each sphere (economy, politics and ideology) is
regulated or guided by a particular set of basic
institutions made-in-a-society’s image (i.e. reflexively).
Economic, political and ideological institutions represent
the “institutional matrix” of human societies and as such
can be studied by political economists, economic
sociologists and other scholars.
Two main types of institutional matrices can be
identified: the X-matrix and the Y-matrix.
URPE, San Diego, USA, January 2013
X- and Y-matrices
Redistributive economy
X
Y
Market economy
* Redistributive economy with the Center * Market (exchange)
mediating economic transactions
economy
* Centralized political order
(top-down model)
* Federative political order
(bottom-up model)
* Communitarian ideology
(We over Me)
* Individualistic ideology
(I over We)
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Institutions of X- and Y-matrices
in the economy and their functions
Functions of institutions
X-institutions
Y-institutions
1. Regulating access to
goods (property rights
system)
Supreme conditional
ownership
Private ownership
2. Transfer of goods
Redistribution
(accumulationcoordinationdistribution)
Exchange
(buying-selling)
3. Interactions between
economic agents
Cooperation
Competition
4. Labor system
Employed (unlimited
term) labor
Hired (short and
medium term) labor
5. Feed-back loops
(effectiveness indexes)
Cost limitation
(Х-efficiency)
Profit maximization
(Y-efficiency)
URPE, San Diego, USA, January 2013
Institutions of X- and Y-matrices in politics and
their functions
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Functions of institutions
X-institutions
Y-institutions
1.Territorial administrative
organization of the state
Administrative system
(unitarity)
Federative structure
(federation)
2. Governance system
(decision making)
Vertical hierarchical
authority with Centre on
the top
Self-government and
subsidiarity
3.Type of interaction in the
order of decision making
General assembly and
the rule of unanimity
Multi-party system and
the rule of democratic
majority
4. Access to governing
positions
Appointment
Election
5. Feed-back loops
Appeals to higher levels
of hierarchical authority
Legal suits
URPE, San Diego, USA, January 2013
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Institutions of X- and Y-matrices in ideology and
their functions
Functions of institutions
X-institutions of
communitarian ideology
Y-institutions of
individualistic
ideology
1. Core principle of social
action
Collectivism
Individualism
2. Normative
understanding of social
structure
Egalitarianism
Stratification
3. Prevailing social values
Order
Freedom
4. Labor attitudes
Well-being-oriented
Pecuniary-oriented
5. Principles of common
thinking
GeneralizationIntegralism/Holism
SpecializationAtomization/Mereism
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Combinations of X- and Y-matrices
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Y
Y
X
X
Russia, China, India,
most Asian, Middle Eastern,
Latin American as well as
some other countries
Europe and Western
Offshoots: the USA,
Canada, Australia,
and New Zealand
URPE, San Diego, USA, January 2013
Why do X- or Y-matrix institutions prevail?
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The material and technological environment of a
society is a key determinant for the prevalence of
either X- or Y- matrices.
The environment can be a communal, indivisible system,
under which the removal of some elements can lead to the
disintegration of the entire system, OR
 The environment can be non-communal, that is, with
opportunities for technological division and possibilities for
separate individual usage.
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In a communal environment the X-matrix institutions
are dominant and the Y-matrix institutions are
complementary. In a non-communal environment it is
the opposite.
URPE, San Diego, USA, January 2013
Institutional matrices’ lock-in
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The IMT/X&Y-Theory approach accepts two models as suitable
for a nation’s characteristics. It contends that attempts to impose
an institutional framework (‘lock-in’) on a society that does not
have the same institutional parameters will lead to unsuccessful
and potentially damaging results;
IMT/X&YT suggests that even if the ‘wrong’ institutional
structures are artificially or externally constructed in a nationstate, in the long-run these institutions will fail (or will be
superseded by the predominant institutional matrix).
“The economies of scope, complementarities, and network
externalities of an institutional matrix make institutional changes
overwhelmingly incremental and path dependent.” – Douglass
North (1993)
URPE, San Diego, USA, January 2013
Preservation of the leading position of one or the
other matrix in the history of nation-states
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Historical research shows that the prevalence of one or the
other matrices has a steady character. Even if, by virtue of
external pressures or under influence of distorted internal
reasons, attempts are made to replace one dominant matrix
(X- or Y-) with the other subordinant matrix (Y- or X-), such a
situation of outright reversal is, as a rule, short-lived (in
historical time). For example, attempts at systematic
institutional change in Eastern Europe under influence of the
USSR or the countries of Latin America under pressure of the
USA.
URPE, San Diego, USA, January 2013
Proportion of GDP produced by countries with a prevailing X- and Y-matrix, 18202010 (Maddison Data Base, sample of 34 nations~75% of World GDP)
X-matrix countries: China, India, Japan, Brazil and former USSR countries.
Y-matrix countries: Western Europe including Austria, Belgium, Denmark, Finland, France, Germany,
Italy, the Netherlands, Norway, Sweden, Switzerland and United Kingdom, and
Western Offshoots including the United States, Canada, Australia, New Zealand.
70%
60%
50%
Percentage in global GDP
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40%
X-GDP
Y-GDP
30%
20%
10%
0%
1820
1850 1870 1890 1910 1930 1950 1970 1990 2010
URPE, San Diego, USA, January 2013
Conclusion
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We do not reject outright “capitalistic (marketization) economic
doctrines” but recognize the failure of these doctrines to
understand “everything and everywhere” in political-economic
life.
We develop a Marxian-based new systemic institutional
approach in order to deal with actual situations in a wide
range of nations in modern world.
Institutional Matrix Theory, or X- and Y- Theory allows us to
distinguish two types of institutional complexes (so called Xand Y-matrices) that interact complementarily within each
country.
This theory puts forward some new arguments to explain
‘grassroots resistance’ to the capitalistic marketization in many
societies and answers the question “why capitalism triumphs in
the West and fails everywhere else” (Soto, 2000).
URPE, San Diego, USA, January 2013
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Thank you for
your attention!
kirdina@bk.ru
www.kirdina.ru
Thanks Dr. Gregory Sandstrom (the Social and Political Sciences Department
of the European Humanities University, Lithuania) for both his significant
comments and careful work editing this translated text and making
constructive suggestions in the English language.
URPE, San Diego, USA, January 2013