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Chapter 1
such a framework, institutions develop in the process of approaching a game equilibrium, then being crystallized as explicit objective rules. The important thing to underline is that the approach suggested by Aoki (2007) does not contradict V. Smith’s (2010) view of institutions. However, V. Smith’s (2010) framework seems to be more relevant to the present discussion. It naturally incorporates both the notions of constructivist and ecological rationality in governing the process of social exchange, putting more emphasis on the formal institutional framework design. Respectively, the formal institutional environment is assumed to be exogenous in the short-run perspective, being the product of central authorities’ design and carrying the role of the “variety generator”. Correspondingly, social norms, triggered by the changes in the external environment, are adjusted and calibrated. Still, formal institutions are also subject to natural selection in the long-run perspective: unless they are not designed in line with the principles of social sustainability, sooner or later, there will be no society to serve as a medium for the particular formal institutional framework33.
1.6. The principles of reductionism and methodological individualism in the neoclassical research program Verschuren (2001) describes the reductionist approach as the paradigm based on the idea that any complex system can be decomposed into the basic elements and studied through analysing the elements mentioned above. According to Trout, “reduction is often formulated as the claim that some object, state, process, event, or property “is just” or “is nothing more than” the physical ingredients that compose it” (Trout, 1991, p. 387). Following the notion of predicate reductionism (Trout, 1991), no complex system can possess any features other than features of its components. Silberstein and McGeever (1999) distinguish between the strong and the weak form of ontological reductionism. The former entails that the complex system is nothing but the sum of its elements, while the latter also incorporates the effects of interactions between the agents. Nevertheless, the perfect micro-determination is assumed. To make this more relevant to the present discussion, the process of social interaction is frequently assessed under the conventional game theory framework under the neoclassical research program. Although such a framework includes the Although Smith (2010) attributes the role of variety generator to constructivist rationality, leaving the task for appropriate institutions selection to ecological rationality revealed in the process of social exchange, the latter idea about natural selection of formal institutions is not presented explicitly. Nevertheless, since it naturally arises from what Smith (2010) discusses, it shall not be presented as the product of own effort.
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