414
that human behavior and outcomes are entirely based on a small set of
irreducible building blocks.
While the terms frameworks, theories, and models are used interchange-
ably by many scholars, we use these concepts in a nested manner to range
from the most general to the most precise set of assumptions made by a
scholar. the iad framework is intended to contain the most general set of
variables that an institutional analyst may want to use to examine a diver-
sity of institutional settings including human interactions within markets,
private firms, families, community organizations, legislatures, and government
agencies. it provides a metatheoretical language to enable scholars to discuss
any particular theory or to compare theories.
a specific theory is used by an analyst to specify which working parts of a
framework are considered useful to explain diverse outcomes and how they
relate to one another. Microlevel theories including game theory, micro-
economic theory, transaction cost theory, and public goods/common-pool
resource theories are examples of specific theories compatible with the iad
framework. Models make precise assumptions about a limited number of
variables in a theory that scholars use to examine the formal consequences of
these specific assumptions about the motivation of actors and the structure
of the situation they face.
the iad framework is designed to enable scholars to analyze systems that
are composed of a cluster of variables, each of which can then be unpacked
multiple times depending on the question of immediate interest. at the
core of the iad framework is the concept of an action situation affected by
external variables (see figure 2). the broadest categories of external factors
affecting an action situation at a particular time include:
1. Biophysical conditions, which may be simplified in some analyses to be
one of the four types of goods defined in figure 1.
2. attributes of a community, which may include the history of prior
interactions, internal homogeneity or heterogeneity of key attributes, and
the knowledge and social capital of those who may participate or be
affected by others.
3. rules-in-use, which specify common understanding of those involved
related to who must, must not, or may take which actions affecting others
subject to sanctions (crawford and ostrom 2005). the rules-in-use may
evolve over time as those involved in one action situation interact with
others in a variety of settings (e. ostrom 2008; e. ostrom and Basurto
forthcoming; Boyd and richerson 1985) or self-consciously change the
rules in a collective-choice or constitutional-choice setting.
the set of external variables impacts an action situation to generate patterns
of interactions and outcomes that are evaluated by participants in the action
situation (and potentially by scholars) and feed back on both the external
variables and the action situation.
415
Figure 2. a framework for institutional analysis. source: adapted from e. ostrom, 2005:
15.
the internal working parts of an action situation are overtly consistent with
the variables that a theorist uses to analyze a formal game.
1
this has meant
that colleagues have been able to use formal game theory models consistent
with the iad framework to analyze simplified but interesting combinations of
theoretical variables and derive testable conclusions from them (see acheson
and Gardner 2005; Gardner et al. 2000; Weissing and ostrom 1993) as well
as agent-based models (aBMs) (Jager and Janssen 2002; Janssen 2008). it
is not feasible to develop a formal game (or even an aBM) to analyze the
more complex empirical settings with many variables of relevance affecting
outcomes and of importance for institutional analysis. it is possible, however,
to use a common set of structural elements to develop structured coding
forms for data collection and analysis. and one can design experiments
using a common set of variables for many situations of interest to political
economists and then examine why particular behavior and outcomes occur
in some situations and not in others.
to specify the structure of a game and predict outcomes, the theorist
needs to posit the:
1. characteristics of the actors involved (including the model of human
choice adopted by the theorist);
2. positions they hold (e.g., first mover or row player);
3. set of actions that actors can take at specific nodes in a decision tree;
4. amount of information available at a decision node;
5. outcomes that actors jointly affect;
6. set of functions that map actors and actions at decision nodes into
intermediate or final outcomes; and
7. benefits and costs assigned to the linkage of actions chosen and out
comes obtained.
1 i am much appreciative of the many hours of productive discussions that i had with reinhard selten in the
early 1980s as we started to develop the iad framework about the internal working parts of a formal game that
could be used in the framework.
External Variables
Interactions
Outcomes
Evaluative
Criteria
Biophysical
Conditions
Attributes of
Community
Rules-in-Use
Action
Situations
Figure 2. A framework for institutional analysis. Source: Adapted from E. Ostrom, 2005: 15.