DEFINING INSTITUTIONS AS RULES TOWARDS A GENERAL THEORY OF INSTITUTIONS.

Esteban Ruizponce Madrid Las instituciones son vida humana objetivada, heternoma, que se independiza de s. Luis Recasens2 Introduction One of the main problems faced by students of institutions seems to be the general conceptual confusion about its nature. This confusion is evidentiated by the ambiguity in the definition of terminological instruments and concepts, due in part to the multiplicity of methodological approaches and theoretical perspectives used in studying institutions, partly due to the general lack of terminological and conceptual systematization observed in the political science. This paper offers a proposal for a terminological and conceptual systematization towards the building of a general theory of institutions. Originally imagined as a claim for legal institutionalism, 3 the paper ended up by proposing the concept of rule presented as a pattern of regularity as the basic unit for analysis for a theory of institutions. The basic idea is that institutions are nothing else than rules or better approached- systems of rules. The paper claims that a reconceptualization of ideas such as rule, norm, law can serve for clarifying our understanding of institutions, solving semantic problems and constructing building blocks towards a more precise theoretical framework. Although recognizing that genealogical, functional or teleological

approaches could complement the proposed idea, this paper is exclusively focused
1

De Legibus, Review of The Harvard Law School Association of Mexico, A.C. Year III, Number 3. Mxico, 2005. Pgs. 110 2 Luis Recasens Sinches, Filosofa del Derecho, Editorial Porra, Mxico, 1996. Free translation from Spanish: Institutions are objectivized human life, heteronomous existence that independizes from itself. 3 I had a first approximation to this idea on my LL. M. thesis: Alternative Design of Legal Institutions to Promote Politcal Development under the supervision of Professor Unger. Harvard Law School, 1994.

on the building of concepts. It is therefore and effort for isolating the essence of institutions at the ontological level. The main goal is to build a precise definition of the object of inquiry. However, such task required foundational theoretical developments, conceptual comparisons and a proposal for classification that are offered as building blocks for constructing a general theory of institutions that are offered as building blocks for constructing a general theory of institutions, that can incorporate systematically the wide of institutions, that can incorporate

systematically the wide range of diffuse concepts and current perspectives in an ordered framework. Notwithstanding then its importance, questions about the origin of institutions, and then its functioning within particular contexts or their products are not matter of this study. Rather, its aim is one of ordering ideas under a consistent logic paradigm to produce clarity, precision and systematization. Although the contribution of the paper intends to be far beyond the solution to the semantic problems of the topic, a simple ordination of currently existing concepts into a systematic framework seems to be valuable enough to justify the research. However, the paper can be considered as a first step in developing the intellectual apparatus general theory- for a new conceptualization of the social phenomena through institutions. An additional contribution, intended to be specially useful for the seminars feedback is the intentional selection of alternative literature mainly originated in sources of Legal Theory, State Theory and Philosophy. The particular goal here is to complement the bibliography of the very interesting and useful approaches of the three new institutionalisms in current political analysis. Although some authors were inescapable, the paper preferably presents as sources the references of texts normally omitted by American literature, under the assumption that such import would enrich and complement the dominant view of the topic. The paper is divided in three chapters. The first is devoted to set the foundational paradigm that justifies the election of the concept rule as basic unit of analysis. The second develops a consistent extrapolation of the concept rule into a systematic exposition of patterns of regularity. This chapter offers a

classification when developing the argument for identifying institutions as complex, abstract and autonomous systems of rules. It also builts a distinction between the concepts of institutions and organizations and explains the relevance of the level of formality as a precise criteria for the classification of norms. The final chapter accommodates the basic building blocks for a general theory of institutions as rules, preparing the field for a synthetic definition of institution, that is offered as conclusion. I. RULES AS THE UNIT OF ANALYSIS.

1.1

Parmenides: the Foundation Stone.

Although interesting by its implications, conclusions and practical consequences, the central idea presented here is a theoretical apparatus. For building of a general theory of institutions as systems of social rules it is indispensable to begin at a foundational level. Lets take as a starting point and original ideal derived from the Greek concept of ,4 cosmos or order. The Greeks had a high conception of the universe as order. They imagined the world as a set of subjacent rules overlapping at different dimensions of existence: rules for gods, rules for men, rules for things and rules for these rules. Their intuition signaled everything with and underlying rule. For Pitagoras of Samos, the numbers and its rules were the key behind music, architecture and life. For Heraclitus of Efeso, the rules of permanent change were the secret of existence and for Parmenides of Elea, the logical principles of identity and noncontradiction and his dual conception of the world as sensible and intelligible were the basic ruling of the divine code of the cosmos. From these conceptualizations, Parmenides idea of the duality of the world better serves as initial stone for introducing the thesis of this paper: Parmenides practically invented the concept of concept. He argued against Heraclitus that

Manuel Garca Morente. Lecciones Preliminares de Filosofa, Editores Mexicanos Unidos 1978 p.80

behind the apparent chaos of the sensible world in permanent change, it existed and underlying order defined by a unique, eternal, and unchangeable being. While things appear to our senses as multiple, dynamic and chaotic, human understanding opposes to all phenomena the basic principles derived from logic. While the sensible world is out of the reach of human understanding and appears to the senses as the kingdom of chaos, the intelligible world the reach of human knowledge and appears to the mind as the kingdom of cosmos. The sensible world is the one that we see and we touch but that we cannot understand. On the other hand Parmenides proposes a world that we dont see and we dont touch, but that we can understand, because is subject to the rules of logic: identity and notcontradiction. This is the intelligible world, the world, the world concepts, the world of thinking. Parmenides concludes paradoxically- that the latter is the authentic one in the human experience. The former is just an illusion caused by our imperfect senses. The great corollary of this philosophy is that the essential properties of the being are the same essential properties of thinking. All can be summarized in the axiom One and the same thing is being and thinking. Eleas school is the remote precedent of both Rene Descartes rationalism and Hegels and Kants idealism where all real rational and all rational is real. This is the philosophical premise that we recognize as a root of this papers proposal to wich we now turn. 1.2 Rules as Understanding.

The human mind cannot understand or learn from chaos. There is a frame in the mind that makes order on things to be assimilated as knowledge. Thinking is organizing things in the mind. First, elaborating unities of analysis by creating concepts, as general abstractions from reality. Second, by inter-relating these concepts with one another. Third, by creating new concepts from this associations. Fourth, by preparing a frame for channeling new information and fifth by confronting new empirical data.

A relevant implication arises: all human knowledge is ordered according to some rules to be internalized as human understanding.

1.3. The Unit of Analysis: Rules as Patterns of Regularity.

Once the drafted of this rapid synthesis of a theory of mind allow us to assume as valid the paradigm of a logic order in the real intelligible world of concepts, a relevant implication arises: all human knowledge is ordered according to rules. All reality has to be ordered by rules to be accessible by human understanding. Furthermore, rules are the raw matter for interpretation of the world. But an additional element has to be considered: rules can serve as conceptual atoms in the building of theory. The main objective of this paper is to deal with a clarification of basic concepts towards a general theory of institutions. This paper proposes the use of the concept of rule as the social level as the unit of analysis for a better understanding of institutions as sources for interpretation of regularity and predictability of human conduct. Besides the impressive discovery of some Rules of Functioning in the Mind. As factor of thinking that seems to close the circle for rationalists it is relevant for this papers to focus on the effects side of the paradigm: the possibility of a general theory of rules as consequence of thinking. The main point is to prove the validity of the concept of rule as basic unit of analysis for developing a general theory of institutions. The syllogism goes as follows: First premise for anything to be understood by humankind it has to be ordered. Such ordination causes a framework. Such a framework is structured by rules. Second premise: Rules are conceptual unit of analysis that can be integrated into a wider scheme. Such as scheme shall be constructed as a systematic container. The container is structured in sets of rules. Final conclusion: A systematic understanding of the concept of rules and rules ordered as sets can help us in understanding reality. Reality can be analytically fragmented at its social sphere.

II.

ARTICULATING THE CONCEPT OF RULES INTO INSTITUTIONS.

2.1.1. LAWS OF NATURE.

Precisely because the main focus of the paper is within the scope of the social sciences, our generalizations about rules begin with the analysis of Natural Laws. The point pursued by including rules that dont lead to the creation of institutions is to evidentiate the application of the principle of order both to observed and intended patterns of regularity. Eluding the large epistemological discussion deserved by the conceptualization of Natural Laws can be offered as a clear example of so called Natural Laws can be offered as a clear example of the application of the idea that concepts reshape the world, for making it accessible to human understanding, and that such ordering is produced by using rules as unit of analysis. Perhaps contrary to commons-sense, this paper claims that Natural Laws are not in nature, but in our minds that interpreted some facts from the world natural phenomena in this case- as ordered systematic patterns of regularity. Obviously it can be said that the original data comes from the sensorial world where the rules are embedded. This is not the point of discussion. Of course the rules are embedded in nature, but the claim for this argument is that they become acting laws just up to the moment that human mind extracts from them some sense, by abstracting the concepts, isolating the phenomena, and relating it with prior information towards the construction a systematized new body of knowledge, oriented no only to interpret, but also to transform reality. The central point of the argument would rather be that the intellectual apparatus that is built by the human mind, further develops itself independently of

its original empirical cause, growing both at the level of abstraction and at the level of applied theory that feedbacks reality. Although the building of these rules is normally assumed under the idea of discovering rather than under the one of invention, it is clear that the constructed intellectual apparatus is a new autonomous creation, independent from its sensorial origin. The key argument in defending this eccentric view if offered by the creation not only of before-unexistan concepts, but also by the re-creation to the world with before-unexistan realities: by systematizing the rules and developing frameworks, humankind has acquired the capability of transforming the world by re-shaping reality. All technological advancement is offered as evidence of this added value created through systems of rules concerning nature in this case- that appear as new independent entities with own life. The consequence of this discussion about natural laws is relevant of conceptualizing institutions by analogy: once rules are abstracted and integrated as a system, they pass to form a different entity with its own-life, independent of its origin, and with added power to influence in return the world that originally offered that raw matter for this construction.

2.1.2. LAWS OF SOCIETY: HUMAN NATURE. It similarly occurs with the natural laws of society. Once assumed the principle of order discussed above, it is clear that the ambitious original pursue of the founders of sociology as the physics of society was to discover the internal logic embedded in the functioning of society, inventing the rules to be systematized into a new corpus of knowledge with transformative capabilities. Contrary to most of the products of social sciences that offer theories whose validity is relative to some formative context, there are a limited number of discoveries about human nature that appear to be a constant regardless of time and place. Durkheims division of labor sociology; Parettos theory of Power and Elites in political science and Chomskys theory of Generative Grammar in linguistics are among the few laws proved to rule the social world. These rules

are the hierarchical equivalent to the described laws of nature and belong to the world of what Hans Kelsen calls the world of being, Herman Heller calls normality and I call observed regularity in opposition to their corresponding contraries: world of shall being and normativity that I will call intended regularity. Arguably the hierarchical equivalent between both laws of nature and society is proposed on the basis of their universality and objectivity. If accepted, the existence of such laws, their descriptive form coupled with its embeddedness in human nature, make them absolute and unchangeable, derived from natural constrains. Mathematics and logic, as language of thinking and abstract formulations, are a good example for sustaining the existence of this unchangeable and universal pattern of regularity shared by all members of humankind. 2.2 RULES FROM THE FORMATIVE CONTEXT.

2.2.1. CULTURAL RULES OF PERCEIVED REGULARITY.

Another set of regularities to be considered is the one corresponding to rules embedded in the formative context of each society, product of history, and tradition. These rules articulate the particular values, views, civic traditions and common past of each society through patterns of regularity embedded in symbols and rituals that we generally call culture. Although most of these rules are not explicitly intended to rule human behavior, and shall not therefore be considered as normative, they do modulate human conduct in a perspective manner. These rules embedded in culture are part of something similar to the collective unconscious that implicitly shapes behavior, acting as a functional unintended regulation that is not evaluated axiologically by society but that rules anyway. Although human product, these rules appear to everyone as given, simply being part of the context. Product of past human action and intention, these rules are present in social routines and perceived as regularity by members of society. These sets of rules change according to cultural evolution, as well as their

perception of normality.5 An extension of these conceptualization can include dominant intellectual paradigms, ideological propaganda and share values promoted and diffused by mass media and education. In all cases the embedded rules affect perception. Although in the short term and within a given society, this type of rules could appear to their contemporaries as natural formations equally strong, universal, eternal and absolute as natural laws or laws of human nature, they rather belong to the cultural world whose validity is limited to the sphere of temporality and relativity. Robert M. Unger offers a lucid explanation: The formative context that I also call and order, framework or structure of social life- exerts a major influence upon the form and course of social routines, including routines as important as the future of the societyA formative context of social life is made up of extended sets of institutional arrangementsThe other component of formative context is imaginative. It consists in a set of enacted preconceptions about the possible and the desirable forms of human association: assumptions about what relations among people should be like in different domains of social existenceA formative context puts a particular version of society in the place of the indeterminate possibilities of social life6 The central point here is that such regularity does not appear to be intended by anyone in society, but rather as a product of history embedded in culture. A complex argument for disclosure of their intentionally shall be done. It is important to point out that such regularity is valid just because it is perceived as such. These two characteristics cross an essential qualification of these rules as relative in opposition to the mentioned Laws of Society that claim universality, objectivity and untemporality. Rules of Perceived Regularity are neither objective nor universal or embedded in human nature, although sometimes they are perceived or defended as such by insiders, constituting what Roberto Unger calls the imaginative part of the formative context, that is always an artifact
5

Michelle Foucaults Archeology of Knowledge, in Paul Rabinows introduction to Foucault Reader, Pantheon Books, New York, 1984, p. 1-276 Roberto M. Unger. False Necessity, second book of Politics, a Work in Constructive Social Theory, Cambridge University Press, 1987, p. 58.

although it happens to appear as given. The other part of the formative context requires particular attention to which we turn now.

2.2.2. ETHICAL RULES OF INTENDED REGULARITY: NORMS.

At this point a delicate jump becomes necessary for further generalization of rules, because a different kind of abstractions of regularity are to be incorporated to a complete conceptual framework of rules: There are some rules that dont have as their original impute an empirical phenomena embedded in the world of nature or society, but rather a conception of values and paradigms accepted as desirable by some societies in a particular historical context. Those rules or intended regularities belong to Kelsens world of shall being or to Hellers level of normativity. They are specifically designed to rule human behavior and interaction. Although they follow a process of creation by abstraction, similar to the one described concerning natural and social laws, these rules count with the additional element of being product of explicit human intention and constitute the other product of explicit human intention and constitute the other part of Ungers definition of the formative context as extended sets of institutional arrangements. This set of rules are normative because they are intended to regulate human conduct by a dialectic process that 1) uses social reality as thesis: capturing and abstracting the empirical phenomena of human behavior; 2) uses a particular ethical conceptualization as antithesis: opposing o the social phenomena a set of social values, and 3) synthesize a desirable behavior in a norm of conduct or rule of intended regularity whose fulfillment is expected and otherwise enforced. Therefore, the logical structure of the norm is: If A is B shall be; otherwise C. Where A is a fact of reality, B is the normative conceptualization, and C is the sanction. This logical structure is presented at several levels of formality that serves as the right criteria for their classification. As explained below,

among the wide range of existing Rules of Intended Regularity at least four normative orders can be identified: Juridical, social, religious and moral. All four dimensions of norms generate social behavior through the formalization of ethical reason and its societal scale of values. All three steps of the dialectic process are defined within the historical context of a given society because they are particular historical products.7 This is the cause of James Colemans statement: The concept of a norm, existing at a macro social level, provides a convenient device for explaining individual behavior, taking the social system as given8 This is why these norms are also relative, because its validity and its enactment as institutions is limited to a particular historical moment in particular society. In a similar direction Huntington defines: The institutions are the behavioral manifestation of the moral consensus and mutual interest.9 Both elements moral consensus and mutual interest- refer to the transformation of social routines and ideological values in normative frameworks determined by the ethical paradigms of a particular society. Finally, the norms of rules of intended regularity are indeed artificial, because essential to the nature of these rules is that its matter is not particularly determined by empirical basis, but rather specifically rooted in ethical conceptions for organizations society with the aim of gaining predictability in human conduct combating the essential uncertainty derived from the behavior of beings attributed with freedom. 2.2.3. PRAGMATIC RULES FOR RGANIZED REGULARITY. A final set of rules emerges from the social context. While norms or the Rules of Normativity are explicitly created to respond to the ethical paradigm of society, Rules of Organized Regularity are explicitly created to respond to the practical paradigm of the formative context. Although each one responds to different rationale both are Rules of Intended Regularity embedded in the social formative context and created to transform it. While the former Rules of Normativity7 8

Herman Heller. Teora del Estado, Fondo de Cultura Econmica, Mxico (1934), 1987, p. 199. James Coleman, Foundations of Social Theory, Harvard University Press, 1990. P. 241. 9 Samuel Hungtinton, Political Order in Changing Societies, Yale University Press, 1968, p. 10.

perform under the axiological sphere of society, the latter Rules of Organized Regularity- perform under the logic of pragmatic reason. The Rules of Organized Regularity are created to respond to practical problems presented by the formative context. While the Rules of Normativity use norms to frame values and the Rules of Perceived Regularity use symbols to feedback cultural settings, the Rules of Organized Regularity perform their task by allocating resources and entitlement, to solve practical problems of collective action. This last kind of rules can be also called corporative or constitutive because they tend to create tangible entities in the process of organizing resources and entitlements. Although the rules are again- a separate abstract apparatus that determine the relations among sets of elements, the Rules Organized Regularity can be called organizations. This idea is further developed below. Finally, it is important to point out that, although all three qualities of artificial rules from the formative context can be analytically distinguished with precision, they indeed interact in reality and can even evolve from one type to another because as Herman Heller asserts: Al human organization perdures to the extent that it is re-created10

III.

B. Implications.

2.3. Norms Classified by its Level of Formality. An important omission in analyzing institutions as rules, is a more systematic focus on its level of formality. As norms, institutions can assume different form and different levels of formalization: the same normative prescription can be contained in a moral, a religious, a social and a legal Rule. Different level of formalization creates several overlapping frameworks of moral consensus and mutual interest11 reinforcing often the same axiological content.

10 11

Herman Heller, Teora del Estado, Mxico, Editorial Fondo de Cultura Econmica, 1987, p.268. Samuel Hungtinton, Political Order in Changing Societies, Yale University Press, 1968, p. 10.

A consistent theoretical systematization has to be base on both a clear conceptualization of the elements of a system and on the right section of the criteria for classification. One of the main claims of this paper is the clarity, precision and consistency are often missed in the study of institutions due to lack of clear conceptualizations and adequate criteria for its systematization. Concerning the normative order of the rules of intended regularity the most frequent mistake is to intend a classification of norms and institutions by tis content or objectives ignoring that It has never beenits normative content the decisive element in distinguishing all different species of norms. Instead, it is the authority to which the establishment and warranty of such norm is attributed12 So wide is the scope of human intention that a criteria of classification based on of human intention that a criteria of classification based on of human intention that a criteria of classification based on content can lead to enormous and useless catalogues of norms. Similar result is obtained if a classification of norms is done on a simple dycotomical basis without ontological justification. For example, although useful in principle, the binomial classification of norms into regulatory and constitutive13 lacks analytical importance if excluding arbitrarily a whole system of norms just because they are idiosyncratic and furthmore, a dual classification of social norms into individual and social produces a weak framework if any- without any clarity, consistence and systematic precision, situation that evidentiates a lack of understanding of the social phenomena. 14
12 13

Herman Heller, Teora del Estado, Mxico, Editorial Fondo de Cultura Econmica, 1987, p. 201. Originally owed to Maurice Horiou. See: La Teora de La Institucin y la fundacin, op. Cit. 14 This critic is directed to Jack Knights Institutions and Social Conflict, Cambridge University Press, 1992, p. 66 83. Although Knights idea of considering Institutions as Social Rules is fully subscribed by this paper, the approach used by author in elaborating his Implications for a Theory of Social Institutions is very poor: This analytical distinction between regulative and constitutive rules is commonly used to distinguish rules that are used to aid action in particular situations from those defining the proper course of action in specific contexts, the institutions; see, for example, Hollis, 1987. To the extent that regulative rules are idiosyncratic rules of thumb, my conception of social institutions would exclude them. As I suggest below, a crucial feature of institutions is that they rules are shared by the members of the community. And some of these institutional rules have more of the features of regulating behavior than of constituting it. Compare a rule that defines a unique course of action from one that, though restricting certain strategies, leaves open a range of strategic alternatives. In defining social institutions a strict regulativeconstitutive distinction is inappropriate (Rawls, 1955). A more suitable distinction is one between

This paper claims that for a classification to be precise and useful, it has to be sustained on an ontological framework directed to the essence of the concepts. This paper proposes to analyze the wide range of rules of normativity by its level of formality, to clarify both the nature of the institution that arises from them and its insertion in a corresponding system of rules, knowing that A norm is a property of a social system15 The criteria proposed here is based on the level of formality of the rule of intended regularity that is determined by the entity that establishes the norm, who puts it in place who does its foundation. The hypothesis is that the channel used in both the process of formation of a norm and its enactment as a pattern of intended regularity, will define the kind of system it belongs to. The particular nature of a norm can therefore be identified by looking at its level of formality. This criteria produces a classification of institutions as norms in four spheres of validity: a) Moral Institutions based on norms established by social values internalized into personal conscience, b) Institutions of Social Coexistence based on norms of political correctness established by community, c) Religious Institutions based on required membership norms established by churches and, d) Juridical Institutions based on obligatory norms established by the state. The usefulness of this criteria and its precision can be confirmed by checking the source of authority of the norm that will also correspond to the system of vigilance and coercion established for tis fulfillment. For example, the norm you shall not kill is simultaneously a moral norm controlled by personal conscience, a social norm sanctioned with repudiation, a religious norm ordered by the church and a legal norm enforced by the state. Depending upon who is in charge of the enforcement of the rule, (personal conscience, society, the church or the state) it is determined to what framework the norm belongs. This is an important point, because it provides for a clearer view of the game: A formative context of social life is partly made up of extended sets of institutional arrangements, some of them organized according to explicit norms,
personal rules that are maintained by individuals to regulate their own behavior and social rules of either a regulative or a constitutive nature that are maintained by the group 15 James Coleman, Foundations of Social Theory, Harvard University Press, 1990, p. 241.

other less articulate16 In the tradition of Continental political science you would expect to interlink institutions within a higher system: the political system and/ or the legal system are the traditional products offered as synthesis of this process. However, while Europeans overemphasized the focus on society. It would be relevant to overcome this dycothomy in a more comprehensive theory of institutions. The concept of formative context coupled with a conceptualization of institutions as rules that include the civil society, the normative system and the state, seems to advance this process of synthesis into a superior theoretical framework. A final point about formality is worth mentioning. As observed, the superior level of formality is the incorporation of routine, a behavior, a consensus, an arrangement or a set of values to the level of legal formality where the state is the guardian that monopolizes public force as legal coercion. In the Roma-Germanic legal tradition, the law is recognized to be not only the source for legal institutions, but the master institution itself17 for its capacity for intended transformations of the formative context. Within the traditional approaches of the nowadays out of fashion European Theory of State
18

law appears as the

institution that provides unity and permanence to the State, 19 recognizing law both as political product and cause of social organization.20 All this arguments seem to be recently discovered by American scholars in a slow transition from the microanalysis, case-oriented, empirical approach, towards a more comprehensive theoretical conceptualization of society and its organization by legal frameworks. Historical institutionalism seems to be working perhaps not on purpose- in this direction.21 I think that some interesting efforts can be done to find a balance using

16 17

Roberto M. Unger, False Necessity, Cambridge University Prees, 1998, p. 58. Arturo Gonzlez Coso, Desbandada hacia el Presente, UNAM, 1990. 18 A long tradition of important political thinkers such as Jellineck, Heller and Kelsen constructed a sophisticated intellectual apparatus for a comprehensive explanation of society and its political organization, using the legal structure of the state as main variable. 19 Herman Heller, Teora del Estado, Fondo de Cultura Econmica, Mxico (1934) 1987. 20 Fernindand La Salle, Qu es una Constitucin?, Editorial Colofn, Mxico, 1990, p. 62 21 Particularly Skocpol (op. Cit.) and its followers.

the legal system as an institutional explanatory variable 22 towards a Legal Institutionalism.

2.4. Difference between Institutions and Organizations. The primary theoretical distinction between organizations and institutions has not always been clear. Both because a system of rules has as an important part of its function the ability to make order or to organize several elements into an observed, perceived or intended regularity; and because all abstract system of rules end up impacting reality in concrete forms; institutions are often confused with organizations. The disorganized coexistence of a multiplicity of points of view, rooted in different conceptual approaches, have create a multiplicity of ideas about what an organization is, and how far or how close its concept is to the one of institutions. While some authors identify both concept as synonyms, others assign to each one very different nature. Intending to solve this confusion, a quick review of the main points of debate are grouped in three arguments that are represent in a discursive manner by three scholars: Rawls, Heller and Horiou. The idea is to gain from each perspective the part of the truth that it holds, while maintaining clarity in the building of a precise concept of organization, consistent with the general theory of institutions as rules presented by this paper.

I)

John Rawls Case for Institutions: Institutions and Organizations are Abstract and Concrete Aspect of the same Phenomena.

The approach that distinguishes both conceptualizations by their belonging to the world of ideas and the world of things is very attractive by its simplicity and clarity. However, most of its exponents have often mistaken the usefulness of the distinction by merging both conceptualizations in a single concept, using the word institution to comprise these two very different realities. Although very clear in its
22

For a discussion on this topic see my LL.M.thesis. Op cit.

focus, this approach has often been a source of confusion due to this semantic incapacity. While the distinction is right, its terminology is wrong. This is a classical approach widely used among legal theorists Harvard Emeritus Jurist John Rawls summarizes this discussions as follows: An institution may be thought in two ways: first as an abstract object, that is a possible form of conduct expressed in by a system of rules, and second, as the realization in the thought and conduct of certain persons in a certain time and place of the actions specified by these rules23 Under this approach an institution results both and abstraction and a concretion, betraying the useful distinction obtained, by dissolving it into the same term. It appears easy to treat the problem as a simple semantic confusion to be solved by re-naming: To the first concept corresponds the term institution and to the second the term organization. Thus, institutions and organizations can be interpreted under this approach as the abstract and concrete aspects of the same phenomena. However, this simple recognizing the substantial contribution of this approach and partially adopting it later- this paper claims that both concepts explain two radically different entities. The first corresponding to what shall be called institution: a system of rules; and the second called organization: a concrete expression of regularity. The confusion is also due to the fact that both conceptual entities share the common substance of the organizational activity as a process that produces order Lets try to solve this problem by using the second approach defended by the European State Theory. II) Herman Hellers Case for Organization: All Institutions Organize or Produce Organization As systems of rules all institutions tend to order or organize several elements. Similarly, organizations as concrete expressions of ordering also perform its duties by organizing. The activity of organizing is considered by the classic
23

John Rawls. A Theory of Justice. Harvard University Press, 1971, p.55.

exponents of the European State Theory as something more than a simple technical procedure. According to this approach, its relevance arises from its creative capacity. Having as a starting point the Aristotelian paradigm of the whole is prior and superior to its parts,24 theorists of the State explain all human cooperation as a structure of collective intention that produces and added value called power. The key point here is that such productions is possible due to an organizational activity that presupposes some ordination by intentional rules. Consequently, in this approach it is the concept of institution the one that is presented by Rawls, by presenting here is perfect opposite. Intending an empirical approach, Herman Heller conceptualizes and organization as an Autonomous Structure where three elements appear to constitute a Collective Action Unit: 1) Human action towards a cooperative ordering of resources, with 2) A normative ordination of that cooperative action that consciously pursues some goals, and that 3) Produces some specific organs devoted to achieve an unitary effect.25 The second element mentioned by Heller is the key to understand the process of absorption of the concept of institution by the concept of organization. When a system of rules of intended regularity or in Hellers words a normative ordination provides the framework for the emergence of a concrete expression of ordering we are in presence of an organization. Therefore, the concrete concept of organization empirically implies in some sense the abstract concept of institution. However, conceptually, the Aristotelian paradigm permits the inverse relationship in theory, as explained below. An organization in its genealogical sense is less than the set of rules that precede it, because it is just a single expression of a wider creative capacity, implied in the mission for intended regularity of the preceding institutional framework, that can be actualized in an infinite number of concrete entities. However, if analyzed as a concrete expression of regularity an organization is more than its precedent set of rules, because its existence implies

24 25

Herman Heller, Teora del Estado, Mxico, Editorial Fondo de Cultura Econmica, 1987, p. 249. Aristotle, La Poltica, Editorial Bruguera, Mxico, 1978, p. 58.

an assimilation of the sense of order of the precedent set of rules, both as the articulative rationale in the coordination of human cooperative action, and in the creation of concrete autonomous entities with an unitary effect. III Horiou: All Organizations are one Type of Institution: Constitutive or Corporative Institutions. However the Contrary is Not True.

A last approach for the conceptual differentiation of organizations and institutions, can be taken from a sociological Continental tradition, internalized by European jurisprudence Although significant contributions to institutionalism were done by relevant European thinkers, -such as Comte and Durkheim- specially in the sociological field, the original foundations for a theory of institutions were perhaps more properly set by Maurice Horiou,26 the French constitutionalist that revolutionized legal theory by introducing the concept of institution to legal dogmatism. Originally a lawyer educated in the classic tradition of French Administrative Law, Horiou introduces the theme as an innovative legal concept useful for better allocating legal attributes and rights to organizations. In Maurice Horious view an institution is the result of the elements of social organizations considered as a whole27 Although perhaps apparently rudimentary to current literature, Horiou seems to be the first to propose a more comprehensive use of this concept as a unit of analysis for socio-legal disciplines. In his 1916 classic book La theorie de linstitution et de la foundation the author proposes an interesting concept: an institution is an idea that finds in a social environment its actualization and persistence. For the idea to be transformed in a concrete reality, a power is created for providing the necessary organs for its existence. Under the direction of such created organs, and according to already

26

In this opinion I follow the lessons of the Mexican humanist Mario de la Cueva, La Idea del Estado, Universidad Nacional Autnoma de Mxico, 1987, p. 153. 27 Maurice Horiou, La Teora de la Institucin y de la Fundacin, Abeledo-Perrot, Buenos Aires, 1968, p. 34.

established rules, several manifestations of adhesion occur among the members of the social group interested in the actualization of the idea 28 The contribution is important: the essence of the institution is that of an idea. Around that idea, organs and persons are gathered, according to some established rules, to create concrete realities. The point is one of clarity: the institution is an idea that can be transformed through rules into concrete reality. Such concrete reality can be identified as an interested social group, adhering to created organs under an effectively ordered structure29 The theoretical result is different if we focus on institutions as products or in institutions as factors. The former idea focusses on organizations, the latter on institutions. Institutions are closer to be the rules of the game, while organizations represent the players. 2.5 Some Precisions and The Concept of Organization.

Additional contributions are worth to mention: Horiou emphasizes the foundational feature of institutions as their primigenious essence: in the simplest terms an institution is something (essentially an idea) that is instituted, founded, established. This point is relevant if considered as the basic notion of autonomy and further independent development of institutions, and its permanence across time, both generally accepted as key features of the concept of institution. Secondly, the institution is a product of history with undefined duration. This proposal can be extrapolated up to the logical necessity of inclusion of institutions within particular historical contexts. Third, Horiou recognized the instrumental capacity of institutions as vehicle for ideology. And finally, to him we owe the first classification of institutions that prevalent even today, in some current American studies.30

28

Mario de la Cueva, La Idea del Estado, Universidad Nacional Autnoma de Mxico, 1978, p. 153. 29 Herman Heller, Teora del Estado, Mxico, Editorial Fondo de Cultura Econmica, 1987, p. 248. 30 Knight recuperates Hollis binomial classification of rules into regulative and constitutive, very similar to Horious. See Jack Knight, Institutions and Social Conflict, Cambridge University Press, 1992, Ch 3. Note 18 in p. 67; and Martin Hollis, The Cunning of Reason, Cambridge University Press, 1987.

According to Horiou, two main types of institutions exist: a) Institution-things, that are ideas that live and diffuse in the social environment but neither become nor generate a proper community because they are not in themselves a principle for action, and b) Institution-person, that is a live social body with internal autonomy that can fulfill by itself its destiny. While the former is identified by Horiou with the legal norms, the latter is also called by him as corporative institution, that can be better identified with the concrete entities conceptualized as organizations. Conclusively, while all institutions are abstract entities or ideas, some of them can become concrete entities, such as the corporative institutions that we identify with organizations. Extrapolating this conclusion it is possible to say that organizations are a concrete species of the wider gender of institutions. III THE CONCEPT OF INSTITUTION AS A SYSTEM OF RULES: TOWARDS A GENERAL THEORY.

3.1. A Rule is a Pattern that denotes Regularity.

The philosophical intuition takes from Parmenides insight on to Hellers systematic structures is that, to the apparent chaos of the world it can be opposed a systematic cosmos of ordered regularity. Such idea can be recaptured now for the task of defining institutions. While Natural laws can be recognized as patterns of observed regularity apprehended by the human mind, rules belonging to the social context appear as artificial patterns of intended regularity, within the structure of the formative context, that reveals a dialectic relationship between the social world as given and the social world as desired. These set of intended regularities are what Douglas North calls the rules of the game in society, or more formally, the human devised

constraints that shape human interaction [and that]reduce uncertainty by providing a structure to everyday life31 3.2. The concept of Rule as Basic Unit of Analysis.

According with this approach, the basic unit of analysis for building a general theory of institutions is the concept of rule specifically understood as a pattern that denotes regularity within the formative context of human interaction. These artificial rules interpret manmade regularities of behavior, that reduce uncertainty within the kingdom of free will, by providing a structure to social life ordering symbols, values and resources. Such ordering follows three corresponding rationales: a) rules embedded in civic society, following a historical reason and a cultural tradition, that define the collective identity of a social community, b) rules embedded in the normative system of society, intended to transform it by following and axiological reason, that regulates human behavior for social coexistence, and c) rules embedded in the economic and political organization of societ Such ordering follows three

corresponding rationales: a) rules embedded in civic society, following a historical reason and a cultural tradition, that define the collective identity of a social community, b) rules embedded in the normative system of society, intended to transform it by following and axiological reason, that regulates human behavior for social coexistence, and c) rules embedded in the economic and political organization of society that following a pragmatic reason, tend to create concrete entities for the allocation of resources and distribution of entitlements, providing order and articulation to collective action. These three species of rules are just conceptual abstractions that serve as analytic apparatus to understand and eventually transform- the complex structure of reality in its social aspect. As patterns of regularity they share the internal logic of all rules, as principles of order. But as rules derived from the social formative

31

Douglas North, Institutions, Institutional Change and Economic Performance, Cambridge University Press, 1990, p.3.

context they belong to the world of presumptive regularity, always relative and subject to contingent factors, but always open to intended transformation.

3.3. Institutions as Systems of Rules

But a rule is not by itself an institution. The heuristic value of the conceptualization of institutions as rules rests on the idea of a systematic interaction of several patterns of regularity. This ordering of rules produces a qualitatively different entity with additional value. A single rule cannot be sustained by itself without other rules support. As well as the law of universal gravity: matter attracts in direct relation to the square of the distance in between two bodies, depends on previous conceptualizations about matter, velocity, volume, and theories as entropy, centrifugal force, etc.; the building of institutions also depends on a superior systematic connection among a set of related rules of intended regularity. As John Rawls says: By an institution I shall understand a public system of rules32 A system is not a simple aggregation. It is an interconnection of mutually dependent elements. It is she dynamic version of the scheme, where the movement of each elements affects the position of the other elements, according to a superior mechanism that provides coherent internal logic to the whole. The institutions essence will be better identified as the abstract rationale that provides systematic order to a set of rules of intended regularity. Being the whole necessary prior and superior to its parts33 it is rather the ordered structure that systematizes several elements, the entity that we shall call institution. All independent patterns of regularity are by themselves just parts of a superior institutional whole that provides them with a shared mission and a new ontological quality. Therefore, institutions are just abstractions but abstractions as real as Parmenides intelligible world. Their abstract essence does not prevent them from

32 33

John Rawls, A Theory of Justice, Harvard University Press, 1971, p.55. Aristotle, La Poltica, Editorial Bruguera, Mxico, 1978, p. 58.

performing important roles in shaping reality. By proposing or altering an ordination, the Rules of the Game affect preexisting elements, creating, transforming and destroying routines and arrangements, and even producing concrete entities. 3.4. Institutions as Abstract, Autonomous and Transformative Entities.

A system is also an autonomous ordering of elements, according to some rationale, that produces a new entity, independent of the parts that precede it. By performing its mission, the institution acquires autonomy from its formative context and adopts own life. Conceptualized as such, institutions are autonomous systems of rules or ordered sets of patterns of regularity that exist per se, independently of their concrete expressions. In this sense they are intangible and do not exist as real things, just as concepts. They can be considered as intellectual apparatus inferred from reality and relevant for social rules- intended to alter reality. Once established, institutions in turn have the power of influence the formative context that originally gave them existence by introducing a new ordering for existing elements. In other words, they have a transformative capacity of the context. In fact they are built for that objective. In this sense, all Rules of Intended Regularity perform as reproduces and fixers of both behaviors, ideology and power. However, institutions can be conservative or transformative. Normative frameworks, for example, have the explicit power not only for setting constraining rules of the game limits to public action- but also to encourage or discourage the development of particular trends and impulses, in the materialization of political energy and the transformation of social organization. The assertion does not imply that normative frameworks have power enough by themselves to substantially transform society, but it recognizes their power to generate intended

transformations or controlled affirmations, modifying social impulses, either for reform, or for fixing conservative trends according to the status quo.34
34

Robert M. Unger, Plasticity into Power, Cambridge University Press, 1989.

3.5. Towards a General Theory of Institutions.

Once an institution exists as a new autonomous entity different and essentially independent of its parts, it appears immersed in a wider scenario, where other sets of patterns of regularity in turn interact, in dependency of a superior system. For a conceptual building of a General Theory of Institutions, a crucial step beyond systematization is the incorporation of such systems of rules into complex structures that comprise overlapping order of social regularity towards a superior conceptual synthesis. This was the process that Europeans followed for reaching their concept of State as an historical product that represented for them the supreme synthesis of collective human action. A similar methodology can be used in building a general theory of society, taking institutions as an explanatory variable. Such a theory can incorporate in a consistent framework several theoretical approaches, better interpreting social reality by structures of regularity integrated by rules systematized as institutions. CONCLUSION: A SYNTHETIC CONCEPT OF INSTITUTION.

An INSTITUTION as 1) an abstract 2) whole 3) set of rules of intended regularity 4) interconnected 5) under some rationale 6) into a systematic 7) principle of order 8) that gives them unity 9) and permanence 10) within the structure of a superior formative context. 10) Once established 11) the institution acquires autonomy 12) from its original formative context, 13) appearing as a new complex entity, 14) with creative capacity and 15) own life, 16) intended, 17) to transform reality. 18) Institutions can assume different forms, 19 ) according to their rules: a) prescriptive, b) normative or c) constitutive. 20) The later type serves as a framework of the creation of concrete expressions called organizations.

A CONCEPTUAL PRECISION: INSTITUTIONS VS. ORGANIZATIONS

A CONCEPT OF INSTITUTION GENDER FACTOR RULES OF THE GAME

1. A system of rules intended regularity. 2. A structure for collective intention. 3. Order-organizational design and intention. 4. Abstract, in the world of ideas. 5. Abstract idea An autonomous intellectual apparatus: original proposal 6. A possible form of conduct expressed by a System of Rules: a) Prescriptive. b) Normative. c) Corporative: organizational.

A CONCEPT OF ORGANIZATION SPECIES PRODUCT PLAYERS OF THE GAME

1. A concrete expression of regularity. 2. A Collective Action Unit. 3. Order organizational activity. 4. Concrete, in the world of things. 5. A concretion of the idea plus organs and members: adhesion to the idea. 6. The realization of actions specified by rules: a) Cooperative human action. b) Normative ordination [direction] towards goals. c) Organs: unitary effects. 7. Undefined duration 8. Principles for action. 9. Live autonomous social body. 10. Corporative, constitutive. 11. Synthesis: the State and the Economic Organization. 12. Moore: a) Organizational capacity. b) Concrete [specific] mission. c) Product of authorizing environment 13. You can assign legal attributes obligations and rights- to organizations, not to institutions: somebody will respond.

7. Persistence. 8. Principles of ruling. 9. 9Not a live social body. 10. Normative, regulatory. 11. Synthesis: the Normative Legal System. 12. Horiou: a) Ability as regulatory foundation. b) Instrument for ideology. c) Product of formative context. 13. It is not and cannot be- a legal person. And abstraction cannot be subject law.

CURRICUAL VITARUM

Esteban Ruizponce Madrid

Licenciate in Law (with honors), Universidad Iberoamericana. Licenciate in Political Science and Public Administration, Universidad Nacional Autnoma de Mxico (UNAM). Master in Laws, LL. M. (with honors), Harvard Law School. Master in Public Policy, John F. Kennedy School of Government, Harvard University. S.J.D. (candidate), Harvard Law School. Ph. D. in Political Economy (candidate), Oxford University. Advisor on legal, political and economic matters. Former Assistant Director of the Legal Department, Delegacin Venustiano Carranza, Distrito Federal. Former Director of the Legal Department, Secretara General de Gobierno, Distrito Federal. Former Director of the Legal Department and Associate Director, Radio Televisin y Cinematografa (RTC), Secretara de Gobernacin. Former Attorney, Trust Division of Banco Nacional de Mxico (BANAMEX). Former Director of the Legal Department, Cmara de Restaurantes. Former Legal Advisor, Confederacin Nacional de Cmaras Industriales (CONCAMIN). Lecturer and Professor at several Universities in various countries. Author of articles on Law, Politics and Economics. He also writes essays and novels. He has obtained academic and professional awards, including the Mejores Estudiantes de Mxico Medal, the Premio Nacional de Mrito Acadmico from the Secretara de Educacin Pblica, and the Fulbright, Mac Arthur, OAS, Rowe and Harvard University Scholarships.