The Creation, Interpretation and Contestation of Institutions — Revisiting Historical Institutionalism

Abstract

Abstract One shortcoming of much of the historical institutionalist literature is its alleged lack of testable propositions and the elusive notion of ‘unintended consequences’ of initial institutional choices. This article, which offers an historical institutionalist explanation of institutional creation and operation, aims to overcome these shortcomings. We develop a set of propositions and demonstrate their plausibility by exploring the creation of the European Community's budgetary treaty in 1970 and the operation of the enacted treaty provisions. We demonstrate that, under specific conditions, actors may be doomed to opt for ‘dysfunctional’ institutions at the moment of their creation. Furthermore, we show that the notion of ‘unintended consequences’ does not necessarily help us to understand the reason for the contestation of treaty provisions.

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