Institutions, Geography, and Economic Life

Institutional approaches to understanding economic activity have become widespread in recent years. Both economists and economic geographers have embraced the idea that institutions shape, constrain, and enable economic behaviour, and that the nature of this relationship will vary according to the institutional architecture of particular geographical spaces. While much work has focused on national institutions, geographers have shown interest in the role and influence of regional institutions in shaping economic behaviour. Economists have largely confined their analysis to how formal national institutions shape aggregate outcomes of nation states. While geographers have begun to focus on the question of how regional institutions interact with national institutions, the analysis still remains preliminary and tentative. Equally pressing questions pertain to the processes of institutional change—both regional and national, the role and influence of individual agency, and the extent to which the path and direction of institutional evolution are predictable.