A Structural-Institutional Reading of Rational Choice Theory
Subject Areas : New theories, methodologies and approaches in political science
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Abstract :
As a grand theory within the realm of social sciences, rational choice theory enjoys much importance while simultaneously being continuously criticized due to methodological individualism and the reductionism derived from such an epistemological base. The aim of this article is to present a reading of rational choice theory framed within a structural-institutional setting that could add new explanatory capabilities to it. The paper is evaluative in approach and based on rational argumentation.
In a nutshell, the article first outlines an overview of the ontology of institutions and social structures. Using a structural interpretation of methodological individualism—termed structural individualism—it puts forward a version of rational choice theory explaining how the preferences of actors are constituted within institutional and structural frameworks. This paper extends, using the perspective of socialized ontology, the conventional view of structure understood within social sciences—defining how the interconnected levels of structure and institution interface with the agent.
In fact, the article reaches an integrative narrative through an incisive evaluation of prevailing theories and analyses in the social sciences, showing the explanatory levels of agency, institution, and structure—in turn divided into soft and hard structures. It concludes that agents are dialectically always in a relationship with institutions and soft structures, always affecting their genesis and perpetuation as well as being influenced by them, and thus a similar dynamic relationship is conceivable between institutions and soft structures. Particular social structures give rise to particular forms of institutions, and the state of institutions and its possible changes gradually affect further the condition of the soft structures. But all these interactions take place according to the opportunities, constraints, and possibilities brought about by hard structures, which, in any case, regulate the actor agency.
Rational choice theory, one of the grand theories in the field of social sciences, is significant but has been criticized for its reliance on methodological individualism and its reductionist nature stemming from this epistemological foundation. The goal of this paper is to offer a novel interpretation of rational choice theory within a structural-institutional context in order to enhance its explanatory power. The article’s reasoning method is based on rational argumentation. By reviewing the ontology of institutions and social structures, and utilizing the reading of methodological individualism within a structural context under the title of structural individualism, the paper offers a narrative of rational choice that explains how the preferences of actors are shaped within an institutional and structural framework. The paper extends the concept of social being and moves beyond the conventional understanding of structure in social sciences, showing the interconnected levels of structure and institution with the agent. By evaluating some of the common theories and analyses in social sciences, the paper reveals the different explanatory levels of agency, institution, and structure (at both the soft and hard structure levels) within the integrated narrative. The paper concludes that agents continuously engage in a dialectical relationship with soft institutions and structures, and while influencing their construction and continuity, they are also affected by them. Such a relationship is also conceivable between soft institutions and structures. Specific social structures lead to the formation of certain types of institutions, and simultaneously, the status of institutions and their potential changes gradually affect the status of soft structures. However, all these influences operate within the possibilities, opportunities, and constraints that the hard structure provides for agents.
Introduction
Rational choice theory is one of the key theories in the social sciences that seeks to explain human behavior based on logical and rational analyses. This theory initially emerged in microeconomics and later expanded to other fields such as sociology and political science. According to this theory, humans are rational actors who make decisions with the aim of maximizing personal benefits.
Although this theory has been successful in analyzing individual behavior under simple conditions, it faces significant shortcomings when dealing with more complex social, historical, and cultural issues. Its overemphasis on individual rationality and neglect of the role of institutions and social structures have made it ineffective in explaining macro-level phenomena. This paper aims to address these shortcomings by proposing a new approach called "structural individualism," which focuses on the interaction between the individual, institutions, and social structures.
Objective and Innovation of the Paper
The aim of this paper is to reconsider rational choice theory within a structural-institutional framework. By introducing the concept of "structural individualism," it seeks to overcome the limitations of methodological individualism. In this framework, human behavior is analyzed as the result of the continuous interaction between individual agency and institutions and social structures. The main innovation of the paper is that it examines human behavior not as an independent action but as part of social and historical dynamics.
Theoretical Framework
Structural Individualism: The Link Between Agent and Structure
In the "structural individualism" framework, it is assumed that human choices are never made in a vacuum. Unlike the traditional rational choice approach, which views human decisions as completely independent and logical, this framework emphasizes that human behavior is shaped within a social and historical context.
In this framework, the individual is still recognized as a rational actor, but their choices are always influenced by institutions and social structures. In other words, individual preferences are not only the product of individual rationality but the result of interactions with the social and cultural environment.
Hard and Soft Structures
Social structures are divided into two categories:
- Hard structures: These include geographical, climatic, and natural resource factors. These structures are relatively stable and directly influence behavior. For example, communities with access to water resources experience different economic and social patterns than those living in arid regions.
- Soft structures: These include institutions, norms, and social values, which are dynamic and flexible. These structures can undergo transformations in interaction with human behavior.
Institutions and Social Rules
Institutions are defined as sets of rules that guide human behavior. These rules can be formal (such as laws) or informal (such as cultural norms). Unlike traditional views that treat institutions as static, this paper regards institutions as dynamic. Institutions not only shape human behavior but also change under the influence of human activity.
Critique of Rational Choice Theory
Traditional rational choice theory faces several fundamental challenges:
- Inability to Analyze Changing Preferences: This theory assumes that human preferences are fixed and independent of the social environment. In reality, human preferences change in interaction with social and cultural factors. For example, in a traditional society, collectivist values prevail, whereas in a modern society, individualism becomes more prominent.
- Neglect of Structural Constraints: This theory assumes that humans always make decisions under equal conditions, free from external constraints. In reality, factors such as poverty, discrimination, or class structures can limit available choices.
- Disregard of Historical and Social Context: Human decisions occur within specific historical and social contexts. Traditional rational choice theory ignores factors such as economic crises, wars, or cultural changes.
Historical Examples: The Impact of Structure and Institutions
- Colonization in North and South America: Colonization in North and South America experienced different paths. In South America, the presence of rich natural resources like gold and silver led colonizers to create exploitative institutions. In contrast, in North America, the lack of similar resources led to the creation of institutions based on private property and political participation.
- The Industrial Revolution in England: The Industrial Revolution demonstrates the interaction between hard and soft structures. With rich natural resources like coal and institutions such as property rights and free markets, England became a leader in industrialization.
- The Black Death in Europe: The outbreak of the Black Death in the Middle Ages, which drastically reduced the population, altered social and economic structures. In England, the labor shortage led peasants to demand better conditions from landowners, challenging the feudal system. This change was less noticeable in Eastern Europe, where social structures were less flexible.
- Educational Systems in Different Societies: Differences in educational systems also illustrate the impact of institutions on human development. In Japan, a centralized educational system emphasizing collectivism and discipline created an efficient workforce for economic growth. In contrast, in Scandinavian countries, an emphasis on creativity and individual freedom led to broader human development.
Conclusion and Implications
This paper demonstrates that traditional rational choice theory is insufficient for analyzing social and historical behavior. The concept of "structural individualism" provides a more comprehensive framework for analyzing human preferences and behaviors within social and historical contexts, focusing on the interaction between individuals, institutions, and structures.
Theoretical and Practical Implications:
- Transformation in Theory Building: This approach can help provide more accurate analyses of human behavior and social changes.
- Smarter Policymaking: Designing policies that simultaneously consider individual interests and social impacts becomes possible with this framework.
- Foundation for Interdisciplinary Research: This framework can be effectively employed in social, economic, and political studies as a useful tool for research.
Keywords: rational choice, methodological individualism, structural individualism, institution and structure.
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