Institutional change in economic geography

This paper develops a rigorous concept of institutions to investigate the interrelationships between institutional and economic change from the perspective of economic geography. We view institutions neither as behavioural regularities nor as organisations or rules, but conceive institutions as stabilisations of mutual expectations and correlated interaction. The paper discusses how economic interaction in space is shaped by existing institutions, how this leads to economic decisions and new rounds of action, and how their intended and untended consequences impact or enact new/existing institutions. The paper explores three modes of institutional change – hysteresis, emergent change, and institutional entrepreneurship.