Institutional Change, Collective Action and Cooperation

Institutional change, collective action, and cooperation are closely related. The connection between institutional change and collective action comes from the fact that both democratic political institutions and norms of behavior are collectively chosen: they are the result of a collective action process. Collective action, however, requires a solution to the cooperation problem, for it is usually associated to the Prisoner’s Dilemma, which provides a formal representation of a ubiquitous type of situations that arises when individual interests undermine the collective welfare of the group. Essentially, the pessimistic result of this game is due to the fact that the players, who have a choice between cooperation and defection, prefer to defect, so the “cooperative” strategy equilibrium (P,P) for the one-shot game is Pareto-dominated by (R, R) where the payoffs obey T>R>P>S. This paper suggests a theory of institutional change by advancing a theoretical alternative to escape from the non-cooperation trap. Keyword: Institutional Change, Collective action, Prisoner’s Dilemma, Cooperation.