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1、WHYAREINSTITUTIONSTHE"CARRIERSOFHISTORY"?PathDependenceandtheEvolutionofConventions,OrganizationsandInstitutionsByPaulA.DavidApril1992_____________________________________________ThispaperhasbeenpublishedinrevisedforminStructuralChangeandEconomicDynamics,5(2),1994:pp.20
2、5-220.Pleaseciteandrefertothepublishedtextwhenquotingforpublication._____________________________________________Mostofusareinclinedtoviewpresent-daysocialconventions,andthemoreconsciouslyformalizedrulestructuresthatgovernthefunctioningoforganizationsandinstitutions,inc
3、ludingmanylegalinstitutions,as"carriersofhistory".BythisImeanwesupposemanyofthemtohaveevolvedintotheirpresentformsfromrecognizablysimilarstructuresthatcanintoexistenceatsometimeinthepasttosatisfysomeonceimportantsocialpurpose.Thecommonplaceexplanationofthewidespreadconv
4、entionofextendinganopenhandingreetingastrangerfollowsthisformula:itisthoughttohavederivedfromtheneedtoshowthatonewasnotbearingaweapon,suchasaknife,orcluborarock.Wesupposeittobenaturalthattheconvention,oncehighlyfunctional,atsomepointbecamepurelycustomaryandpersistsevent
5、houghthatoriginalfunctionnolongerisimportant.Anotherinstanceofsuchpersistencecanbecitedinthecaseofaformalinstitution:theU.S.FederalReserveSystemtoday--unlikethecentralbankofothercountries--comprisestwelveregionalbanks,ratherthanasinglecentralbank(possiblywithbranches).A
6、sEugeneWhite's(1985)accountmakesplain,this,andotherfeaturesoftheFed'sorganizationreflectstheinfluenceexercisedinshapingtheoriginal1913legislationbythenationalbanksandtheclearinghouseassociationslocatedinwhatwerethenthemainfinancialcenters.Inaskingwhysuchmodesofhistorica
7、lexplanationshouldbeacceptedascompelling,Iamimplicitlydrawingacontrastbetweenthe"genealogical"explanatorymodeandthe"teleological"methodintroducedbyAristotleandespeciallyfavoredby2neoclassicaleconomists.Theformerlinksthepresentstateofarrangementswithsomeoriginatingcontex
8、t,orsetofcircumstances,andinterpolatessomesequenceofconnectingeventsthatallowthehandofthepasttoexertacontinuin
