The Rationality of Institutional Structures
Abstract
Rationality is one of the cornerstones of modernity and science, however, it has meant a lot of things over the thousands of years of human and social evolution. There was a time when even the word of God as interpreted by the Bible was considered rational. This idea has gone through considerable change even in modern times and this paper starts with the criticism of the modern idea of individual rationality and building on to the idea of society and how rational action results in the formation of social institutions and norms. Next the paper critically analyzes the challenges that the modern idea of rationality has already faced in the light of the development of post-modern approaches in social sciences. And lastly the paper concludes by constructing a ‘pure type’ idea of structured rationality which can be useful in institutional design and critical analysis of institutional failures.
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