Institutional Sclerosis

Institutional sclerosis is the progressive loss of economic and political adaptability that Mancur Olson identified as the characteristic long-term trajectory of stable democracies. As distributional coalitions accumulate, each securing favorable rules for its members, the aggregate weight of institutional protections and privileges grows. New activities become harder to initiate. Existing activities become harder to reform. Resources flow toward preservation of established arrangements rather than toward adaptation to changing conditions. The economy slows not because its actors have lost their capabilities but because the institutional environment has accumulated too many vetoes, too many privileges, too many protected positions to allow productive reallocation.