CONCEPT
Institutional Entrepreneurship
The deliberate construction of new institutional arrangements by actors who perceive the misalignment between existing rules and current reality — the form of building that determines, during
critical junctures, whether a technological transition produces inclusion or extraction.
North spent the second half of his career grappling with how institutional change actually occurs. His early work demonstrated that institutions mattered. His later work confronted the harder question: if institutions are so persistent, when and how do they change? The answer was not reassuring to anyone hoping good arguments would suffice. Institutional change is driven not by the recognition that change is needed but by shifts in relative prices or bargaining power that alter actors' incentives within the existing framework. When these shifts occur, institutional entrepreneurs — actors who perceive the opportunity and invest in designing alternatives — can translate pressure into innovation. Institutional entrepreneurs are not reformers. Reformers work within the framework seeking to improve its functioning. Entrepreneurs work on the framework itself, proposing new rules, norms, and enforcement mechanisms that restructure the incentive environment. In the language of
You On AI, they are builders — but they build not products or technologies but the rules