Journal of Economic Behavior and Organization 10 (1988) 143-171.

North-Holland

THE TENACIOUS PAST: THEORIES OF PERSONAL AND

COLLECTIVE CONSERVATISM

Timur KURAN*
hiversity of Southern California, Los Angeles, CA 900894035, USA

Received April 1987, final version received October 1987

A number of theories have %eendeveloped to explain why societies do not always adapi to
changing conditions. These are critiqued here, with an emphasis on their substantive and
methodological differences. Some theories ascribe lack of adaptation to personal conservatism,
attachment to the past by the individual members of society. Others invoke ccllwtive
conservatism, the attachment of society as a whole to collective past choices. Methodologically,
the theories differ in the extent to which they resort to optimistic functionalism. A limitation
common to most is that they overlook the feedback from actual choice to individuals’ beliefs
and preferences.

1. Introduction

Although it has been recognized that societies do not always adapt to

changing conditions, serious theorizing on the subject has been a distress-
ingly negl~ted pursuit. But the tide may be turning: scholars reared in
modern methodologies have recently produced a variety ,ofpertinent theories.
I propose here to critique these, with an emphasis on their substantive and
methodo!ogical differences, and with a view toward deriving lessons for
future research.
I ought to mention at the outset that the phenomenon these theories aim
to explain is not recognized universally. At least in their writings, most
contemporary economists overlook the pat h-dependence of our decisions,
and some explicitly deny it. Revealingly, it does not enter the standard
economics curriculum, which fosters the notion that the status quo enjoys no
advantage over its alternatives. The proponents of the theories I cover here
disagree: they share the belief that our decisions tend to be sticky.
*Under Grant No. SES-8509234, the NationsiL i Science Foundation supported the work
embodied in this paper, earlier versions of which I presented at the University of Southern
(‘alifomia aird at the March 1987 convention of the Public Choice Society, held in Tution. The
first draft was read in part or in full by Victor Goldberg, Ronald Weiner,Martin Krieger, David
W&emg. &wry Weingas. and Oliver Williamson, all of whom made usefui siiggestioas. At a
l;ltcr atage. II reccimd mm cxcellen~ camnanents &WIRichard Day, Mancur Olson, and two
wT~.~*.p.I1U
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144 T Kwan, The tenacious past

The theories differ in numerous respects, altkougk I give particular

cmpkasis to three.
A major issue iuvolves the individual’s role in the temporal continuity of
collective decisions. In some theories he exhibits personal conseruutism, a
personal attachment to some aspect of the past. In others, he displays no
suck attachment, and the continuity of collective decisions stems from
collective conservutism,an attachment to the past on the part of society as a
whole. These classes of theories are not incompatible: each illuminates vital
aspects of the issue, and ultimately we will want to synthesize them.
Tke second salient difference hinges on the source of individuals’ prefer-
ences and of the beliefs that underlie these preferences. In most theories, botk
beliefs and preferences are presumed given. In a few, however, they are
endogenous to the system. Tke significance of treating them as endogenous is
that this enables one to account for cultural evolution and ideological change
- pkenomena on which economics has so far had remarkably little to say.
Tke third major difference among the theories is methodological: it
involves the extent to which they resort to optimistic functionalism, a mode
of explanation whereby outcomes are attributed to their beneficial conse-
quences.’ Some theories treat cases of conservatism as exceptions to the
rule that every continuity or discontinuity is the manifestation of a socially
efficient contract.2 Others, rejecting functionalism altogether, see coGscr-
vatism as a common and systematic source of social inefficiency.
One need not be a functionalist, of course, to recognize that a temporal
continuity does not have to stem from conservatism. Commons (1924/1957),
Hayek (1973-79), von Weizsiicker (1984) and Dworkin (1.986)- to name four
non-functionalist social thinkers writing from different perspectives - have all
pointed out that the effective functioning of society requires certain expec-
tations of its members to be protected. If the social order were totally fluid,
ir. the sense that any decision or agreemer,t could be changed for the
momentary cohveniencc of some person or group, people would live in great
uncertainty regarding the future and, consequently, their incentives to learn,
invent, save, and invest would be impaired. Many continuities kelp protect
critical expectations, and for this they are tolerated, if not actively sought.
As an illustration of the distinction between continuities that do and do
not reflect conservatism, consider the American law requiring a Presidential
election every four years. It serves to protect expectations concerning
government policy, so people value it even though it curtails their freedom to
oust a President who turns out to be incompetent. That a four-year election
cycle kas been retained over generations is not, tken, necessarily a sign of
conserv&ism. If every generation agreed that a four-year cycle were optimal,

IOnfunctionalism, see Elster (1983, GA. 2).

‘see Coast (es&l).
 ‘I:Kuran, The tenacious past 145

the absence of change would not be attributable to conservatism. But

suppose that a string of b.xd choices convinced some generation that a two-
year cycle would be better. In this situation, the retention of a four-year cycle
would be attributable to conservatism.
A central problem of human society is to strike a balance between
protecting expectations and ahowiug adaptation to new conditions, Civilixa-
tions have flourished when this balance was approached, and faltered when it
was permitted to disintegrate. So to comprehend why economic growth is
more rapid in some eras than others, or why, in a certain era, some nations
are vastly more developed than others, we must gain a sense of the balance
and of the conditions conducive to its attainment. This is a formidable
research agenda, of course, which cannot possibly be carried to fruition in
one article. I bring it up merely to put the study of conservatism into a
broad context. Understanding the sources and mechanics of conservatism is
a vital component of the wider agenda, because conservatism is among the
factors keeping the balance from being achieved.
The works on conservatism that I consider below are not components of a
unified, coherent research program. Fruits of more or less disjoint efforts,
they are not even linked by a common vocabulary. It is essential, therefore,
to begin by carefully outlining the issue at hand and defining the terminology
to be employed. These tasks are undertaken in section 2. In the main body of
the paper, sections 3 through 9, 1 critique in turn seven different lines of
analysis. The final section raises challenges for future research.
I should stress that my emphasis is on positive theories that are explicitly
grounded in individual behavior. I am not concerned with veiled acknow-
ledgments of conservatism, as found in works that feature distributed lags,
auto-correlation, or lump-sum adjustment costs. Nor am I concerned with
theories in which the determinants of individual behavior are left
unarticu1ated.j
Also beyond the scope of this paper is the issue of empirical testing.4 Of
necessity, then, my criticisms will have a speculative flavor. i say this without
apology, for the risks invoived are justified by the urgency of bringing the
cieavages in the literature to the attention of broad-thinking social scientists.

2. Issue andlconcepts
To set the issue in stark relief, consider two consecutive periods, 1 and 2,
during the second of which a certain choice process generates the outcome

3Some of these receive attentionin three related surveys: Staw, Sandelands, and Duttsn
(1981). Hannan and Freeman (1984). and Krieger (1987).
4Tests of varying sophistication and persuasivenesscan be found in the works covered.
146 T. Kuran, The tenaciouspast

pf = B. To say that the selection of B in period 2 entails conservatism is to

maintain that it reflects the decision maker’s attachment to some choice in
period 1. It is to claim, in the case where the decision maker is an individual,
that pf would have been different than B had pt, his own choice in period 1,
been C rather than B, or p**1 , another decision maker’s choice, been D rather
than A. By contrast, to say that the selection of B in period 2 does not entail
conservatism is to maintain that the decision maker would have chosen B
regardless of what choices had been made in period 1.
Three properties of this characterization are noteworthy. First, it makes
conservatism a matter of degree, since the strength of the decision maker’s
attachment to the past can vary? Second, it relies only on the preferences
and choices of the decision maker in question: the preferences of outsiders do
not enter the picture. Accordingly, to argue that Soviet society exhibits
conservatism in its agricultural policy is to claim simply that the Soviets
themselves would have a different agricultural policy today had the policy
they inherited from the past been different; the conservatism attributed to the
Soviets is independent of the preferences of non-Soviets. Third, the character-
ization accomodates intentional continuities. The retention of a four-year
Presidential election cycle does not entail conservatism, if, given the oppor-
tunity to alter the cycle, society would choose to keep it intact.
In terms of the notation introduced, a theory of conservatism is an
attempt to explain systematicaily why p$ might depend on choices in period
1. The influence of the past operates through diverse complex channels,
which is why there can exist many mutually compatible theories.
The notion of coilective conservatism differs from that of personal
conservatism by virtue of the decision maker’s identity. In the former case,
the decision maker is a collectivity choosing an election law, a tax policy, a
foreign trade regime, a technological standard, or a linguistic convention,
among other possibilities. In the latter, it is an individuai weighing which
candidate to support, whether to obey a law, what kind of computer to buy.
Several theories to be covered will provide reasons as to why a collectivity
may exhibit conservatism even if none of its members displays personal
conservatism - that is, even if none of its members is wedded in any way to
his own or the collectivity’s past choices. Others will explain why personal
conservatism is prevalent and likely to be a source of collective conservatism.
In everyday usage, the term conservatism is commonly associated with the
principle of laisser faire. Here, no such association is assumed. A conservative
society is one that effectively values conservation, and what it conserves
depends on the particularities of its organizational, institutional and techno-
logical inheritance. If the Soviet Union were to abandon its age-old

5For a formal presentation of the measure implicit in this statement, see Kuran (1987b, sect.
3).
 T Kurm, The eenaciws pase 147

restrictions on geographical mobility, and thereby move toward laisser faire,

the change would make it less conservative, not more.6

3. Trauaaction costs and obstacles to institutionaladaptation

In a very influential paper, Coase (1960) argues that if property rights are
well-defined and transaction costs - the costs of planning, making, adjusting
and enforcing social arrangements - are negligible, then arrangements will be
efficient. According to this argument, they can bc inefficient if transaction
costs are significant, even when property rights are perfectly defined.
A literature has grown in recent years which goes one step further than
Coase. Recognizing that in practice transaction costs are anything but
negligible, it proposes that social arrangements are geared toward the
minimization of these costs and that, in this sense, they are in fact efficient.
The challenge this literature poses for the student of an institution is to
determine the nature of the underlying transaction-cost mmimization
problem and to test empirically whether the institution is indeed efficient.
The proposition would seem to rule out conservatism: if it were strictly true,
observed continuities could always be explain?“, by showing either that
relevant conditions have not changed or that the social advantages of long-
term stability outweigh the short-term advantages of frequent adjustment.
In the hands of many practitioners, this approach has become a tauto-
logical exercise, which involves picking and choosing among notions of
transaction cost so as to make every observed institution efficient at all times
by definition. The leading writers, however, avoid the tautology. Observing
that in actuality appropriate adjustments often fail to occur, they identify
some obstacles to adaptation, diluting thereby the functionalism inherent in
the approach. The obstacles assume different forms in different branches of
the literature.
In the branch located in economic history and development economics,
which includes works by Davis and North (1971), North (1981), and Ruttan
and Hayami (1984), the principle of transaction-cost minimization is couched
in a demand-supply framework. The demand for institutional change is
driven by opportunities for lowering transaction costs which are opened up
bY cxogcnous!y determined technological discoveries or shifts in factor
endowments. Yet change does not necessarily materialize as soon as cries for
it arise: its supply, which is assumed to rest on actions of political
entrepreneurs, may be lagged. A crucial factor here involves the distribution

61mpiicit in this statement is my belief that the Soviet Union has been maintaining these
restrictions partly because of difficulties in bringing about collective change. While I realize that
readers may reasonably question the basis of the behef, I could not even begin to spell it out
here. At any rate, the statement is intended to clarify a concept, not to launch a debate on
Soviet politics.
148 E Kurm, The tenacious past

of political entrepreneurship. In an autocratic regime, where by definition

political entrepreneurship is concentrated in a single ruler, change is supplied
without delay as long as the ruler himself expects to gain from it. But in the
more common setting where political entrepreneurship is divided among
many parties, lags are possible even when as a group the entrepreneurs stand
to gain from change. If the private gain of the individual entrepreneur falls
sufliciently short of the social gain from change, he will want to withhold his
contribution - becoming, in the parlance of the theory of collective action, a
‘free-rider’. The free-rider problem makes the process of combining disjoint
political resources costly, more so the faster the pace of mobilization. The
upshot is that one type of transaction cost - the cost of mobilizing the
entrepreneurs - may impinge on efforts to lower another type of transaction
cost.’
Leading contributors to this segment of the transaction cost literature are
quick to admit that the supply side of the theory remains undeveloped.*
Accordingly, they have introduced two other factors into the picture: culture
and ideology? These factors, they argue, help overcome the free-rider
problem in some contexts, ,while exacerbating it in others, However, no
formal theory of culture or ideology is offered: the two factors come into the
theory in an ad hoc manner. In any case, neither culture nor ideology fits
naturally into a demand-supply framework. For one thing, each of these
factors also influences the demand for change. For another, neither culture
nor ideology develop independently of political outcomes. To an important
extent, as I have argued elsewhere, their evolution is guided by the policies
society implements and the laws it institutes.10 Insofar as people’s prefer-
ences are shaped by culture and ideology, this evolution may serve to
attenuate any existing demand for change.
A different type of explanation dots the industrial organization segment of
the transaction cost literature, in which key works are Williamson’s Markets
and Hierarchies (1975) and The Economic Znstitutions of CupitaCism(1985).
The setting here is a bilateral monopoly relationship, featuring, on the part
of ea6h party, bounded rationality and opportunism.u In such a relation-
ship, Williamson (1985, p. 63) argues, the parties

are strategically situated to bargain over the disposition of any incre-

mental gain whenever a proposal to adapt is made by the other
party.. . . Efficient adaptations that would otherwise be made thus result
‘The notion that obstacles to adaptation might allow inerricient institutions to survive does
not appear in all of North’s works. His work with Thomas, The Rise of the Western World
(1973). has a strongly functionalist bent.
*See, for instance, North (1981, p. 68) and I’tuttan and Hayami (1984, p. 213).
9See, in particular, North (1981, ch. 5) and Huttan and Hayami (1984, pp. 215-218).
toSee Kuran (1987b, esp. sects.4 and 5).
I1 Williamson defines opportunism as self-seekingwith guile.
 T Kluan, The tenacious past 149

in costly haggling or even go unmentioned, lest the gains be dissipated

by subgoal pursuit.

In the absence of opportunism, neither party would seek arr rlnduly lalge
share of the incremeetfl gain; and in the absence of bounds on ra-;ionality,
the parties would foresee all contingencies and settle in advance the division
of all possible gains. Together, however, these factors may result in unantici-
pated needs for adaptation, which are then blocked by parties who prefer the
status quo.
Among the examples Williamson cites are that managers often succeed in
blocking elimination of their positions; that organizations maintain projects
proven to be unprofitable; and that firms find it difficult to reverse decisions
to procure internally rather than externally.‘* These are all examples of
collective conservatism. In each, organizational decisions are constrained by
the status quo, in that different decisions would be made were the status quo
different. Personal conservatism plays no role. A person who blocks change
does so because he has a vested interest in the arrangement that happens to
constitute the status quo, not because he is attached to the status quo per se.
Williamson’s !ine of reasoning does not rely on a fictitious separation
between the demanders and suppliers of change. Realistically, it assumes that
any party to a contract may either demand change or try to block change. It
is grounded, moreover, in key features of human cognition and behavior.
Yet, the claim that eficient adaptations do not always materialize collides
with the dominant methodological assumption in his warks, which is that
social arrangements are effncient responses ts the problem of minimizing
transaction coits. In defense of the approach it might be suggested that in
practice adaptation failures are less common than adaptation successes, or
that failures are of second-order importance. In the current state of
knowledge, however, such suggestions could not be supported empirically.13
Williamson believes, nonetheless, that adaptation failures are leys common,
on the grounds that competitive selection pressures eliminate institutions that
have become inefficient. He acknowledges, however, that the selection process
is not well understood.14
What is eficient depends, of course, on the objectives of those involved,
and in his rewnt work Williamson (1985, p. 22) signals that these will depend
on such factors as customs, habits, and mores - in brief, culture and
ideology.15 In a few specihti contexts, moreover, he considers such factors

‘*SeeWilliamson (i975, p. 126; lci65, pp. 148-156).

‘J~illiamson (1985, p. 392) himself notes that the study of ‘bureaucratic failure’ has barely
be un.
F4Seehis 1985 book, pp. 22-23 and 404.
ISIn granting that these factors matter, he appears to be influenced by North”s (1981)
argument that ideology is important and by Granovetter’s (1985) charge that the transaction
cost framework unduly ne&xts the social context.
150 E Kuran, The tenacious past

Fig. 1

explicitly. On the object of bureaucracy, for instance, he endorses the

argument that organizations tend to become ends in themselves.16Generally,
however, he tnices the cultural and ideological milieu as given, suppressing
thereby feedback from society’s institutional decisions to its members’
dispositions and beliefs.
As this survey progresses, we shall see that most other theories of
conservatism suffer from the same limitation. The mechanics and impli-
cations of the feedback in question are just beginning to receive attention.

ing of co~~~~ve c
Given this paper’s emphasis, it may seem odd that there exists an immense
literature seeking to expla;n. the extreme instability of collective choitis. This
literature’s point of departure is a paradox first recognized in 1785 by the
Marquis de Condorcet. The paradox is that in a society of three or more
individuals, facing more than two policy options, it is possible that every
option will be opposed by a clear majority, even if each member has a stable
and consistent preference ordering. In reality choices do not cycle ceaselessly,
and recently some public choice (or collective choice) theorists have set out
to explain why.
A demonstration of the aradox is offered in fig. 1, which depicts three
individuals, tor each of whom a set of indifference contours is displayed in a
two-dimensional policy ce. The dotted lines linking the bl
) are the cant curves, which connect the ta
rence contours. Left to negotiate among themselves,
‘%x his 1985 book, p. 148.
 T t&ran, The tenacious past 151

Fig. 2

duals would end up rxlecting a policy on their contract curve. So suppose

that i and j have picked A. The figure indicates that in a majority vote, A
WC&d be defeated by B, which is preferred to A by both i and k. By the
same logic, though, B would be defeated by C, then C by A, and so on
indefinitely. We see that for this ‘majority voting game’, the core - the set of
undominated policies;- is empty. Arrow (1951/1963) has shown that cycling
arises not just with majority voting, but with any voting system that
responds to individual preferences in an impartial and consistent manner.
Building on Arrow’s work, other researchers have offered somewhat richer
demonstrations of the perversity of public choice mechanisms.1’
As Arrow himself has noted on at least two occasions (1974, pp. 28-29;
l985), these res&ts tly in the face of reality. In actual societies one does not
observe endless cycling: decisions are reached and then maintained over long
stretches of time. Reminded of this by Tullock (1981), public choice theorists
have begun to explore why the real world looks so diiferent. A common
thread AXISthrough the explanations offered: they all involve restrictions on
the domain of choice. I shall outline a few of these and then comment on the
general approach.
Recognizing that in the cycling literature there tend to be no restrictions,
Shepsle and ingast (1981) point out that in practice decision-making
bodies are s ect to rules, and that these rules induce stability. Their
simplest example, originally developed by Tullock (1967, ch. 3) himself,
involves a rule that prohibits policy proposals within a certain distance from
tbe status quo. The possible efkcts d such a rule cm be seen in fig. 2, where
A is the status quo. All policy proposals that could garner a majority against

17For8 ccrorciss:
review of the literature on cycling, see uelkr (1979, ch. 3).
152 ‘I: Kuran, The tenacious past

A are contained in the union of the two shaded areas. Suppose, then, that
there is a prohibition on policy changes smaller than A-D. Given fixed
preferences, this prohibition would make A invulnerable.
A variant of this example has been offered by Ni~ziI <1983),who observes
that decision-making bodies do not operate in continuous space, as is
generally assumed in the public choice literature. By the time they are ready
to vote, their choices tend to have narrowed to a small number of distinctly
different alternatives. When this happens, it is possible for an invulnerable
policy to be attained in just a few moves.
Among the other rules discussed by Shepsle and Weingast, one requires
the status quo to be voted on last. Anyone can propose a sequence of
motions, but in any proposal, the status quo must be the last move. To
understand the implications of this rule, let us suppose5 going back to fig, 2;
that A is the status quo. Only if the next to last move results in the selection
of a policy inside the shaded area can A be defeated in the terminal vote.
Thus, while the rule does not guarantee that A will be maintained, it does
accord it a measure of protection.
Insofar as they facilitate the maintenance of whatever policy happens to be
the status quo, each of these rules accounts for collective conservatism:
remove it, and change becomes possible, or more likely. Common obser-
vation indicates, moreover, that each has counterparts in actual committees,
legislatures, and organizations. But what makes a set of rules stable? The
very logic that suggests endless cycling of policies wound also suggest endless
cycling of rules. Shepsle and Weingast attempt to resolve this problem
through the claim that rules are selected according to a non-majoritarian
criterion. But they do not address the tangled question of why the decision
criterion for rules must differ from that for policies,
Contributors to this literature now recognize that the framework needs to
be enriched to account for the stability of rules. Accordingly, they have
turned their attention to the selection of stability-inducing rules.18 But the
problem will not disappear with a satisfactory explanation for the emergence
of these rules: the framework will then need to be enriched further to account
for the stability of the rules by which the stability-inducing public choice
rules are made. One plausible way out is to incorporate f&back from pohcy
decisions to preferences over policies, and from employed rules to preferences
over rules. Such feedback tends, I argue in my own work, to bias both the
political agenda and political outcomes in favor of the status quo. Another
way out is to relax the assumption that individuals are monads - indepen-
dent entities devoid of lasting ties. Political action generally requires the
formation of long-lived pressure groups, arid, as we shall see further on, there
are reasons why these may cause both policies and rules to harden.

‘8See. for instance, Wein t und Marshall (1986).

 Z Kwan, The tenacious past 153

Regarding this approach, two more comments are in order. First, it does
not rely on personal conservatism. Second, it is compatible with the notion
that collective decisions may be inefbsient.

5. Boundedrationality
Given that the question of how rules emerge is a weak link of the
literature just discussed, it is appropriate to turn now to a class of theories
that seek to explain the emergence of rules and other behavioral regularities.
These theories are built upon the observation that individuals are boundedly
rational - biologically limited, that is, in their ability to receive, store,
retrieve, and process information .I9 This observation, which negates the
standard neoclassical assumption that individuals have unlimited cognitive
powers, has two pertinent implications. One is that individuals find it costly
to build theoretical models of the world in which they operate; the other,
that in most contexts they find it costly to evaluate their policy options.
One theory of how bounded rationality generates conservatism lies in the
work of Day (1987). Day observes that an individual with incomplete
knowledge of the world and imperfect ability to evaluate his options is apt to
base his choice on choices already made. Thus, he might replicate one of his
past choices (in Day’s terminology, habere), adopt the choice of another
person (imitate), or abide by the choice of some authority (obey). Each of
these alternatives, or any combination thereof, amounts to personal
conservatism, since the individual’s present choice could be different if the
past choice or choices on which he relied were different.
Does the fact that an individual engages in personal conservatism imply
that his behavior is fixed? In this theory, the answer is negative, for three
reasons. The theory harbors, first of all, a feedback mechanism from
outcomes to choices, which in certain situations makes the individual shed
his conservatism. In particular, he chooses to experiment if he senses that a
certain choice has either worsened or improved his well-being appreciably.
The theory recognizes, secondly, that the individual is bound to encounter
novel situations where no prior choice appears immediately relevant. The
theory observes, thirdly, that the individual’s cognitive frailties might prevent
him from replicating a particular choice. Just consider, in this connection,
how difficuit most of us would find it to replicate George Santayana’s writing
style. Or, how carefully crafted constitutions a.re subject to widely different
interpretations. I shall return to the third point at the end of the paper.
Suffice it to say here that it serves to integrate the observation that
individuals are conservative with the observation that their behaviors
routinely change over time.

i%e Mtrch and Simon (1958, ch. 6) and Simon (1972).

154 1: Kurm, The terwcious past

A related, yet distinct, theory of how bounded rationality gives rise bo

conservatism lies in a set of papers by Heiner (1983, 1986, 1988).20Heiner’s
boundedly rational individual is forced to follow behavioral rules, which he
attempts to modify only when he perceives, with sullicient certainty, that the
environment has changed. The more complex the environment, the less
adequate his model of it; and so, the weaker his faith in information
suggesting that he ought to change his behavior, and the less sensitive his
behavior to actual environmental shocks.
For an illustration, suppose that in a certain decision arena an individual’s
search process yields three alternatives: A, B and C. According to his
imperfect model, the first of these ranks highest in terms of expected utility.
Later, some disturbances take place, but these are not great enough to make
the individual reformulate his model, resume searching, and produce a new
ranking of alternatives. Once again, he opts for A.
Since the decision process in question concerns just one individual, the
retention of A entails personal conservatism. The explanation is simple. If the
individual had unbounded cognitive capabilities, he would conduct a new
search in response to the shock. Insofar as search entails randomness, this
could yield a different ranking of alternatives, possibly according to a
modified model. The new ranking could be topped by an alternative other
than A.
Heiner’s theory has a positive dimension and a normative dimension: it
aims to explain observed behavioral regularities and to prescribe a criterion
for responding to environmental changes. In its latter use, it applies to any
decision maker - a collectivity or an individual. As an explanatory tool, on
the other hand, it does not generalize easily to a coliectivity. Since it is
possible for members of the collectivity to develop different models of the
world, to receive different information, to adopt different definitions of failure
and success, and to hold different perceptions of the status quo, their
responses to an environmental shock could vary widely. To explain ade-
quately why the collectivity does or does not respond to the shock, it is
necessary, therefore, to specify how the inevitable conflicts are resolved. It is
equally necessary to account for interdependencies among individuals* search
processes. In actuality, people do not search in isolation from one another.
As Bay observes, they imitate each other, making use of each other’s
cognitive resources. For the same reason, they (draw on each other’s beliefs,
and they are susceptible to information foisted upon them by groups trying
to gain support for a particular alternative.
Heiner uses the theory, however, to explain not just ~WXWW~ habits,
routines, ai.d rules of thumb, but also collectioe temporal regularities such as

*OFnr the Sdi set, see the latter citation. Heitier’s argument rests on an extensive literature,
which includes works by Simon (1955, 1979) and Nelson and Winter (1982, part 2).
 ‘KKuran, The tenacious past 155

administrative procedures, traditions, customs, and scientific paraclignrs.21

He claims, in effect, that the theory explains collective conservatism as well.
SO it might, in the event that members of a collectivity unanimously refrain
from adapting to a new piece of information. But unanimity of behavior is
exceptional, and when it occurs it requires explanation. Collectivities usually
feature diversity in orientation: in organizations administrative proaxhres
have their critics; in fraternities some brothers reject the merits of a tradition;
most social customs generate some resentment; every scientific paradigm has
its sceptics; and so forth. It is by no means self-evident how in such instances
the collectivity’s decisions acquire continuity.
Regarding paradigms, Heiner contends that his theory explains the
systematic resistance of individual scientists to new ideas and that this
resistance accounts for the stability of the paradigms to which these scientists
subscribe.22The first part of the argument is easy to accept, but the second
part is troublesome. A paradigm, as Thomas Kuhn (1942) emphasizes
repeatedly, entails communalagreement on the part of a group of scientists as
to methodologicai principles and basic explanations.23 To illuminate the
persistence of a paradigm, one needs, therefore, to explain the so&i
processes by which a group of thinkers reach and maintain agreement.
One might expect a theory that rests on bounded rationality to be
incompatible with functionalism. Indeed, in large segments of his writings,
Heiner explicitly recognizes the possibility of inefficiency. Thus, in discussing
the law, he notes that legal precedents may become ill-suited to evolving
circumstances.24 Yet, he does not reject functionalist reasoning as consis-
tently and decisively as other leading bounded-rationality theorists. In this
regard, he gives the impression that property rights represent efficient
adaptations to problems caused by growth in society’s information base -
the argument keing that each new right permits members of society to
operate with a smaller fraction of this base.25Although property rights can
solve problems generated by a ballooning information base, the efficiency
claim is difficult to accept in the absence of a convincing argument as to how
selection processes weed out societies that institute inefficient rights. There is
much evidence, actually, that these selection processes operate very slowly,
over many generations. Witness the durability of monstrously ineffIcient
rights in the Third World and the Communist Bloc.
Iti any case, inability to handle more than a small fraction of the
information available is only one of the cognitive factors that makes
2lFor explicit statements to this e&t, see Heiner (1983, p. 567; 1986, p. 236). The earlier
pa t contains a wide array of examples;see, in particular, subsects.4B, 4G and 4H.
g§ee his 1983 paper pp 575-576
230n tie social basis oi thought, also see Douglas (1986).
*%ke his 1986 paper, eqpecially sect. 8. For other explicit rejections of fUnCtiOnid~Sm. SW PP.
569-579 in his 1983 paper and n. 2 in his 1988 paper.
25Secpp. 580-582 in ht 1983 paper.
156 E Kwan, The tenacious past

individuals personally conservative. Cognitive psychology has uncovered

scores of systematic biases in the way we use and interpret information. These
biases, all important sources of personal conservatism, stem from heuristics
we employ, such as the representativeness, anchoring, and availability
heuristics discussed by Tversky and Kahneman (1974).26Unfor?::tlately, the
question of how these heuristics contribute to collective conservatism has not
yet received much attention.”

6. Relative deprivation
Another theory of personal conservatism is based on the observation, long
accepted by sociologists but dismissed by most economists, that a person’s
wellbeing depends both on his absolute consumption and on his consump-
tion relative to others. A leading economist who at an early date concurred
with the observation is Duesenberry (1949, pp. 76-89), who used it to explain
why the poor have a higher marginal propensity to consume than the rich.
More recently, Easterlin (1980) has relied on it to explain why couples
belonging to relatively large generations tend to have relatively few children:
feeling less well-off than their parents, such couples are less willing to bear
the cost of raising children. And Frank (1985, chs. 2-5) has argued that the
reason why, in certain firms, employee salaries rise less than proportion-
ately to their marginal products is that high-ranked employees receive part of
their compensation in terms of status.28
From the standpoint of this paper, the most pertinent branch of the
relative deprivation literature is that which seeks to explain why the pace of
institutional change varies greatly over time. Several relative deprivation
theories of institutional change have been developed outside of economics, by
Davies (1962), Gurr (1970), and others. Another variant has been formulated
lately by an economist, Brenner (1983, 1985). I focus on this variant, both
because it is grounded explicitly in individual choice and because it is the
most ambitious in scope.
Brenner provides a model of expected-utility maximization under uncer-
tainty, according to which people are more likely to seek change when they
are losing ground than when they are not. In it, an individual’s utility
function has two arguments: his own absolute wealth and the share of

261n the reylresentativenessheuristic, the similarity of events is taken as a measure of their

interdependence. In anchoring, estimatcz are formed by revisrog a~. Inlti~l value. In availability,
tinally, the probability of an event is based on the eae with which its occurrence can be
imagined. On these heuristics and the cognitive biases they generate, also see Kahneman, Slavic,
and Tversky (1982), Nisbett and Ross I:1980), and Thaler ( 1380).
271 might point out, however, that the availabilitv heuristic Plays a role in my own theory of
collective conservatism,8ummarized in section 9 b&w. _
ZBFrank’s book con!&nn a nllmber of other iaeightfui applications as well as many additional
referencesto works that rely on relative deprinarion.
 lC khan, The tenucims past 157

society with greater wealth. The fttnction’s form is unrestricted, but the
wealth distribution is required to ‘be pyramidal. Given this, it takes a few
simple steps to establish the following: an individual who was a guardian of
the status quo when his position in the wealth distribution was fixed will
support social experimentation if suddenly his position deteriorates
substantially.
The argument holds even if the individual’s utility function is linear in
each of its arguments* and Brenner ascribes much importance to this result.
In this connection, he dismisses attempts to explain personal conservatism
through risk aversion, on the grounds that a theory based on the unobserv-
able shape of a utility function is useless.% His own theory, meanwhile, rests
crucially on the form of the wealth distribution, and this limits its range of
application. Everyday observation suggests that people do not shed their
reluctance to support change when they enter collectivities composed of
similarly wealthy individuals, such as a faculty senate or a village council of
elders. Part of the explanation lies no doubt in the cognitive factors
highlighted by the theories discussed in the previous section.
In Brenner’s model personal conservatism manifests itself through the
individual’s perception of how his position in the wealth distribution is
changing. The notion of wealth encompasses not just material possessions,
but also elements, like morale and fnterpersonal trust, for which widely
accepted measures are lacking. Yet, by assumption, everyone bases his
comparisons on the same unidimensional measure, which conceals how very
complex the notion of relative standing is in actuality. Just as the vast
majority of drivers believe that they have better than average driving skills,
because there is no set way to measvlre these skills, so too can everyone
believe that his relative standing is improving or that it is deteriorating.
F=mp!es abound of groups that considered themselves to be maintaining
I”_.
their relative position while outsiders agreed that they were losing ground
decisively.J0 Thus, a missing link in this theory is the process by which
beliefs concerning relative standings are formed.
In contrast to the bounded rationality theories, this one passes over
cognitive factors. Interestingly, though, the stylized fact it is designed to
explain - namely, that people are conservative except when their relative
standing is falling - has received considerable attention from cognitive
psychologists, who have found that we take more personal responsibility for
our successes than for our failures. They are divided, however, as to the
explanation. Some see the asymmetry as the manifestation of a motivational
bias rooted in a desire to enhance one’s self-esteem or reputation? Others

29See,in particular, pp. 1-6 and 45-61 in his 1983 book.

30For two examples,see Kuran (1986).
?’ See Bradley (1978) and “schlenker(1980).
158 1: Kwun, The tenacious pat

trace it directly to a cognitive bias, according to which success is perceived to

flow from one’s efforts, but failure from external factors?
On the basis of his model of individual behavior, Brenner offers a major
proposition pertaining to society as a whole. It is that the probability of
observing the modification or abandonment of a policy, rule, law, custom, or
tradition rises with the share of society whose standing has worsened. This is
not implausible, but it leaves unexplored the process by which the dis-
enchanted masses come to agree on an alternative and that by which the
opposition overcomes the resistance of those who benefit feom the status
quo. It is easy, of course, to find examples where mass discontent has bred
change-oriented collective action: many cases have been cited by various
relative deprivation theorists. But the general proposition has not fared well
under critical empirical scrutiny. In a study of collective violence in France
between 1830 and 1960, for example, Snyder and Tilly (1972) found that
relative deprivation, measured by decreases in industrial activity and
increases in the price of food, was unrelated to the incident: of industrial
violence.
The explanation for such empirical findings is not that relative deprivation
is irrelevant to institutional change< It is, rather, that institutional change
requires collective action, which, as will become clear in sections 8 and 9
below, is not generated automatically even by mass discontent. To assert
otherwise is to overlook the interdependence of people’s political choices and
fall victim to the fallacy of composition. Revealingly, the iink between
discontent and change is well established only in contexts - such as those
explored by Duesenberry, Easterlin, and Frank - where change does not
require collcctivti action OPwhere the collectivities to be mobilized are tiny
groups like couples.
But let us return to Brenner’s theory. Extending his argument, he further
maintaitis that society will eventually rationalize whatever policy or institu-
tion it chooses. He thereby implies that in the absence of further shocks to
relative standings, the degree of collective conservatism diminishes, in the
sense that the retention of the status quo comes to depend less and less on
people’s unwillingness to act in accordance with their wants, and cr;rmpond-
ingly, more and more on their beliefs in the eficacy of the status quo. This
implication is not unreasonable: it is supported by much empirical evidence,
including some offered by Brenner himself. As far as I can ascertain,
however, his work does not contain a systematic explanation for the
rationalization he detects.
One last comment regarding this argument. Brenner rrakes it the corner-
stone of a grEnd theory of history, which has a functionalist thrust. He uses
it to make the case that a variety of major institutions, like permissive

32see
Roes(1977).
 7I Kuran, Thetenacious past 159

inheritance laws and the ba3 on interest, arose and endured because they
were efficient solutions to social problems involving the distribution of
wealth. But the efficiency claim is backed up neither by satisfactory empirical
evidence nor by adequate theoretical reasoning.

7. Rights to tiie status q~o

Earlier we encountered En attempt to explain property rights through
bounded rationality. I turn now to a theory designed explicitly to explain a
particularly relevant class of rights, namely rights to the status quo. By
definition, such rights enable their holders to block change. The theory’s
proponents maintain that society routinely accords them to its members.
The theory has numerous points of contact with theories considered
previously. Like several of them, it recognizes that people have cognitive
limitations and, hence, that they find it costly to make adjustments. Along
with the transaction cost theory, it observes that individuals benefit from
engaging in long-term relationships. Here, though, obstacles to altering these
play a more prominent role. Finally, it shares with Brenner’s relative
deprivation theory the vieiwthat people’s well-beings are interdependent. But
in this context the interdependence stems not from rank consciousness, but
from adjustment costs.
This theory has been developed most fully by Owen and Braeutigam
(I978). But the basic idea is already present in some earlier writings of
Goldberg (1974, 1976) on the stability of supply contracts.33 Goldberg
observes that such contracts, even those that consist of informal understand-
ings between private parties, tend to give suppliers a ‘right to serve- and
consumers a ‘right to be served’. In order to minimize the costs of unplanned
adjustment, he finds, the parties agree at the outset to refrain from abruptly
terminating the relationship. As a rule, moreover, they remain faithful to this
agreement even wheu evolving conditions make violation profitable. They
take each other’s interests into account - displaying, in effect, a respect for
others’ rights. From these observations, Goldberg draws an inference regard-
ing the rules and procedures that economists routinely condemn for delaying
adjustments to market conditions in regulated industries. Many of these, he
says, should be seen as proxies for the barriers to change that concerned
parties would in any case have agreed upon had the industries been left
unregulated.”
Goldberg refrains from claiming that wery observed barrier to change is

3?Goldberg’s writings have also had a strong infbnce on the industrial organization segment
of the transaction cost literature, discussedin section 3 above.
j*This argument constitutes a narrowly focused variant of the thesis, outlined in the
introduction, that the effective functioning of society requires ccrtuiin expectations of its members
to be protected.
160 T. Kwan, The tenaciouspast

necessarily efficient. He explicitly states that certain barriers to change could

& in&cient in both the ex ante sense and the ex post.35At the same time;
he avoids drawing the conclusion that society would be better off in the
absence of rights to the status quo. Although, he points out, these rights
sometimes stand in the way of ellicient change, they also yield benefits by
enabling people to supply their services more cheaply. He does not take up
the task of explaining how a distinction might be made between efficient and
inefficient rights.
In what sense does this theory explain collective conservatism? It does so
in that a long-term contract negotiated at time t remains in force at c + 1
even when new conditions are such that a contract negotiated at t + 1 would
be different. At any given time, an agreement in place might bear the
incluence of the past.
The theory of Owen aud Braeutigam (1978) is a variant of Goldberg’s
+Imn...*
L.XV”., . 36 ‘y;.ke r.,&JkPm
CCW’I”‘~ Qw~m snll I\r~~l?tig~rn recogn& that wople
acquire rights to the status quo. But unlike him, they claim that these rights
are honored also by third parties - by those, that is, not directly affected. A
telling signal of this, they maintain, is that people subscribe to a fairness
ethic, according to which delays in economic, political, contractual, institu-
tional, and technological cha;lge are seen as a requirement of fairness.
The theory does not seek to explain why people come to desire change.
Taking the evolution of preferences to be exogenous, it tries to explain why
society tends to slow down adaptations to these preferences. Among its
crucial elements is the assumption that when change is too fast, losers from
this change lose more than the gainers gain .J7This asymmetry implies that
society can benefit from an ethic, which, through pressure generated at the
polls, makes the courts and the government delay desired adjustments. Like
unemployment insurance, the ethic would protect members of society from
the blows of market forces.
Individuals who subscribe to such an ethic are averse to all policy changes,
not just to changes by which they themselves expect to be hurt. They
recognize that every change hurts SMWNZ~,and they want to avoid this.
Thus, the termination of a service, or the lowering of a trade barrier,or the
removal of a subsidy is viewed, even by those who stand to benefit, as unjust
to those accustomed to the subsidy. A natural question to ask is why, if the
gainers feel compassion toward the losers, they do not simply make
monetary sidepayments. The answer of Owen and Braeutigam is that
monetary transfers are considered distinctly distasteful as compared with
equivalent compensations in the form of delay?*
pp. 431-432
35!3ce in his 1976 article.
“Their theory is developed on pp. 18-36. Subsequent pagescover applications.
3’Owen and Baaeutigamcharacterize this asymmetry as risk aversion.
%ee p. 30.
 T Kuran, The eenaciouspast 161

This answer raises the question of why monetary transfers are seen as
distasteful. More fundamental, though, is the issue of how an ethic of fairness
enters people’s consciousness. Significantly, Owen and Braeutigam observe
that before the New Deal was launched in the 193Os,Americans were not
nearly as fair-minded as they appear today.s9 But they do not attempt to
explain why an attitudinal change has taken place. At any rate, the issue is
complex. Both before and after the New Deal, there have been both
successful and unsuccessful attempts to block change by generating sympathy
through loud complaints. ‘l%e real issue, it appears, is not that an ethic of
fairness exists at some times and not others. It is that the ethic comes into
play in only certain contexts and at various levels of intensity. The challenge
is to discover the conditions under which the injury of one group activates
the political passions of others.
Pn spite of its limitations, this theory makes an important contribution, if
only because it accords a central role to people’s beliefs and preferences
concerning the social order. It needs to be extended, however, to incorporate
the process by which these preferences and beliefs evolve. Later, in the
context of another theory, I shall offer some thoughts as to how this might
be done.

& Collectiveaction
I turn now to a theory that lies in Olson’s The Rise and Decline of Nations
(1982). Grounded in individual behavior, it rests on the observation that
social policies and institutions constitute collective goods - goods whose
benefits cannot be limited to those providing them. A tariff on imported
textiles, for example, benefits all domestic textile manufa&urers, not just
those that lobbied for it. An implication, developed earlier by Olson himself
in The Logic of Cullectiz~eAction(1965), is that a group of individuals with a
shared goal may nonetheless fail to achieve the cooperation necessary to
achieve this goal. In a large group, members perceive that their personal
contributions to the achievement of the goal would be negligible; so in self-
interest they refrain from contributing, aad the group fails to reach its goal.
We observe, of course, that various groups, including some with millions
of members, achieve collective action. When we do, according to The Logic,
it is because these groups have recourse to selective incentives: they are able
to reward those who participate aad punish those who do not. Devising and
implementing effective selective incentives takes time, EXFGXXja:! C?f-
required time varies greatly among groups. Ho?3:ng all else constant, it tends
to be longer, for instance, the larger the group. Recause of such variations,

39This argument hati been developed in greater Cetrril by I-I&s (1987).

162 7I Kumn, The tenaciouspast

only a portion of the potential groups are organixed at any given point in
history. These are successful in pursuing their goals; the rest are not.
The argument leads to the conclusion, supported by considerable empirical
evidence, that people differ greatly in the influence they exert on the social
order. It suggests, in particular, that individuals who belong to organized
groups have a greater say than those who stand alone. This conclusion is
obviously consistent with a broad range of ‘capture* theories, including the
popular Marxian version in which a well-organized grande bourgeoisie
oppresses the unorganixed masses.40 It should also be obvious that Olson’s
theory has far more explanatory power: unlike capture theories, it illuminates
the determinants of organization and political power.
If one element in Olson’s theory is that it takes a long time to organize,
another is that once organized, a group is unlikely to unravel. Yet another 1s
that it is difficult to alter a group’s goals: this would call for collective action
within the group, which, by the same logic, requires time and other
resources. Another asymmetry exists, therefore, between the orgc+ed and
unorganized segments of society, which involves the dynamics of their
preferences. Whereas the preferences of organized groups are resistant to
change, those of unorganized individuals are not. As circumstances change,
the latter could become increasingly opposed to society’s policies and
institutions, only to find their desires biocked. Based on this reasoning,
Olson argues that in stable societies established groups block efflciency-
enhancing changes that run counter to their interests, and that, as a result,
economic growth slows down. He further argues that the trend is not
reversed until some revolution or war shatters the existing network of
organizations.
This theory thus ascribes collective conservatism to the stability of society’s
organizational structure. In a society that has enjoyed an extended period of
tranquility, organizations will be in p_..,
IQ.-*that would not have existed had
the organizational process just begun anew. Equally important, these organ-
izations will be supporting policies and institutions that owe thc.ir $antinuing
existence to history. It should be obvious that, in contrast to several of the
theories covered earlier, this one does not resort to functionalism.
Like every theory that has ever been developed, this one, too, leaves a
number of questions unanswered. Some of these have been noted by Olson
himself.
One limitation of the theory is that it treats the set of public goods as
fixed - at least in any given period. The political battle takes place over
which elements of this fixed set will be suppiied. In reality, the political
process also determines the set itself. In the United States, the issue of
whether people eat pork is currently considered to lie in the private domain.

%ec: Wallerstein (1984, esp. pp.22, 33, 79, and 170).

 T Kuran, The tenaciouspast 163

Most Americans simply do not care whether others indulge in the com-
modity, which is to say that the prevention of pork consumption is not on
the public agenda. In Saudi Arabia, by contrast, the issue is widely
considered to lie in the public domain, and individuals are expected to take
part in efforts to prevent pork consumption. For another example, consider
the ongoing struggle over abortion: whereas some regard it as a strictly
private matter, others see it as a crime that requires eradication through
collective action. In actuality, I am suggesting, two types of battles are fought
simultaneously: a strugg!e between riva! camps to win people’s minds and
struggles within each camp to achieve collective action. Olson’s theory
focuses on the latter type of struggle.
‘The claim that groups use selective incentives to solve the problem of
collective action is indisputable. It is also true, however, -that in practice
selective incentives do not eliminate the problem, beca.use those opposed to
their imposition may withdraw from the group ahogether. Indeed, as
Hirschman (1970) points out, a group’s failure to achieve the cooperation
necessary to implement change is sometimes attributable to the withdrawal
of its most influential members. Thus, the attainment of collective action
depends not just on the imposition of selective incentives, but also on the
opportunities for withdrawal. A related problem is that of chowsing appro-
priate selective incentives from among the scores available.
Wars and revolutions, which in the theory account for the eventual
destruction of sclerotic organizations, are not linked to the process whereby
collective conservatism generates deepening ineifficiencies.As Olson acknow-
ledges, there is one historfzal causality for periods between such interventions
and another for the interventions themselves. But the very logic that Olson
develops would suggest that even without a ‘big bang’ policies might be
challenged and altered. Given sufficient time, Lhe external and internal
opponents of the status quo would get organized and gain a voice in shaping
their destiny. Still, there is merit in Olson’s position. While the opposition is
struggling to organize, its pool of potential members could shrink, as
people’s preferences shift in favor of the status quo. Olson does not develop
this argument, although it would strengthen his thesis appreciably. As we
shall see presently, there are reasons to take the argument seriously.

9* Critical mass
In none of the theories covered so far do individual choicea depend
directly and explicitly on one another. Recognizing this possibility opens up
a new dimension, which has been explored by Akerlof (1976, 1980).
Granovetter (1978), Schelling (i978), Jones (1984), Arthur (1985), David
(1985, 1987), Witt (1986) and myself (1987a, 1987b). What makes people’s
choices interdependent.9 Various factors are invoked, among them the
164 1: Kuran, The tenaciouspast

indivifloial’sfear of isolation, group pressure, and network externalities. In

e:Ak & the individual’s payoff from a given option tends to depend
positively on the number choosing the option. Under a wide range of
plausible coI?difiolls, an option’s popularity thus feeds on itself, as each
person choosing it impels others to join the fold.
A critical mass model does not require members of society to have
identical payoff functions. Payoffs typically have an individual-specific com-
ponent, which means that for at least some expected choice distributions,
actual choices may differ. At the same time, if sufficiently many people are
expected to choose a certain option, this option is chosen by 2 large
majority, possibly unanimously. In contrast to the unique-equilibrium-
featuring typical economic model, a critical mass model yields multiple
equilibria under a variety of realistic specifications. Which equilibrium is
attained depends on people’s expectations of the choice distribution.
As an illustration, mnsider a group faced with the decision of whether to
riot against the governn!ent. Each member of the group will riot only if the
expected number of rioters is above his personal threshold. In the typical
scenario, if sufE&ntly many people are expected to riot, enough do so io
start a bandwagon process through which the number of rioters grows by
leaps and bounds. On the other hand, if few are expected to riot, even fewer
choose to join in, and, through a reverse bandwagon process, the nascent
riot peters out. In sum, a major riot breaks out only if there is expected to be
a ‘critical mass’ of rioters. Groups favoring one equilibrium over the other do
well in such a setting to exaggerate their support: if believed by enough
decision makers, even totally false information becomes a self-fulfilling
prophecy.
In a critical mass model collective conservatism operates through the
past’s influence on people’s expectations. Change the past sufficiently, and
people’s expectations will be different enough to alter the equilibrium. A
group may exhibit collective conservatism even if personal conservatism is
entirely absent.
In most existing critical mass models individuals’ payoff functions are
invariant to the distribution of actual choices. To appreciate what this
means, suppose that an established equilibrium is inefficient, in the sense that
an alternative equilibrium would make at least one person better off without
making anyone worse off. Under the invariance assumption, and in the
absence of an outside shock, the level of inefficiency must remain ;he same
over time.
The invariance assumption is not essential, however, to the framework.
The payoff functions could be made endogenous by specifying a feedback
mechanism through which the choice distribution affects them. Depending on
the nature of the feedback, the stabi1it.vof the status quo would either be
weakened or reinforced. For an illustration of the former case9 imagine that
 T Koran, The tenacious
jnzst 165

the payoff functions in a certain society are linked to a performance measure

based on some comparison with outsiders. When the comparison looks
unfavorable, this feedback will intensify pressures for reform and, possibly,
help shatter the established equilibrium. What I have just de&bed is
anything but a trivial twist: it promises to integrate the explanation of why
inferior choices often persist for ?ong periods with that of why societies
sometimes undergo sudden shifts.
Feedback mechanisms weakening the status quo may coexist, of course,
with those strengtheningit. Simple mechanisms of the latter type appear in
some of the most recent critical mass models, including Jones (1984, ch. 5),
David (1987, sect. S), and Kuran (1987b, sect. 4).
In Jones’ model, which is concerned with effort standards in the work-
place, a standard emerges from conformity pressures generated by the
workers themselves. At first, many a worker considers the standard oppres-
sive. Eventually, however, he intemalixes it - so thoroughly, in fact, that
when he moves to another firm, he carries the standard with him. For an
explanation as to why internalization occurs, Jones refers the reader to
several competing psychological theories, among them Festinger’s (1857)
theory of cognitive dissonance.
David’s model is concerned with technological standards in industries
featuring network externalities - those, in particular, where the payoffs from
using a given technology depend positively on how many are using it. The
basic result, which rests on the assumption that payoff functions are fixed, is
that if the number of users of a technology rises above a certain threshok& it
will eliminate all its rivals and become the industry standard. This result is
then reinforced by tying payoff functions to expectations of which technology
will become dominant. As a technology gains users, expectations of its
becoming the industry standard rise. Payotr functions thus shift in its favor,
and the convergence process speeds up.
The feedback mechanism in my own work hinges on belief interdepen-
dence. To discuss it, I must first outline the basic features of the larger
modelP* Regarding any given collective issue, the model attributes to each
member of society a pair of preferences: a private preference, which is what
he would declare in a secret ballot, and a pddic preference, which is what he
actually conveys to others. The two preferences may differ because pressure
groups with fixed political agendas reward those who support them pubMy.
In the interest of gaining the rewards of one group or another, the individual
may publicly support a policy, which, if &XI the chance tn express himself
through a private ballot, he would oppose. Another feature of the model is
that individuals incur disutility from prefcrencc falsiflcatinn, Under many

**For a full account of the basic model, see l?S?a. The feedback mechanism is discussed in
1987b.
166 iI &ran, The tenacious past

reward structures this means that if they differ in their private preferences,
their public preferences will differ as well.
mat makes this a critical mass model is that the reward achieved by the
supporter of a group increases with the share of society supporting this
group. Expectations of the distribution of support are generally crucial to the
outcome. Some sets of initial expectations cause a group’s share of support
to grow; others cause it to shrink. An equilibrium can exist where a policy
that most members of society would reject in a secret vote enjoys unanimous
approval.42 Collective conservatism arises for the reason discuss4 earlier in
relation to critical mass models in general. Here, however, its degree need not
remain fixed, even in the absence of exogenous shocks affecting the set of
equilibria. It may change because of a feedback mechanism whereby people’s
privaie preferences zre influenced over the long run by the distribution of
public preferences.
The rationale for this mechanism rests on two observations. The first is
that to make their preference declarations convincing people back these up
with sub&at&e arguments. If this observation is correct, the arguments
heard on a given issue will mirror the prevalent distribution of public
preferences. The second observation is that because of their cognitive
limitations, people are able to reflect on very few of the choices confronting
them. Out of biological necessity, they passively accept the status quo in
most contexts, unaware that had they been able to explore the matters
in_;olved, their preparations might have been very Merent.
To appreciate the significance of these observations, suppose now that an
equilibrium is in place, which entails unanimous support for a certain policy.
Also suppose that many of those who support this policy would support very
different policies in a secret ballot. Suppose finally that in each period a
portion of them dies, to be replaced by a young cohort. Hearing nothing but
praise for the status quo, the young entrants to the system accept it
passively, causing the distribution of private preferences to shift in its favor.
Elsewhere I have shown how this process causes the degree of collective
conservatism to diminish.
F!3r all the insights they provide, the three feedback mechanisms discussed
all omit vital elements of the actual process. They abstract, for instance, from
deliberate efforts, on the part of those who favor one equilibrium over
another, to influence people’s expectations, beliefs, and preferences. In reality,
such efforts are common, and their effectiveness depends considerably on the

42The question immediately arises as to why those falsifying their preferences do not demand
a secret vote. Qne reason is that in doing so they would reveal their private preferences and, as
a result, risk losing their rewards from preferencefalsification. Thus, the very phenomenon that
causes the selection of a policy few people want can also contribute to the persistence of the
underlying selection mechanism.
 1: Kuran, The tenaciouspast 167

attain& equilibrium. Witness how farm subsidies enhance the farm lobby’s
ability to convince people that these subsidies are in the public interest.
Existing critical mass models also leave out some crucial pecuniary
determinants of preferences, such as those featured in the transaction cost
and relative deprivation literatures. A fuller theory of social evolution could
be obtained by integrating the critical mass argument with an argument as
to how people’s political preferences are influenced by their economic
opportunities and frustrations. It goes without saying that this complemen-
tary argument should pay close attention to how people think, so as to avoid
the perils of functionalism.
With regard to models that feature competing pressure groups or tech-
nologies, a further limitation is that the number of competitors and their
positions are taken to be fixed. In actuality, there is the possibility of entry,
and competitors treat position as a strategic instrument. Although serious
obstacles exist to changing one’s position, it is an extreme simplification in
many contexts to preclude this altogether.

10. The mad ahead

John Stuart Mill reminds us that on all great subjects there will always
remain much to be said. Conservatism being a subject of fundamental
importance to the understanding of human civilization, it should not be
surprising that, individually and collectively, the theories lovered leave major
issues unresolved. Note, too, that conservatism Las :-:;t been a popular
subject for systematic theoretical inquiry. The argu:*:ents discussed are
pioneering attempts at making sense of a neglected phenomenon.
To the foregoing critical survey of these attempts, I would now like to add
some thoughts on the road that lies ahead.
As may have become clear in the course of the exposition, I believe that a
complete model for the study of conservatism would have a circular dynamic
structure, with individuals’ choices driven by ii&r beliefs and preferences;
society’s choices generated by its members’ choices; and, completing the
circle, these members’ beliefs and preferences influenced by society’s choices.
It wottld thus incorporate three interactive processes: that by which indi-
viduals’ seek and integrate information to form their beliefs and preferences
regarding the alternatives they face; that by which society combines these
choices to select policies, institutions, and technologies; and finally, that by
which collective outcomes mold individuals’ beliefs and preferences. I am
suggesting that the aim of theoretical analysis on the subject should be to
elucidate these three processes with an eye toward deriving propositions as
to when, how, and to what extent individuals and collectivities adapt to
changes in environmental factors. This ana!ysis should not treat lack of
168 T Kuran, The tenacious past

adaptation as au anomaly or aberration, as is the case in existing fuection-

alist theories. Rather, it should give this S~S~XE:.L+ic attention in its own right.
The theoretical agenda I am proposing must be coupled with empirical
studies that do not pre-judge the issue by defining every observed adap-
tation, partial adaptation, and non-adaptation to be functional. They must
he opt.tn to the possibility that not all adaptations capable of beneliting
collectivities have actually occurred; that many potentially beneticial reforms
and revolutions have not inaterialized, that, to paraphrase Milton and Rose
Friedman (1984), societies have found themselves tyrannized by the status
quo. The task requires the development of techniques for measuring personal
and collective conservatism.
I have maintained throughout that progress on the question of conser-
vatism will depend to an important degree on the attention we pay to how
peop!e think. The task promises to be arduous, for the mind is an
enormously complex system. Cognitive science is still struggling to identify
the basic processes, and various theories are in competition. Nor is this the
only major problem. The process of individual cognition has to be integrated
into a framework of interacting individuals who present to each other
possibly conflicting mental products. Various types of interactions are
featured in the models surveyed, but none captures all the complexities
involved. In actual societies, to give a basic example, people do not concern
themselves with the ‘typical’ or ‘average’ belief, as they are made to in
existing critical mass models. They attach more importance to the beliefs of
their close acquaintances than to those of strangers.
Recall that in some theories variables such as culture and ideology are
treated as exogenous obstacles or catalysts to efficient adaptation. In the
suggested approach, these variables would be endogenous, in that they would
emerge tiom individuals’ choices. oreover, the culture and ideology that
individuals help develop would, in turn, influence their subsequent choices.
The approach would not feature an arbitrary distinction ‘between‘base’ and
%upelStructure’:the rules, customs, traditions, and popular bc!iefs that guide
and cznstrain individuals would be accorded a primary role in the evolution
of human civilization.
Ultimately, the tendency to cliug to the status quo will have to reconciled
with the seemingly contradictory fact that societies are capable of immense
change, as attested to by the history of civ tion. This tangled problem
has not receivsd much attention, although k (1973-793 and, as men-
tioned in section 5 above, Day (1987) have some pertinent insights. I
d with two speculations on the subject, both of which bear the influence of
yek and Day. Thp: first thought is that, because of their cognitive
limitations, people have difficulty interpreting the status quo, and so hey
inevitably make errors in trying to preserve 3t. Even if they are solidly
ainst change, their decisions thus evolve over time, albeit in am unpre&c-
 T Kuran, The tenacious past 169

table manner. The second thought pertains to the dependence of the

consequences of one decision on other decisions. This dependence implies
that keeping a decision intact over time does not preclude its consequences
from varying. They may well, if in the meantime other decisions have
changed. In the preset.ce of certain feedback mechanisms, pressures for a
longstandingdeciiion to be changed may thereby be generated.

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