Path Dependence

Path dependence is an approach to understanding how organizations, institutions, or technologies become “locked in” to particular choices as a result of their structural properties or beliefs and values. Path dependence begins with a straightforward assertion that “history matters” in studies of governance and then attempts to explain exactly how history matters through studies of the means through which constraints on normal behavior in organizational life appear and the form that these constraints take. It has been used to study how the QWERTY keyboard became dominant (despite its suboptimality in terms of typing speed on today's computers) through how studies of policy change in health care and welfare systems.

Path dependence is most often used as a concept by studies based around the historical institutionalist approach to political science, with its attendant focus on how institutions come to constrain organizational life. It has become a key concept to explain why institutions in political life don't change as much as we might expect if adopting, for example, a rational choice approach to human agency would suggest any continuity results from careful calculation of the costs and benefits faced in a particular decision-making process. Instead, path dependence tends to suggest that policymakers work within a series of more limited assumptions about their world, learning less frequently and being rather more cautious.

In common with social learning approaches to policy (both share the common heritage of historical institutionalism), studies of path dependence demonstrate that governance processes are often subject to considerable amounts of inertia. Several recent studies of changes in the welfare state suggest that change can only be effected in exceptional situations in embedded welfare regimes. Studies of how technologies become path dependent suggest that “externalities” resulting from supplier and customer preference can lead to the dominance of one particular video recorder over another, even where the technology that “loses” might be superior.

A singular problem with uses of path dependence comes in its careless use—it can often appear in studies as a mere assertion that “history matters” in a particular case with little attempt to explain why or how. In order for the concept to have some theoretical credibility, a number of authors have suggested that it might be based around a particular form of technological and institutional development that has particular defining features.

For a path-dependent system to be in place, three elements need to be present. First, there is the need to demonstrate that at the creation of the institution or technology we are analyzing, a contingency or series of contingencies occurred that led to the selection of one outcome over another, which, given another set of initial conditions, might have led to another outcome having been selected instead. In other words, there is a strong element of contingency in the model—chance can end up as a deciding factor. Second, we need to demonstrate how, after a particular technology or organization form has appeared, feedback mechanisms appear to allow it to become insulated to some extent from change. These feedback mechanisms may be positive (where mechanisms lead to, for example, greater dominance from advocates of the path dependent organization or technology) or negative (where mechanisms interfere with attempts at change from alternative organizations or technologies). We should [Page 668]note that the precise feedback mechanisms involved in path dependence are subject to some controversy. Paul Pierson appears to suggest that path dependence is about positive feedback mechanisms only, following the hard science of the subject in original contributions by Kenneth Arthur and W. Brian Arrow. But other writers appear more relaxed, accepting the possibility of both positive and negative feedback mechanisms when the approach is adapted to the study of political systems.

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