Unpacking Nuances in the Relationship Between Social Structure, Institution and Economic Action

• In Event: 571 - Section on Economic Sociology Roundtables (one-hour)
  In Refereed Roundtable: Table 13. Theories of Economic Action and Comprehension

Abstract

Building on classical sociological theory regarding the interdependence of institution and social structure in creating belief systems and social norms that shape behaviors and institutional practices, I conduct a two-stage analysis to highlight nuances in the relationship between social structure, institution and economic action. First, I develop a conceptual framework to explain (1) how different types of social structures at the macro level may relate differently to economic activities, (2) how institutional and political arrangements may affect this relationship, and (3) the conditions under which institution may influence economic action. Second, I use individual entrepreneurial activities (i.e., starting a business), social structure (relationship-based trust and non-relationship-based trust), and institutional and political arrangements indicators across 46 societies to test this conceptual framework. Results show that starting a business responds positively to non-relationship-based trust, but responds negatively to relationship-based trust. Results show that rule of law reduces adverse effects of relationship-based trust on starting a business. Finally, results show that starting a business responds positively to rule of law and democracy in societies where corruption and rent-seeking are non-prevalent.

Author

• Daniel Auguste, University of North Carolina