This analysis examines governance's impact on the stability of economic foundations, indicating crucial limitations for adaptability.
Economic systems rely on foundational primitives whose properties determine the stability of higher-level institutional structures. Many contemporary economic frameworks allow these primitives to be modified through governance-based decision processes. This paper examines the structural consequences of such mutability. The analysis introduces the concept of an invariant layer of economic primitives and formalizes how governance mechanisms can induce endogenous instability when core system properties become collectively alterable. In environments characterized by participation asymmetry and heterogeneous incentives, governance-dependent primitives may exhibit structural fragility independent of specific policy choices. The paper demonstrates that durable macroeconomic primitives must satisfy institutional admissibility conditions that preserve invariant properties across governance cycles. When these conditions are violated, economic systems may experience endogenous instability originating from rule-layer mutability rather than from external shocks. These results provide a structural framework for evaluating the institutional stability of economic primitives and clarify the limits of governance-based adaptability in large-scale economic systems.
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Artur Zeitunian (2026) studied this question.
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