Habit, sedimentation and economic institutions

Abstract The concept of sedimentation, developed in phenomenology, provides a bridge between recent discussions of habit in embodied-enactive theories of cognition and skilled performance and conceptions of how habit and routine function in social practices and institutional formation. Although the notion of habit is little discussed in mainstream neoclassical economics, various theorists of institutional economics rightly suggest that institutional structures can shape individual and social habits and routines. At the same time they ignore or say very little about how individual habits and social interactions evolve into institutions. I argue that the analysis of sedimentation can provide a fuller account of the dynamical interrelations between habitual and institutional processes. With a specific focus on the way sedimentation works, I make two suggestions. First, although sedimented habits can be structurally rigid, and often difficult to change, they are also performatively flexible and adaptive in situated action. Second, this performative flexibility reflects principles of transactional plasticity that carry over to institutions.