An Institutionalist Approach to Local Restructuring

Much of the inspiration of the ‘contextual turn’ in economic geography and regional development studies comes from institutional economics, and its focus on economic life as both an instituted process and a socially embedded activity. The concept of institution has been used in a variety of ways, however. Often the concept is defined in a broad and all-inclusive manner, or it is just stated that institutions are important, without discussing the content of the concept in any depth. The aim of this paper is to contribute to a better understanding of the concept of institutions and the relevance of an institutionalist approach in studies of local and regional development. It starts with a brief overview of the various schools of institutional theorists and the controversies and divergence among them. I argue for the value of a broad conception of institutions, which includes cognitive constructions and normative rules as well as regulative structures. The theoretical discussion is exemplified by a presentation of how an institutionalist approach can be utilized as an analytical framework in a study of the restructuring of four small Norwegian mining communities. The study identifies several types of institutions that in various ways have influenced the process of restructuring and its outcome. These institutions are operating at different geographical levels and reflect regulative constraints, normative obligations and expectations, as well as cognitive classifications and identities. A better insight into the functioning of these institutions will enhance our understanding of the capabilities, problems and prospects of this kind of community.