Powers defines institutions as “political game forms that generate the rules of a group’s economic interactions.” He draws heavily from Leonid Hurwicz’s game theory in developing a model of institutions.
Further on in the paper, Powers refines his definition of institutions:
When combined with historical evidence on the types of political game forms and institutional rules that different societies had, this allows us to explore why some groups have managed to create institutional rules that foster cooperation, and why others have failed. Applications of this include understanding the rise of hierarchy and states, and addressing pressing public goods problems such as climate change. (p. 10)
Political game theory states that institutions develop into a state of cooperation through a series of rewards and punishments for the people who participate in them.
Furthermore, Powers notes that institutions do not evolve into a state of equilibrium:
Individuals should be expected to try to craft institutional rules that benefit themselves. This means that institutional rules can also change as a result of within-group processes, often on much faster time scales and without the need for catastrophic events occurring at the group level. (p. 16)
Finally, Powers notes that his model of institutions is based on an egalitarian cooperative type of society that existed before the rise of agriculture. As he suggests, “future work should investigate how the rules will change if leaders take a disproportionate share of the public good, as happened after the origin of agriculture“ (p. 25).
Readers of this paper may wonder why Powers focuses on egalitarian societies with a hunter-gatherer social organization. He uses these early societies as the basis for developing a model of institutions. He notes elsewhere in the paper that more complex societies have social inequalities that benefit one class of people over another. He implies that future work may focus on more complex societies.
This paper will be of interest to anyone in the behavioral sciences, including economics, sociology, and political science.