A Combinatorial Theory of Institutional Invention

Policymakers constantly face new problems calling for unprecedented institutional solutions. Yet, we still poorly understand the inventive process that leads to the emergence of new institutional forms. Existing theories argue that exogenous changes provide incentives and opportunities for institutional invention. However, these theories fail to understand how the inventive process itself endogenously structures the emergence of institutional inventions. Drawing from complexity theory and the work of Brian Arthur, this paper develops a structural theory recasting the process of inventing new institutions as the combination of pre-existing institutions. It further argues that the spatiotemporal distance between institutions shapes the emergence of new institutional forms and their regime’s trajectory. It illustrates these expectations by looking at three distinct regimes: data protection, environmental governance and investment governance. Together, these illustrations showcase how a combinatorial theory can help make sense of the emergence of unprecedented institutions and, more generally, the pace of unfolding complexity in various international regimes.