Framework for the Empirical Analysis of Institutional Changes and Its Applications: Towards Understanding Institutional Changes

Abstract

This paper presents a framework to decompose institutional changes into some factors representing a change in the population and changes in behavior. Then, this framework is applied to two cases, that of the main bank system in postwar Japan and that of the corporate organization in the prewar Japanese cotton spinning industry. A substantial part of the institutional changes in these cases is explained by changes in the firm populations, which suggests that, at least in some cases, the evolutionary game approach is valid for understanding institutional changes.