In this volume, political scientists and economists examine, critique, and extend the political economy of social institutions, an approach that employs rational choice assumptions to generate social theory. The editors' concise but thorough introductory survey notes that while this literature has expanded considerably, it focuses more on the effects of institutions than on their origins, and more on stability and maintenance than on emergence and change. The key to improved theory, they argue, is to better understand the role of institutions in shaping social expectations.

Two general critiques that follow expand on this point, stressing the importance of arrational psychological factors and cultural embeddedness for the choices of rational actors. Douglass North offers five propositions as an agenda for future research, emphasizing the cognitive limitations of actors and the evolutionary and path-dependent nature of structural outcomes. Jack Knight argues convincingly that rational choice modelers need to improve the way they interpret theories substantively, both in demonstrating the relevance of theories to real societies and in maintaining consistency with underlying assumptions.

Continuing along these lines, the remaining chapters are unusual (for any theoretical approach) in the range of methodological and substantive orientations employed by the authors. This a strength rather than a weakness, because each chapter relates these orientations to the approach as a whole, particularly when they diverge significantly from typical practice.

Taken together, the chapters employ both formal models and historical analysis, cover both non-specialized mutual enforcement and specialized enforcement, and discuss the role of personality and ideology in shaping outcomes. More specifically, the chapters written by Avner Greif, Paul Milgrom, and Barry Weingast and by Randall Calvert compare the incentives behind different enforcement regimes, the former analyzing the impact of merchant guilds on honest trading in late medieval Europe and the latter examining mutual and specialized enforcement under a variety of informational conditions. Itai Sened models the incentives for governments to grant rights such as freedom of speech and assembly and public access to laws, while Norman Schofield discusses formal results on the interaction between electoral laws and the configuration of voter preferences in determining political stability.

The two chapters that diverge most radically from conventional rational choice assumptions about institutions are those by the late William Riker and by Jon Elster, both examining the history behind the framing of the U.S. Constitution. Riker asserts that the recognized need for the Constitution to embody a consistent set of values allowed the dominant role to be played by the individual with the clearest intellectual agenda, James Madison, even though this agenda did not entirely reflect the distribution of political power. Elster examines the debate over the population and representation, concluding that the extent to which principled argument was employed cannot be explained by any model that views it as a mere cover for self-interested bargaining.

Amongst this diversity of analysis, the main things missing from this volume are positive theories of institution selection. While the chapters do an admirable job of addressing sustainability and maintenance head-on, they only sideswipe emergence and change. These are discussed and analyzed, but little attempt is made to predict with any generality which institutions will arise under particular sets of circumstances nor how institutions will evolve over time. Given path dependence and multiple equilibria, this leaves the positive modeling of social institutions indeterminate.

Of course, such indeterminacy is preferable in many ways to the inaccurate determinacy of ignoring institutions or assuming their uniformity across time and space. Furthermore, other theoretical approaches to institutions have not enjoyed huge success in predicting emergence and change either. However, any recasting of the political economy of social institutions away from general prediction will make the boundary between an explicitly rational choice methodology and the intentional analysis of action adopted by much of the rest of social science somewhat fuzzy. Moreover, at least in one respect, it leaves rational choice approach to social institutions in a poignantly similar predicament to the structural-functionalism that was its target during the 1960s: not exactly contrary to change, but apparently providing no set of general theoretical tools to address it. This implies that rational choice theorists of institutions have the following choice set: 1) embrace its essential continuity with other approaches, 2) attempt to predict institutions, even if overall success seems somewhat remote at this point, or 3) do both.