The article entitled “The Emergence of Cooperative Social Institutions” written by Michael Hechter, proposes a theory of “voluntary construction of institutions”. As mentioned in the article, social institutions have been a focus of sociologists for many years. Hechter poses the theory through the rational choice perspective.
Hechter presents basic concepts in his theory. Institution must be defined and Hechter does this by concluding that a group engaging in regular collective behavior consists of an institution. It becomes necessary for Hechter to define collective behavior, which he does, as any similar thing that different people do in a similar location for an extended period of time.
With these basic terms described Hechter delineates two varying theories about the formation of institutions or institutional genesis as he calls it. He describes a type called the “invisible hand” genesis; created by individuals who have “no common ends or values” and which is created out of each individual’s personal goals and motives (326). This is the view he hopes to contrast.
The view he uses to contrast the “invisible hand” theory is one based on solidarity. This solidarity comes from individuals sharing both “common ends and values”. These institutions are formed not from individual’s goals but from a common sense of goals. Hechter makes a distinction that these institutions that arise from shared goals can be either imposed or voluntary. The case of imposed institutions can be seen in any nation that creates institutions based on a dictators mandates as the people are swayed to believe in the manner that the dictator believes or are forced to by fear of punishment. Contrarily, voluntary institutions arise from any group of people who create an institution of their choice. This happens in cases such as those who come together to work on behalf of a certain crisis such as flooding or other natural disasters which bring community members together to create organizations to help each other and even to set up emergency organizations for long term use.
Hechter makes a clear distinction that these cases are sufficient for conventions, or agreements between people, and not for the establishment or what he calls cooperative institutions. Cooperative institutions are those made of individuals who organize to serve each other in order to create a surplus through their specific grouping, and who thus must deal with a free-rider possibility. A free-rider is anyone who hopes to profit from others work without their own contributions (326). Hechter further divides the cooperative institution into a four tier process. He ascribes each tier these names: the first tier free-rider problem: design-making, the second tier free-rider problem: establishment of an initial constitution, the third tier free-rider problem: implementation of the design and by-products of extant cooperative institutions: a fourth tier in institutional genesis(327-329).
This analysis is clearly a macro analysis of institutions. Hechter’s views of the “invisible hand” and the solidaristic institution both deal with how institutions are created out of societies and how these institutions function rather then how each individual functions within the institution. Hechter's further definitions of conventions and cooperation move toward a macro view as they dually deal definitively with whole groups within a society.
His macro theory is developed in the function of the institutions, which produce either public or private goods or services. Hechter does not explain how the individual might profit in any function of the institution except to state the common good is enhanced by a cooperative institution.
Micro theory is only touched on in the first tier of the free-rider problem. Here Hechter describes the free-rider as one who may have an individual incentive as opposed to the group good. This incentive would bring a greater benefit to the individual rather than the group. It is quickly turned to a macro aspect in Hechter’s statement that “selective incentitives are themselves a collective good” (328). He states that these personal benefits only arise form the group in that without the group’s contribution the incentive would not arise for the individual. This possibility creates the second tier which is a formal institutional constitution and thus creates greater solidarity of the cooperative group.
Both structure and process are touched upon in Hechter’s theory of institutions. The structure of an institution is described in the definition of an institution and in the particular definition for the particular type of institution. Where the type of institution is the “invisible hand” type then the structure is one made of individuals with no “common ends or values”. Where the type of institution is the cooperative institution the structure is one of individuals with “common ends and values”.
In particular the process is noted for the establishment of the cooperative institution. This process is explained by solidarity in the four tiers and thus can be seen as the actual structure of the cooperative institution; once the institution is first created. The first tier deals with the idea that at least on design is required to bring the group together to create the institution. This creates the common goal for the institution and leads naturally to the second tier in a cooperative institution.
The second tier process deals with the cooperative institution setting up a constitution. This constitution places each individual in their particular place within the organization. This hopefully leaves no one to benefit without contribution, such as the free-rider this constitution will delegate the specific work for the individual based on individual preferences and rational process that “seems to offer the greatest amount of good at the least cost” (328).
The first and second teir bring the institution together and designate each individual’s place in the cooperative institution. The third tier deals with both implementing the goals of the institution and further dealing with the idea of a free-rider. This tier is the process of excising formal and informal controls on the group to curtail the free-rider problem. If the free-rider is allowed to continue the group will unravel. This process includes that the implementation of production and distribution be visible to keep all members accountable.
The final tier is a change in the actual function of the institution. This occurs because the group is organized and sustaining itself as a cooperative organization. This happens when a group makes their goods available to the public who are not contributing to the group. By making the goods public the group can gain a reputation which will also increase the group good.
These four tiers of the cooperative institution are a definite step by step process in the formation of the institution. Once established however, they become the structure of the institution as well. Hechter examines both the process and the continuing structure of the cooperative institution.
Hechter describes an evolving group as it becomes an institution through the four tiers. As mentioned in the fourth tier, Hechter focuses on a change that an institution may under go as it develops. However, the focus of the other three tiers is very much an issue of what makes the institution stable. The first tier deals with the creation of production rules. These rules help maintain the stability of the institution. The second tier serves a similar function in the creation of roles for each member of the group. These tiers are vital in the creation and sustaining of the institution.
In the third tier the focus of stability is evident in the idea that if “there is no means of deterring free-riders, then there will be sub optimal production of the joint good” (328). This idea ensues that there must be some type of formal or informal control to keep the stability of the institution. Hechter describes the apex of this control as informal in the form of visibility of production and distribution. This creates a climate for other members in the institution to assess and curtail the free rider problem. Hechter also concludes that “it is rational for individuals to establish formal controls” to protect their investments in the institution (329).
This theory can be observed in various types of groups that become cooperative institutions. Most groups will encapsulate some aspect of these ideas to a closer degree than others. Two practical illustrations of cooperative institutions that deal in non-material goods will be examined in particular a church group and a high school or college classroom.
The first of these is a group called the Blue Water House of Prayer. It is a group of individuals (from different cities) who come together in a specific location (an assigned church building each month) to reach a common good (city transformation). This group is made of members who see a demand in the city of Port Huron to bring various church organizations together, create a greater moral base for the area, and share a greater degree of love to others. By these elements they are set up as an institution.
The first tier is satisfied by the roles that each person is placed in. These roles include musicians, preachers, intercessors, researchers, prophets, community activists, and teachers. In this case the free-rider, who would attend and have no role, is kept accountable by becoming a prayer partner and with their voice in the song services. Some members who do not have roles on the official music team will bring instruments to play in their seats. The second tier is satisfied by a written set of goals and roles. The demand of this institution’s function is somewhat limited and thus the growth and production remain thus limited. In its existence over the past two years the music team, which is the Blue Water House of Prayer’s main focus, has grown from two members to 15 members.
In this music team the free-rider problem does have the potential to exist. That is at times a new member will join the group to play on Friday nights. However, this free-rider will not attend practice on Thursdays or the School of Prayer on Sunday nights. In this instance, the free-rider is asked to come to the other meetings by the leaders and by the other members who vocally pronounce that they will be at the other meetings. This visibility of productions forefronts the group good and the idea that the groups good will only be met when each member is in unity and attending all meetings. In the event that these informal controls do not work, the free-rider musician will be asked not to play with the group as a formal control.
The fourth tier in this institution is in the process of emerging. One aspect is the creation of the School of Prayer which meets to educate all members in the role of prayer partners. The group is fairly organized and has plans to create other groups that will have meetings on other days and plans to have meetings seven days a week.
A final example of this is the high school or college setting where a group is formed with a common goal. This is the case in Sociology 400 where a certain number of people will meet in a specific place weekly to cooperatively work on the study guide questions. The group decides who will answer each question and how this will be done. Secondly, the joint good of the group is considered. By each member not having to answer all the questions they satisfy the second tier as Hechter relates, “ it is probable that each rational individual will prefer a realistic design that seems to offer the greatest amount of the good at least (private) cost”(328). They are getting the answers and having to do only a portion of the work apiece. Their aim is to with less work still acquire a good grade.
Of course in this situation there will be the free-rider problem; the person who attempts to get the answers from their group members without contributing. In this case there are informal controls that control the free-rider problem. In one case a group member was not asked to join the group the second time that the study guides needed to be done. A similar situation occurred when groups where mandated by the class for Sociology 321. In this instance there was a formal process for any group member who was not participating. The other group members could make an appeal to the teacher who would then remove the member from the group.
In this case the introduction of the fourth tier only exists if the members continue to stay in the group past the point of the class and continue to meet for subsequent classes. A continuation into matters pass the class room would evidence the organization producing goods rather than the initially proposed goods.
Hechter’s theory of the emergence of cooperative social institutions is a macro exchange theory that focuses on the process of how these institutions are created, but mainly on their structure and how they remain stable. This theory can be seen to work in the examples in the article of hunting and gathering societies and banking, which deal with material goods, production, distribution, and surplus. They can also be seen in non-material examples such as religiou
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