Coordination Funds

• Applicant: Professorin Dr. Lydia Mechtenberg
• Subject Area: Economic Policy, Applied Economics
• Term: since 2024
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 513092447

The Research Unit “Big Structural Change” (RU BISC) contributes from a micro perspective to the theory and empirics of institutional change. We define institutions as formal or informal rules, e.g., laws or social norms, to which stakeholders ascribe a normative quality. The RU focuses on change that is "big" in the sense of potentially unsettling the societal structure. The latter is defined as the total web of rules that determine how the state, economy, and society are organized. Its change can be either incremental and rather slow or disruptive and rather fast. RU BISC defines three channels of impact essential to these change processes: externalities, beliefs, and legitimacy. We specify their causal interconnections in our BEL-model which is the research framework of this RU. We define externalities in a wide sense as the reallocation of material and immaterial costs and benefits among stakeholders when global trends (drivers of change) such as climate change, mass migration, and globalization and technological change hit the societal structure. (In the second funding period, we take into account that agency reproducing the societal structure contributes to the emergence of the drivers of change.) In response to the externalities that arise when global trends hit the societal structure, beliefs about the quality of existing institutions change, and new political, social, and economic conflicts arise. This may but need not affect the legitimacy of institutions. The former is the case if, for instance, stakeholders develop an awareness of being disadvantaged not only in terms of their material and social positions but also in terms of their representation by and access to relevant institutions, or if values, i.e., general normative beliefs, have changed and conflict with those reflected in existing institutions. If institutions that are central to the societal structure, and thus the societal structure itself, lose legitimacy, social responses to the new conflicts may trigger disruptive big structural change; if not, they may result in incremental (i.e., stepwise and slow) big structural change (leading hypothesis). Two working hypotheses, the conflict-escalation hypothesis and the conflict-abatement hypothesis, determine which types of responses to the new societal conflicts lead to which types of change. RU BISC's nine subprojects are structured along these two hypotheses and the three main drivers of change, i.e., climate change, globalization and technological change, and mass migration. In all subprojects, RU BISC empirically investigates the causal mechanisms of big structural change, applying various methods from the continuum of causal inference methods, predominantly theory-based laboratory and survey experiments.

• DFG Programme: Research Units
• Subproject of: FOR 5622: Big Structural Change