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10. A further development in the institutional choice literature is the ‘Equilibrium View’ theory, which considers a more comprehensive treatment of institutional choice by considering the formal and informal enforcement forms within a unified framework – see Aoki, M. (2001) Towards a Comparative Institutional Analysis (Cambridge, MA: MIT Press); R. Calvert (1995) Rational actors, equilibrium and social institutions. In J. Knight and I. Sened (eds) Explaining Social Institutions (Ann Arbor, MI: University of Michigan Press), pp. 57–94; A. Greif (2006) Institutions and the Path to the Modern Economy (Cambridge: Cambridge University Press); A. Greif and D. Laitin (2004) A theory of endogenous institutional change. American Political Science Review, 98(4), 633–652; R. Myerson (2004) Justice, institutions, and multiple equilibria. Chicago Journal of International Law, 5, 91–107; A. Schotter (1981) The Economic Theory of Social Institutions (Cambridge: Cambridge University Press). This strand of literature argues that interactions between all constraints that individuals face (e.g. institutional and exogenous constraints) coordinates individuals to one of the multitude of possible equilibria by achieving a shared set of expectation about each other's behaviour. According to the Equilibrium View, the enforcement system change becomes fundamentally not about changing rules, but about changing expectations. The enforcement system change may emerge as a reaction to changing institutions and/or exogenous constraints by affecting people's expectations. A rule that fails to shift people's expectations in the desired way may not lead to enforcement system adjustment. Both the TCE and the CC theories are compatible with the Equilibrium View – see C. Kingston and G. Caballero (2009) Comparing theories of institutional change. Journal of Institutional Economics, 5(2), 151–180.CrossRefGoogle Scholar

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13. One way of the norm's adjustment may occur through changing interpretation of scriptures (not examined in this paper). Religious norms are usually rules that are developed over a long period of time and, in most cases, their recording is very inconsistent. Their transmission through generations and among individuals is usually done orally or through informal methods. In such conditions, their interpretation may change over time and may differ between regions and groups reflecting preferences, background, history and environment. However, this interpretation driven rule-adjustment will tend to occur over a medium-long period.Google Scholar

14. For example, religions are often against the scientific explanation of the development of the Universe; alternative ways of the family organisation; divorce; adoption of scientific discoveries in every-day life; acceptance of other religions; and so on.Google Scholar

15. Note that this also explains why religions in general follow a policy of absolute rejection of other religions. If accepting the norms of other religions, it would reduce their credibility and thus the intensity of beliefs. In the same line of arguments, it follows the explanation of why a split within an existing religion (e.g. the split of the Protestant denomination form of the Roman Catholic Church in the sixteenth century) is usually accompanied by a mutual and absolute refusal of the new denominations.Google Scholar

16. Expressed in mathematical language, the indirect adjustment cost function in RES reaches higher values and has a steeper slope than the SES function. For a given additional gain from the rule adjustment, in equilibrium the RES will adjust less than the SES.Google Scholar

17. An example of a stable society includes ancient agrarian societies.Google Scholar

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