Network capital dependent path-dependency

Abstract

Path dependency is created and maintained by three intertwined influences of network capital; that is, the inertia of the networks, the culture which defines the proper use of network capital, and the way such network capital fits into the local and global institutional setting. Following a brief introduction of the terms network capital and path dependency, I develop an extremely simplified dual typology to differentiate between network-sensitive and network-insensitive societies. These two extremes of a continuum characterize societies in which either everyday life is under the total domination of network capital or where networks are auxiliary resources to be used in rare and special situations. I will show how both communism and post-communism have been a fertile institutional setting for the emergence of network-sensitivity and how network capital under such conditions become so powerful that it shapes other institutions to its needs. In the last section I shall argue that the mechanisms I described in a networksensitive institutional setting are present in a network-insensitive one as well, and that there are signs that globalization increases the level of network-sensitivity all over the world.