Institutions outlive the problems that originally justified them.

Evidence

Originally, the auction was institutionalized in order to limit fraud during sales. Nevertheless, three centuries later, fraud having been almost eliminated, it is still the main sales mechanism. The persistence of the auction, despite heavy criticism, leads us to question whether the legislation in the field of timber sales is path dependent. This path dependence could be explained by the increasing returns obtained by members of the timber industry who in time learned the specificities of the auction mechanism. — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 740

Categorization

• DEEPTHINKING: A clean statement of path dependence: the founding rationale evaporates but the institution persists via incumbent learning returns.
• XREF: Connects to Milgrom’s law-merchant work on institutions solving information problems that no longer exist. — connects to: Power holders routinize outcomes into institutions to cut mobilization and application costs — Walter Korpi, The Iceberg of Power below the Surface:…, 9