Organizations lock into inefficient paths more readily than markets do.

Evidence

Pierson (2000), for instance, highlights institutional density as a salient determinant likely to converge into self-reinforcing effects in organizations. … In his view organizations (in particular, formal political institutions) are more prone to bring about path-building forces than markets, because they act in “a far, far murkier environment” (Pierson, 2000: 260) with weaker forces to correct inefficient courses of action over time. — Jörg Sydow, Georg Schreyögg, and Jochen Koch, Organizational Path Dependence, 94

Categorization

• XREF: Pierson’s institutional-density argument pairs well with the reader’s interest in how structural incentives harden over time; also relates to path-dependence classics like Arthur and David’s QWERTY.
• SEED: Angle: ‘Why Institutions Can’t Correct Course — The Murkiness Premium’ — a piece on why firms and political bodies keep inefficient practices long after markets would have wiped them out.