evolutionary trajectories of development, at the level of regions and firms, which suggest that a static
analysis cannot reveal differences that are the result of localised trajectories of development in the past.
In this respect, evolutionary economics differs in a fundamental sense from the static approaches of
neoclassical and institutional economics. The latter two approaches, at least in their archetype form,
explain differences from either different in factor conditions or differences in institutional set-ups. In this
respect, neoclassical and institutional economics share a comparative approach, which is perhaps best
illustrated by the debate surrounding economic growth. Considering regional income, neoclassical
economics approaches the matter by assuming advanced countries characterised by the highest labour
productivity, and lagging countries that automatically will converge as technology diffuses as a public
good, and as capital moves to lagging countries and labour to the advanced countries. The absence of full
convergence, and the question how regional differences emerged in the first place, has led to neoclassical
growth theorists to introduce some notion of externalities (possibly spatially bounded) in ´new´ growth
models. Differences in, for example, human capital can then explain some part of the unexplained
variance, yet fail to capture the qualitative differences in development, both technologically and
institutionally. Or, as Martin and Sunley (1998) have put it, “... the models treat externalities in a general
and abstract manner and, in relating them to the rate of technological progress or economic growth, they
do not consider the actual direction or trajectory of these processes” (p.216).
An institutionalist (Weberian) approach takes the existing qualitative differences in institutions as its
point of departure. Differences in regional income can then be explained from differences in institutions,
with the more advanced countries being characterised by different institutions than less advanced
countries. The institutions supporting growth can be derived from cross-sectional analysis with institutions
as explanatory variables. A related mode of analysis is that of business systems (Whitley REF), which
characterises nations by their specific business institutions. Though such an approach precisely
acknowledges qualitative differences between countries, it does not capture the path dependent specificity
of technological development, learning and institutional change. Rather, it runs the risk of adopting a ‘best
practice’ logic suggesting that institutions from successful regions can be transplanted to a new context,
and, if so, produce the same beneficial outcomes.
Again, with respect to institutional economists, we do not claim that all institutional economists
headed under the umbrella of institutional economics use comparative analysis only. On the contrary,
many people advocating institutionalist analysis have stressed the historical specificity of economic
development, and, the possibility that multiple trajectories of development exist rather than one ideal-type
of economic growth. Hodgson (1998), for example, stresses that institutional economics does not only
involve comparative studies on different institutional regimes with different economic performance, but
also institutional change, and, very often, institutional change as an evolutionary process. Some, including
Samuels (1995), even characterise institutionalism as an evolutionary approach, due to its emphasis on
process and evolution: “Veblenian evolutionism is Darwinian in having neither cause of causes nor
predetermined end state; it is non-teleological and open-ended” (p. 580). Still, institutions being explained
and explanatory, it remains unclear what are the drivers of institutional change (unless one adopts a
teleological approach after all).
It is important to recognise, however, that although some proponents of institutional economics make
use of evolutionary theorising, one can still argue that the two approaches do not overlap as they differ in
their explanandum. Institutional economists are interested in explaining institutional change, and how this
in turn affects economic life, while evolutionary economists are after explaining technological change and
12