Under new institutional theory, institutions can be categorized as formal and informal, and the informal institutions can be further categorized as:
A) normative and cognitive.
B) normal and abnormal.
C) informally cognitive and formally cognitive.
D) effective and ineffective.

Question

Quizplus · Accepted Answer

According to new institutional theory, institutions can be categorized as formal and informal. The informal institutions can be further categorized as normative (based on social norms and values) and cognitive (based on collective beliefs or knowledge). Therefore, option A, normative and cognitive, is the best choice. Option B - normal and abnormal, and option D - effective and ineffective, are not valid categorizations of institutions as per new institutional theory. Option C - informally cognitive and formally cognitive, does not provide a clear distinction between formal and informal institutions.

Under New Institutional Theory, Institutions Can Be Categorized as Formal