Bricolage as Agency in Institutional Creation: The Case of Special Bank Resolution Regimes in Denmark and the United States

Theories of gradual but significant institutional change offer an important contribution to endogenizing explanations of change in a historical institutionalist tradition that too long has been dependent on exogenous shocks to explain significant policy shifts. Despite its many merits, the gradualist approach ducks a central question: how are new institutions created? Because this central question is left unanswered, the gradualists implicitly turn to more traditional critical juncture-models to find where existing institutions originate and thus reproduce the theoretical divide between explanations of large and small change. This conceptual paper argues that if the core assumptions of institutional heterogeneity and actors' cognitive limitations are applied to situation of institutional instability and crisis, the gradualist approach shows its relevance for analyzing institutional creation following crises. The paper suggests that the concept of bricolage is useful for understanding how policymakers create new institutions through the re-ordering of existing institutional elements. Thus, the concept of bricolage opens up opportunities for understanding how an incremental process of change lies behind outcomes of institutional change, whether they are large or small. The empirical relevance of these arguments are illustrated with a comparative case analysis of post-crisis special bank insolvency policies in Denmark and the United States.