Abstract

As command economies transition toward economic liberalisation, the underdevelopment of market-supporting institutions often creates institutional voids at the microscale. Drawing on Fligstein and McAdam’s (2011) theory of strategic action fields, this paper examines the emergence of ‘Institutional Fiefdoms’: socially constructed spaces of collective action where incumbents, typically the state, rely on politically aware social actors to develop policy and provide governorship within these voids. The governance units within an institutional fiefdom are drawn from the challenger base of the strategic action field, moving into the middle position to influence and shape how the field evolves. Leveraging their social and political capital, they can design policy and processes that contradict state-held ideologies by positioning it appropriately within the legal-institutional context, and ensuring economic and political objectives are met. By developing support mechanisms that reinforce the structure and stability of the field, governance units can enforce desired behaviours among challengers, whilst maintaining their own central position and autonomy. Importantly, governance units can establish new institutional norms, influencing the wider state infrastructure, for example, through the creation of new laws. This paper is focused in two contexts, which have undergone economic liberalisation; rapidly, in the case of the Republic of Poland’s Shock Therapy, and gradually, in the case of the Socialist Republic of Viet Nam’s Doi Moi. The paper focuses specifically on the changes that impacted the nonprofit sector, in particular, social enterprises. The findings contribute to our theoretical understanding of field governance mechanisms, as well as how governance units themselves emerge, operate, and express their agency. We position institutional fiefdoms as being defined by rule complexity, new or novel institutional norms being established, and the embedding of the field’s social order.