Institutional Dualism in the Everyday Economic Practices of Small Market Actors

Abstract

Economic history and institutional economics examine how formal rules and informal norms shape economic behavior over time, particularly in contexts where historical legacies continue to influence contemporary practices. Within this field, growing attention has been given to institutional dualism, a condition in which formal regulations coexist with informal, historically rooted norms that guide everyday economic activity. However, little is known about how economic actors themselves subjectively experience and interpret this dual institutional environment in their daily practices, raising the question of how institutional dualism is lived and made meaningful at the micro level. Here, an interpretative phenomenological approach is used to explore how economic actors experience, interpret, and navigate the coexistence of formal regulations and informal historical norms in everyday economic life. Data were generated through in-depth semi-structured interviews and analyzed using interpretative phenomenological analysis to identify essential themes grounded in participants’ lived experiences. The findings reveal that institutional dualism is experienced as an ongoing process of negotiation, where economic actors navigate the tensions between formal regulations and informal norms, marked by feelings of fear and uncertainty. Participants also engage in a continuous process of meaning-making, developing hybrid practices that blend both formal and informal elements. These experiential processes demonstrate how institutional persistence is reproduced through subjective interpretation, with actors actively negotiating and adapting to the coexistence of these dual forces, rather than merely responding to structural constraints. By foregrounding lived experience, this study advances understanding of institutional persistence and highlights the value of phenomenological approaches for future research on institutions and economic behavior.