Quantum Holistic Phenomenological Approach; a New Perspective to the Institution and Institutional Changes

The purpose of this article is to redefine the concept of institution and introduce  the idea of transition duration in the process of institutional changes. One of the key features of  the  transition duration is the uncertainty it brings,  leading to the unpredictability in individual's behavior for each other. The concept of uncertainty and its implications were first  introduced in economic literature by John Maynard Keynes, who attributed its origin  to the “animal spirit” of man. In order to understand the reasons for the existence of the transition duration in institutional changes and its impact on policy-making, it is crucial to rethink the concept of uncertainty. However, in this research, the source of uncertainty is seen as intentional actions of human. In the 20th century, by accepting the Causal Closure of Classical Physics (CCCP), social science has evaded to study and discuss the first-person intentional actions and their effects on social phenomena. Practically, studying the effects of first-person intentional actions on economic and social phenomena requires departing from the CCCP. On the other hand, in recent years, the quantum decision-making  theory has emerged, which suggests that individual's behavior follows the laws of quantum physics. If human behavior follows the basic laws of quantum physics, then by applying idealistic interpretations of quantum theory, one can  redefine the individual's decision-making system in such a way to include the role of intentional actions and  the influence of the experimental background in  decision-making system. Therefore, this study  is purely theoretical in nature. The main presuppositions on which the arguments are based are: 1) Man is a social but utilitarian being who uses cost-benefit analysis in decision- making . 2) The model of  a person's decisions and their cost-benefit analysis has a quantum nature and does not follow the rules of classical physics.
Applying the idealist  interpretation of the quantum theory, the present study intends to introduce a novel conceptual framework titled "The Quantum Holistic Phenomenological Approach" to analyze the nature of institutions and institutional changes based on its relationship with the first-person intentional actions, which stem from a quantum cost-benefit model. Based on this, first, a quantum model of the person's decision-making process has been introduced, in which the person's cognition is represented as a  the quantum wave function, and their intention as the cause of collapse, and their experience as  a  process of wave function collapse. This definition highlights two important features: Firstly, the impact of the individual's intentional actions and the experimental context on an individual’s decision-making process are taken into account. Secondly, a person's decisions are optimal from his(her) own point of view at that moment. But because of the dependence of the decision-making process on the intention of the individual and the experimental background, his(her) behavior has inherent uncertainty and is unpredictable for others. According to the nature of individual decision-making in the quantum model, which is accompanied by inherent uncertainty, institutions are the result of the intentional actions of individuals  sharing information with each other based on a cost-benefit model in a given empirical context. This is done to reduce the uncertainty of individual decisions for Others  and enable social coexistence. Also due to the dependency of the institutions on their practical base of formation, imitating the Heisenberg uncertainty principle in the quantum realm, experiences are categorized into two groups consistent and inconsistent. The consistent experiences are those with no external effects, which do not change the people's mental states and their information-sharing approach with others. Acceptation of the path dependency on the institution and some of their stability in our proposed model is due to the absence of the external effects of the consistent experiences. The inconsistent experiences are those with external effects, yielding changes in the information-sharing schemes between people. New and innovative experiences are considered inconsistent experiences because there is no record of them in the mind to share with others. From the perspective of the our theoretical approach, the institutional changes are stemmed from the external effects of pervasive inconsistent experiences that change the pattern of sharing information between people and as a result lead to disruption of the former institutions.
The most important findings and achievements of the introduced theoretical framework compared to the new institutionalism are; the assumption of bounded rationality is rejected so that the foundation of the ubiquitous character of uncertainty in the world is not the individual's imperfect perception of reality, but it is the other's failure, as the third person, to find out individual's optimal choices. Institutions are established according to the intended individual's calculation of the cost-benefit, who decides to share how much of the information in their mind with others and to reduce his/her individuality to lowering the intrinsic uncertainty of their optimal decisions for others, making social coexistence possible. The institutions' function depends on their practical base of formation and individual's intention, especially the political leaders. The reason of institutional changes is the external effects of pervasive inconsistent experiences. Due to the external effects of those experiences, the former institutions become soft and do not work properly. Formation of the new institutions following the novel situation requires that the transition duration passes by. Governments need to engage directly in the rent distribution to form and stabilize the new institutions to reduce the time needed for the transition duration.
According to new institutionalists, the best  institutions for leaving societies out of the trap of underdevelopment are those that restrict  the intentional actions of political leaders in distributing rent. In fact this  argument  is based on the assumption that individuals have an imperfect understanding of external reality. In such a world, what can lead to the gradual correction of the error of people's choices in conditions of uncertainty is the learning caused by competition in conditions of scarcity. However, the proposed  " Quantum Holistic Phenomenological Approach"  in this study reject the assumption of  imperfect understanding of reality by individuals. Our theoretical approach suggests a new perspective on  institutional changes, which aligns with the findings of the last two decades of studies about rent distribution  on the development process of countries. In fact  due to the political, social and economic consequences of the transition duration,  intentional actions of political leaders in the distribution of  rent is inevitable. Unlike the new institutionalists, our proposed theoretical framework does not make a general judgment about the limits and boundaries of these intentional actions or the most efficient form of institutions.  The optimality of leaders' intentional actions in allocating resources depends on the political, social and economic conditions in which institutions are formed, as well as the ideology of political leaders and the structure of the natural endowments of that society. Therefore, the focus should be on discussing the quality of these intentional actions, rather than limiting them.