Abstract
This paper introduces the concept of “borderline institution” to characterize an institution in which actors push upstream the boundary between the normal and the pathological and find downstream ways of systematically taking advantage of this push ex-post. This happens for example when actors make decisions based on predictions; and are simultaneously allowed by vertical concentration to manage conflicts generated by the consequences of these decisions when these predictions fail. A theory of how to identify a borderline institution based on this vertical concentration uses bankruptcy proceedings at the Commercial Court of Paris as an example, relying on Karl Polanyi’s concept of double movement and Margaret Archer’s concept of double morphogenesis. In this court, bankers as lay judges can control both credit-related predictions at the bank, and bankruptcy proceedings at the court. Enabling conditions for borderline institutional entrepreneurs as “vertical linchpins” in this multilevel context explain how they concentrate enough power to reach a position from which to drive such dynamics. The conclusion asks whether societies promote new borderline institutions to face contemporary and urgent existential challenges.