ABSTRACT
Chapter 14 discusses institutional entrepreneurs’ role in creating rules of the game for society. We discuss the risks faced by institutional entrepreneurial innovation and the elements that determine success or failure. It returns to the Axial Age to examine the five basic “ways” (“dào”) established by the great thinkers of that time to advance human cooperation and establish a harmonious society. We analyze the ways in which these ways aided humanity in escaping the Prisoner’s Dilemma. We prove that the basic conclusions of these ways align with Game Theory. We also analyze Confucian culture as a combination of law and social norms as well as the ways in which it coordinates expectations, mediates conflicts, and incentivizes people’s cooperative spirit. We also point out that the main fault in Confucian culture is that it never found an institutional means to restrict the monarch. The type of institutional means to do this is constitutional government and democracy.
