Institutional Lock-in

When a policy or system becomes formalized through large-scale capital investment and becomes difficult to reverse even after a change in administration, because the cost of abolishing it exceeds the cost of continuing it. Once resources are allocated, interest groups form and institutional inertia reinforces itself.

Read the daily articles behind this idea on the Chinese edition.

Related principles

• → Links
  Infrastructure-Led Ecosystem
• ↗ Extends
  Centralized Authority Over Information Credibility
• → Links
  Market Disconnect: Fundamentals vs. Valuation Decoupling
• → Links
  Price Inversion Paradox
• → Links
  Capital Addiction
• → Links
  Centralization of Planning Authority
• → Links
  Technology-Enabled Standardization via Public Coordination