The Anatomy of Network Failure *

Abstract

This article develops and defends a theory of “network failure” analogous to more familiar theories of organizational and market failure already prevalent in the literature on economic governance. It theorizes those failures not as the simple absence of network governance, but rather as a situation in which transactional conditions for network desirability obtain but network governance is impeded either by ignorance or opportunism, or by a combination of the two. It depicts network failures as continuous rather than discrete outcomes, shows that they have more than one cause, and pays particular attention to two undertheorized—if not undiscovered—types of network failure (i.e., involution and contested collaboration). It thereby contributes to the development of sociology's toolkit for theorizing networks that are “neither market nor hierarchy.”