Path Dependence

… a core concept used in Policy Analysis and Process and Atlas101

Concept description

Wikipedia defines path dependence as an explanation of “how the set of decisions one faces for any given circumstance is limited by the decisions one has made in the past or by the events that one has experienced, even though past circumstances may no longer be relevant.

The Financial Times Lexicon notes (reference below), :

“… history matters for current decision-making situations and has a strong influence on strategic planning. Competences that have been built in the past define the option range for today’s moves. New business opportunities, in particular those based on technological progress, emerge gradually as a consequence of competencies acquired prior to new discoveries and over time.

Investopedia notes that:

“This holds true even if newer, more efficient products or practices are available due to the previous commitment made. Path dependency occurs because it is often easier or more cost effective to simply continue along an already set path than to create an entirely new one. … A well-known example is the QWERTY layout for typewriters. Despite the fact that different keyboard layouts in modern computer keyboards would allow faster typing, the QWERTY layout prevails. Due to the network effect (network externalities) the layout seems immutable.”

Atlas topic, subject, and course

Problem Definition and Agenda Setting (core topic) in Policy Analysis and Process and Atlas101.


Wikipedia, Path dependence, at, accessed 2 December 2018.

Investopedia, Path Dependency, at, accessed 2 December 2018.

Financial Times Lexicon, Definition of Path Dependence, at, accessed 2 December 2018.

Page created by: Alec Wreford and Ian Clark, last modified 2 December 2018.

Image: MBN, What is path dependence?, at, accessed 2 December 2018.