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How do countries create and replicate socio-economic success? This book argues that success comes from how people make sense of their institutions when they are placed under stress. When institutional frameworks are challenged, a range of agents engaged in sensemaking processes that invoke certain identities on 'who we are', contain normative claims about 'how things should be', and involve strategies on 'how to get there'. Sensemaking about the future and the past is crucial to institutional competitiveness and includes prospective and retrospective points of departure, as well as focusing on developing abstract causes of change or replicating success from previous experience. This book brings together a range of world-class scholars from Comparative Political Economy, Institutional Theory, and Organizational Sociology to discuss how sensemaking processes create institutional change. The contributors investigate a range of cases that cover different institutions linked to competitiveness, including labour, public management, think tanks, firms, innovation policies, tax and housing policies, and welfare systems. With a strong focus on the Nordic experience and comparisons with advanced industrialized economies, this volume provides an innovative and original framework for understanding institutional change.