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This study analyses the EU’s and China’s institutional change attempts towards the Circular Economy (CE) from an institutionalist perspective. The actors’ purpose seeking/instrumental and path-dependent institutional rationality highly affected their institutional change attempts. The increasing instability/inefficiency originating from the dialectical tension between economy and the environment in the linear economic system triggered the actors’ instrumental rationality to make an institutional change towards the CE. The instrumental rationality of the actors also favoured an incremental change. The EU’s functional and China’s piecemeal social engineering approaches emerged as a result of their different institutional structures. These findings suggest that the institutional rationality of global actors encourages them to initiate incremental (but not abrupt/radical) institutional changes. Therefore, global actors’ abrupt/brand-new responses to the worsening global environmental crisis are less possible. These findings also suggest that a heterogeneity-oriented institutionalist perspective might be useful in developing a better understanding of macro-level/global developments.

How to achieve an institutional change towards circular economy? A comparative case study on the EU and China