Understanding Capitalism v6.3 — Understanding Institutional Drift and Coherence Degradation Mechanisms —

Author: Y. Seo (@momotarou / Japan)Role: Metanist — Human × AI Understanding ArchitectAI Collaboration: AI Understanding SupportORCID iD: https://orcid.org/0009-0005-7669-0612 Abstract This paper introduces the framework of Understanding Institutional Drift, extending Understanding Governance Structures and Understanding Market Dynamics by examining how institutions gradually diverge from coherence-preserving functions under complexity and acceleration pressures. While institutional theory traditionally interprets drift as misalignment between rules and environments, the proposed framework argues that drift may fundamentally represent coherence degradation processes arising from cognitive overload accumulation, interpretive fragmentation, and stability trade-off distortions. Institutional failure may not require disruption. It may emerge through slow coherence erosion. 1. Institutional Stability Reconsidered Institutions are commonly treated as stabilizing mechanisms. However, stability functions depend on: Cognitive compatibility Coherence reinforcement capacity Interpretive continuity support Stability is conditional, not intrinsic. 2. Defining Institutional Drift Understanding Institutional Drift refers to: Gradual structural divergence in which institutions lose coherence-preserving properties while maintaining formal operational continuity. Functionality masks degradation. 3. Drift-Inducing Mechanisms Drift may arise through: Complexity accumulation without cognitive adaptation Efficiency optimization overriding coherence stability Cognitive load externalization Attention fragmentation amplification Recovery cycle compression Misalignment compounds incrementally. 4. Coherence Degradation Dynamics Drift produces: Interpretive instability Coordination friction Context discontinuity Trust volatility Failure manifests probabilistically. 5. AI Systems and Drift Acceleration AI systems may unintentionally amplify drift by: Increasing systemic velocity Prioritizing short-term optimization signals Masking cognitive strain through automation Reshaping decision boundaries Acceleration may conceal fragility. 6. Drift Without Crisis The framework suggests: Institutions may degrade coherence without visible crisis events, generating latent instability reservoirs. Collapse potential accumulates invisibly. Conclusion Understanding Institutional Drift reframes institutional evolution as coherence maintenance challenges under cognitive constraints. Institutional resilience may depend less on regulatory rigidity and more on preserving understanding sustainability and interpretive stability. ※ Series Declaration This work is part of the Understanding Capitalism series. The series explores value formation, cognitive mediation, and structural transformations of economic perception.