The process of gradual abandonment of a declining productive model and of growing adoption of the new, is not readily perceived as such. The existing institutions take a long time to grasp the all-pervasiveness of the transformations taking place in more and more points of the economic system. Traditions, established routines and past successes with the usual practices make it difficult to capture the meaning and the threat of these successive changes as a source of institutional mismatches and problems. The new technologies are very visible indeed, as were mass production, plastics and the automobile in the 1920's and 1930's and as information technologies have been in recent times, but their consequences take a long time to reach public awareness. Even those who realize the importance of the technological and economic changes do not often connect them with necessary adaptations of their own space of influence or with a need for changes in their own behaviour.
        

Indeed, the social consequences of each transition are vast and profound, as is the human suffering. They involve widespread unemployment [21] ; the obsolescence of qualifications at all levels; the destruction of the livelihood of many; the geographic dislocation of people and activities; the growth of rapid wealth at one end and of growing poverty at the other, within each country and between regions and countries[22] . (See Figure 3-A)

The Transition Period: Socio-Political Impact of Centrifugal Trends

It is then that the social pressure for change is clearly felt; that the erstwhile effective recipes applied by governments and other institutions are revealed as powerless and that the need for a deep institutional renewal becomes more and more self-evident. But the necessary transformation is not easy nor can it happen quickly. There ensues an increasingly severe mismatch between a socio-institutional framework geared to supporting the deployment of the old paradigm and the new requirements of a techno-economic sphere brimming with change. Further still, the persistent application of the now obsolete practices, can actually aggravate the situation and contribute to a collapse (as was the case with the crash of 1929 and the ensuing crisis of the 1930's).

So, during paradigm transitions, there are very intense transformations in technology and the economy and a high level of inertia and confusion in the socio-institutional sphere. It is this difference in rhythm of change that leads to the decoupling which we hold is characteristic of the downswing decades of Kondratiev long waves. The upswing decades begin as structural coherence is reestablished, by means of vast socio-institutional innovations, in response to the requirements of the new paradigm and geared to facilitating the full transformation in the productive sphere.

Thus, long wave transitions are processes of "creative destruction," not only in the economy, as shown by Schumpeter, but also in the socio-institutional sphere. The problem is that, in such periods, institutions face a chaotic and unaccustomed situation, which requires much deeper changes than the great majority of their leaders and members had ever experienced. The difficulty is increased by the fact that there are no proven recipes and change has to take place by trial and error experimentation under the pressure of the very high social costs of the techno-economic transformation.
          

The example of the previous socio-institutional framework

Last time around, to overcome the great depression of the 1930's and to rebuild the economy after the war, it was necessary to surmount the prevailing notions about the superiority of free market mechanisms and accept the establishment of massive and systematic State intervention in the economy, generally following Keynesian principles. There is a very impressive list of institutional innovations which diffused widely in order to foster and regulate the growth of markets for mass production. At the national level, it goes from the direct manipulation of demand mechanisms through fiscal, monetary and public spending policies, to the official recognition of labor unions, collective bargaining and the establishment of a social security net, passing through the drastic reduction of the working week and year. Some of these innovations were made in the post-war period itself; some had existed before in some countries, for a short or long time. The important fact is that they were adopted almost everywhere, with all the variety resulting from vast differences in social, cultural, historical, political and other factors.

On the international level, these national arrangements were complemented by the economic, political and military hegemony of the United States in the West (holding the Cold War balance with the Soviet System), Bretton Woods, the United Nations with all its specialized agencies, the GATT, the Marshall Plan, the IMF, the World Bank, gradual decolonization and other institutions and measures, geared to facilitating the international movement of trade and investment, as well as to maintaining political stability.

Today, almost every one of these innovations, relatively effective and widely accepted until the 1970's, is under question. Some have already been partly or radically modified in one way or another. Indeed, a successful transition will depend on the establishment of new rules of the game, regulatory mechanisms and institutions, adapted to the new conditions. The process of institutional change has been underway nationally, locally and internationally with different visions and outlooks. Among the more coherent proposals there are some that make the explicit connection with the nature of the present wave of technical change[23] .