|
New institutional economics (NIE) may be characterized as a new perspective in economics. Scholars doing research under the NIE perspective share a common purpose to extend economics by focusing on the social and legal rules that underly economic activity. Although NIE has its roots in Ronald Coase's fundamental insights about the critical role of institutional frameworks and transaction costs for economic performance, at present NIE analyses are built on a more complex set of methodological principles and criteria. They now depart from both mainstream Neoclassical economics and "old" institutional economics, though authors often care about both efficiency and distribution issues. Ronald Coase (born December 29, 1910) is a British economist. ...
In economics and related disciplines, a transaction cost is a cost incurred in making an economic exchange. ...
Institutional economics focuses on understanding the role of human-made institutions in shaping economic behavior. ...
Among the many concepts/aspects that are often taken into account in current NIE analyses these can be mentioned: organizational arrangements, transaction costs, credible commitments, modes of governance, persuasive abilities, social norms, ideological values, decisive perceptions, gained control, enforcement mechanism, assets specificity, human assets, social capital, asymmetric information, strategic behavior, bounded rationality, opportunism, adverse selection, moral hazard, contractual safeguards, surrounding uncertainty, monitoring costs, incentives to collude, hierarchical structures, bargaining strength, etc, etc.
Major scholars associated with this school include Ronald Coase, Douglass North, Oliver Williamson, Claude Menard and Thrainn Eggertsson, to mention but a few. All they run an association founded in 1997 that is called International Society for New Institutional Economics. Ronald Coase (born December 29, 1910) is a British economist. ...
Douglass Cecil North (born November 5, 1920) is co-recipient of the 1993 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. ...
Oliver E. Williamson (born September 27, 1932) is a prominent author in the area of transaction cost economics, a student of Ronald Coase and Herbert Simon. ...
Origins and definition As is well-known, Ronald Coase is one of the NIE founders, and his classic works are inevitable NIE references, together with the contributions of the property-rights theory in the sixties and seventies .
However, it was through the articles and books published over the 1980s and 1990s that a more complete and coherent set of central core concepts, assumptions and criteria could in fact be gathered from the many self-labeled NIE contributions of the time. It was particularly so since the international seminar series on the New Institutional Economics began in 1983 and these debates were published in the Journal of Institutional and Theoretical Economics.
In 1997, when the International Society for the New Institutional Economics (ISNIE) was launched, a long way had already been traveled by those hundreds of scholars who participated in the inaugural ISNIE meeting. Ronald Coase and Douglass North had already received the Nobel prize award.
Of course, those events already belong to the NIE-ISNIE history. Historic are also those initial contributions mentioned in which transaction costs, property rights and few more concepts were combined in an attempt to just solve some limitations of standard neoclassical reasoning. As North (2005), Menard (2004), Menard and Shirley (2005), Eggertsson (2005), Toboso and Arias (2006) (see references below) and others make it easy to check, most analyses are now built on a much more comprehensive approach.
At the early nineties Erik Furubotn already was able to envisage the evolution in approach that was going to take place. He wrote that the future theoretical developments would likely be “in the direction of a more flexible and comprehensive political economy approach”. And it has turned out to be so concerning the analyses of transactions people take at different institutional frameworks. This is also the case concerning the articles that follow.
Institutional Levels Although no single, universally accepted set of definitions has been developed, most scholars doing research under the NIE methodological principles and criteria follow Douglass North's demarcation between institutions and organizations. institutions are the "rules of the game", consisting of both the formal legal rules and the informal social norms that govern individual behavior and structure social interactions (institutional frameworks). Douglass Cecil North (born November 5, 1920) is co-recipient of the 1993 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. ...
Institutions are structures and mechanisms of social order and cooperation governing the behavior of two or more individuals. ...
Organizations, by contrast, are those groups of people and the governance arrangements they create to coordinate their team action against other teams performing also as organizations. Firms, Universities, clubs, medical associations, unions, etc. are some examples. Alternative meaning: Organisation (band). ...
Because some institutional frameworks are realities always "nested" inside other broader institutional frameworks, this clear demarcation is always blurred in actual situations. A case in point is an University. When the average quality of its teaching services must be evaluated, for example, an University may be approached as an organization with its people, physical capital, the general governing rules common to all that were passed by the University governing bodies, etc. However, if the task consists of evaluating people's performace in a specific teaching department, for example, along with their own made internal formal and informal rules, then the University as a whole enters the picture as an institution. General University rules, then, form part of the broader institutional framework influencing people's performance at the said teaching deparment.
This is why scholars usually divide institutional frameworks into several levels.
- Level 1 consists of embedded informal institutions; these include traditions, customs, values and religion. These institutions arise spontaneously over a long period of time and are very slow to change. North asks, “What is it about informal constraints that gives them such a pervasive influence upon the long run character of economies?” The answer is unknown but many lower level institutions are designed to protect Level 1 institutions.
- Level 2 is where formal rules (legal rules) are created, for instance, Constitutions and General Laws defining the rules of the game. Major changes at this level are rare but are often preceded by major upheavals such as the Civil War or the American Revolution. Marginal legislative reforms are frequent however.
- Level 3 is the level of governance when more detailed organizational rules exit. Level 3 is also the level at which the game is played. Cooperation and conflict, exchange and bargaining, efficiency and distributive issues enter here into the equation. These organizational rules usually serve to falicitate the resolution of conflicts and realize mutual gains by at least a significant part of participants in each arena. Attempts to collectively reform this governance structures are also frequent.
Further Reading - Oliver E. Williamson (September, 2000). "The New Institutional Economics: Taking Stock, Looking Ahead" Journal of Economic Literature, vol. 38, pp. 595-613.
- North, Douglass C. (1993 working paper). "New Institutional Economics and Development".
- North, Douglass C. (1997). "Understanding Economic Change", in Transforming Post-Communist Political Economies, Joan M. Nelson, Charles Tilly and Lee Walker, eds., Washington D. C.: National Academy Press. pp. 13-18.
- Eggertsson, T. (2005). "Imperfect Institutions. Opportunities and Limits of Reform". University of Michigan Press.
- Menard, Cl. (Ed.) (2004), "The International Library of the New Institutional Economics" (7 vols.). Edwar Elgar, Cheltenham.
- Menard C. and Shirley, M. (eds.) (2005). "Handbook of New Institutional Economics". Edwar Elgar, Cheltenham.
- North, D.C. (2005). "Understanding the Process of Institutional Change". Princeton University Press.
- Toboso, F. (2001). "Institutional Individualism and Institutional Change: the Search For a Middle Way Mode of Explanation", Cambridge Journal of Economics, vol. 25, n.6, November, pp. 765-784.
- Toboso, F. and Arias, X.C. (eds.) (2006). "Organizing Governments and Markets. Some Case Studies from a NIE Perpective". PUV-Universitat de València, (Edited jointly with the Universidad de Vigo). (In Spanish)
// Balancing scales are symbolic of how law mediates peoples interests For other senses of this word, see Law (disambiguation). ...
Image File history File links Scale_of_justice. ...
// Balancing scales are symbolic of how law mediates peoples interests For other senses of this word, see Law (disambiguation). ...
A contract is a legally binding exchange of promises or agreement between parties. ...
// Tort is a legal term that means civil wrong, as opposed to a criminal wrong. ...
The Law of Obligations is one of the component elements of the civil law system of law and encompasses contractual obligations, quasi-contractual obligations such as unjust enrichment and extra-contractual obligations. ...
Property designates those real or intellectual goods that are commonly recognized as being the rightful possessions of a person or group. ...
The term trust has several meanings: In sociology, trust is willing acceptance of one persons power to affect another. ...
Constitutional law is the study of foundational laws that govern the scope of powers and authority of various bodies in relation to the creation and execution of other laws by a government. ...
Administrative law (or regulatory law) is the body of law that arises from the activities of administrative agencies of government. ...
Criminal law (also known as penal law) is the body of statutory and common law that deals with crime and the legal punishment of criminal offenses. ...
International law deals with the relationships between states, or between persons or entities in different states. ...
Conflict of laws, or private international law, or international private law is that branch of international law and interstate law that regulates all lawsuits involving a foreign law element, where a difference in result will occur depending on which laws are applied as the lex causae. ...
The European Union is unique among international organisations in having a complex and highly developed system of internal law which has direct effect within the legal systems of its member states. ...
// Balancing scales are symbolic of how law mediates peoples interests For other senses of this word, see Law (disambiguation). ...
Commercial law or business law is the body of law which governs business and commerce and is often considered to be a branch of civil law and deals both with issues of private law and public law. ...
Corporations law or corporate law is the law concerning the creation and regulation of corporations. ...
In law, intellectual property (IP) is an umbrella term for various legal entitlements which attach to certain types of information, ideas, or other intangibles in their expressed form. ...
The following analysis is based on English law. ...
Restitution is the name given to a form of legal relief in which the plaintiff recovers something from the defendant that belongs, or should belong, to the plaintiff. ...
Tax law is the codified system of laws that describes government levies on economic transactions, commonly called taxes. ...
The examples and perspective in this article or section may not represent a worldwide view. ...
It has been suggested that this article or section be merged with antitrust. ...
Consumer protection is government regulation to protect the interests of consumers, for example by requiring businesses to disclose detailed information about products, particularly in areas where safety or public health is an issue, such as food. ...
Environmental law is a body of law, which is a system of complex and interlocking statutes, common law, treaties, conventions, regulations and policies which seeks to protect the natural environment which may be affected, impacted or endangered by human activities. ...
Public services is a term usually used to mean services provided by government to its citizens, either directly (through the public sector) or by financing private provision of services. ...
This article is in need of attention. ...
Human rights law is a system of laws, both domestic and international which is intended to promote human rights. ...
Nationality law is the branch of a countrys legal system wherein legislation, custom and court precendent combine to define the ways in which that countrys nationality and citizenship are transmitted, acquired or lost. ...
Social security primarily refers to a field of social welfare concerned with social protection, or protection against socially recognized conditions, including poverty, old age, disability, unemployment, families with children and others. ...
Family Law was a television drama starring Kathleen Quinlan as a divorced lawyer who attempted to start her own law firm after her lawyer husband took all their old clients. ...
The law of evidence governs the use of testimony (e. ...
This article concerns the common-law legal system, as contrasted with the civil law legal system; for other meanings of the term, within the field of law, see common law (disambiguation). ...
Civil law is the predominant system of law in the world, with its origins in Roman law, and sets out a comprehensive system of rules, usually codified, that are applied and interpreted by judges. ...
In the religious sense, law can be thought of as the ordering principle of reality; knowledge as revealed by God defining and governing all human affairs. ...
In law, custom, or customary law consists of established patterns of behaviour that can be objectively verified within a particular social setting. ...
Socialist law is the official name of the legal system used in Communist states. ...
To meet Wikipedias quality standards, this article or section may require cleanup. ...
This article is about law in society. ...
...
In Egyptian mythology, Maàt was the goddess of truth, justice and order as well as a word referring to those concepts she represents. ...
The material for the study of Babylonian law is singularly extensive. ...
Roman law is the legal system of ancient Rome. ...
The Arthashastra (more precisely ArthaÅ›Ästra) is a treatise on statecraft and economic policy which identifies its author by the names Kauá¹ilya[1] and Viṣṇugupta,[2] who are traditionally identified with the Mauryan minister CÄṇakya. ...
Magna Carta Magna Carta (Latin for Great Charter, literally Great Paper), also called Magna Carta Libertatum (Great Charter of Freedoms), is an English charter originally issued in 1215. ...
Jurisprudence is the theory and philosophy of law. ...
Legal positivism is a school of thought in jurisprudence and the philosophy of law. ...
Natural law (Latin jus naturale) is law that exists independently of the positive law of a given political order, society or nation-state. ...
Legal formalism is a Positivist view in jurisprudence and the philosophy of law. ...
The study of feminist legal theory is a school thought based on the common view that laws treatment of women in relation to men has not been equal nor fair. ...
Critical legal studies refers to a movement in legal thought that applied methods similar to those of critical theory (the Frankfurt School) to law. ...
Law and economics, or Economic analysis of law, is the term usually applied to an approach to legal theory that incorporates methods and ideas borrowed from the discipline of economics. ...
// Balancing scales are symbolic of how law mediates peoples interests For other senses of this word, see Law (disambiguation). ...
In law, the judiciary or judicature is the system of courts which administer justice in the name of the sovereign or state, and provide a mechanism for the resolution of disputes. ...
A legislature is a type of representative deliberative assembly with the power to adopt laws. ...
The Politics series Politics Portal This box: Bureaucracy is a concept in sociology and political science referring to the way that the administrative execution and enforcement of legal rules are socially organized. ...
Civil society or civil institutions refers to the totality of voluntary civic and social organizations or institutions which form the basis of a functioning society as opposed to the force backed structures of a state (regardless of that states political system). ...
A lawyer is a person licensed by the state to advise clients in legal matters and represent them in courts of law and in other forms of dispute resolution. ...
External links |
Feeds |
Contact