Institutionalism: on the rise or declining?

Abstract

The article examines the state of the modern institutional direction of analysis in economic science. The aim is to identify the main methodological problems of this trend of thought from the point of view of the formation of such a scientific direction as "institutional macroeconomics". The method of comparative review analysis of the most advanced sources that laid the basis for the methodology and implements it in institutional research shows the fundamental reasons for the limited possibilities of institutionalism in the formation of the transmission mechanism of economic policy. In this regard, the large volume of scientific research of the institutional school, reflecting, among other things, the scientific fashion and the need to take into account institutions as factors of development, nevertheless, does not speak in favor of the flourishing and significant success of this line of analysis; at the very least, there are inherent difficulties in the development of this trend in economics. The main directions of research of the institutional school associated with overcoming methodological limitations, in particular, the expansion of ideas about institutional efficiency, which cannot be reduced solely to saving on transaction costs, have been identified. Methodological disputes, enthusiasm for holism and rhetoric in relation to the necessary consistency, on the contrary, lead institutionalism away from solving even those methodological problems that lend themselves to solution. The article shows the key positions on the development of institutional macroeconomics, including through the concept of institutional inflation, reduced to the contribution of institutions to price dynamics. The high level of institutional diversity and institutional complexity make it very difficult to truly assess this contribution. At the same time, denying the influence of institutions on prices, especially in connection with the inherent inaccuracies of the model approach, also becomes an unreasonable technique, as well as criticizing model options that demonstrate the directions of scientific research on this issue. A condition is obtained that connects the change in the costs of functioning of institutions with the function that determines the dynamics of prices for the greatest effect of the functioning of the institutional system, determined by the difference between the total benefits and costs.