New Economic Sociology and New Institutional Economics

Abstract

This paper deals with similarities and differences between new economic sociology (NES) and new institutional economics (NIE). We start with brief reports on the basic ideas of NES and NIE. Regarding the latter, we concentrate on NIE in the sense of Oliver Williamson who introduced the term and whose work became the main target of sociologists’ critique. We show that the contrast between the two fields is less sharp than some scientists might assume. We then present a review and assessment of the attack of seven sociologists on Oliver Williamson’s ideas. The sociologists are Perrow, Fligstein, Freeland, Granovetter, Bradach & Eccles, and Powell. Their battering ram social network theory is briefly described and an attempt made to combine network analysis with new institutional economics as understood by Williamson, i.e., his transaction cost economics. The paper is concluded with some thoughts on the convergence of NES and NIE.