The Visible Hand of Economics: Institutional Chance Performance and Sustainable Institutional Development

Abstract

In this study, there is the analysis of the relationship between economic development and institutionalization process which enhances the institutional change performance of the economy and reduces operation costs. The change and regulation process, which is brought into the price mechanism by mainstream economics through invisible hand metaphor, is discussed within “visible hand” logic by property rights, transaction costs, and contracts economy approach in the NIE approach. By this way, institutions assume the visible hand role in the processes of regulation, preparation and implementation of common mandatory rules and laws in social life which are ignored by mainstream economics. The concept of institution is the product of an interdisciplinary approach providing organizational and behavioral connection between economic theory and economic institutions and giving the economics the lost opportunity to question the political economics.