Institutional Economics Approach Research Articles

Local Leaders’ Promotion Pressure and Tourism Development: Evidence From China

The growing importance of tourism management within local governance highlights the imperative role of local leaders’ involvement. However, the understudied influence of promotion pressure, a key determinant of their behavior, remains largely unexplored. This study employs a novel institutional economics approach to investigate the impact of local leaders’ promotion pressure on tourism development in China. We analyze data from 334 prefecture-level cities spanning 1999 to 2019. Our findings reveal a positive correlation between promotion pressure and tourism development. Notably, this effect is amplified in economically advanced cities and those with a lower dependence on tourism. Further analysis using an instrumental variable-based mediation model suggests that promotion pressure shapes tourism development by influencing the structure of local government fiscal expenditure. These findings shed light on the intricate interplay between political incentives, fiscal policy, and the evolution of the tourism industry, offering valuable insights for crafting effective tourism governance strategies.

Governance of the circular economy in the canned fish industry: A case study from Spain

Spain is the leading country in production, 305,403 tons in 2022, of canned fish in Europe. Part of its success is because this industry is one of the leading sectors in innovation and technology transfer within the agri-food chain in Spain. At the beginning of the 21st century, its research center created a line of product valorization, the seed of current research on circular economy. This article aims to analyze, from the New Institutional Economics (NIE) approach, the process of institutional change and the evolution of the Spanish canned fish sector. The evolution of the legal framework, as well as the internal organization of the sector and its strategies, have modified the governance relationships, altering the incentives and transaction costs of the industry actors. The results show the existence of two distinct stages, 2007–2015 and 2016–2022. In the first stage, most of the research projects were regional in nature and institutional relations were more limited. In the second stage, the creation of a solid legal framework together with the inauguration of a new research center, the incorporation of new equipment, the increase in the number of partners and the increase in relations with agents in the sector reinforced the implementation of the circular economy in the canning industry. In both periods, the high degree of associationism in the Spanish canned fish industry is key to creating economies of scale, increasing public and private collaborations and participating in research projects.

An institutional economics approach to data spaces as data market intermediaries

An institutional economics approach to data spaces as data market intermediaries

Ability of Agriculture in ANCs in Poland and Other EU Countries to Reconcile the Income Function with the Protection of the Natural Environment

A necessary condition for agriculture to provide environmental public goods at the level desired by the society is the existence and compliance with appropriate “rules of the game” (institutions). Undoubtedly, institutions are of fundamental importance for agriculture in areas with natural or other specific constraints (ANCs), the new delimitation of which was recommended by the European Commission to all EU member states under the CAP 2014–2020 and which is valid under the CAP 2023–2027. The aim of the study is to indicate the role of institutions in the new institutional economics (NIE) approach in the context of supporting agriculture in ANCs. The specific goals consist of indicating a method for determining the current ANCs in the EU, including Poland; characterizing their current state in Poland, as compared to other EU countries; determining their role in the implementation of the agri-environment-climate (AECM) and organic farming measure under the EU CAP (they are particularly predestined to provide environmental public goods) and also specify the determinants encouraging farmers in ANCs to participate in these measures; assessing the production and economic situation of agriculture in these areas in individual EU countries. The data source was data from the Institute of Soil Science and Plant Cultivation—State Research Institute in Puławy and the Institute of Agricultural and Food Economics—National Research Institute, Agency for Restructuring and Modernization of Agriculture, European Commission FADN—FSDN. Descriptive methods were used to analyze and present the materials. Tabular graphic logistic regression model, the Wald test, the Cox–Snell pseudo-R2 measure and its additional variant proposed by Nagelkerke were used. The study is intended to fill the research gap regarding the determination of the ability of agriculture in ANCs to reconcile the market function, which is reflected in its economic situation, with the provision of environmental public goods to the society. It was determined that in communes with a high saturation of lowland ANCs, farms achieving worse production results in the form of lower wheat yields and lower net income calculated without subsidies per 1 ha of utilized agricultural area (UAA) had a greater tendency to implement AECM and organic farming measure. In most EU countries, agriculture in ANCs is characterized by extensification of agricultural production compared to other agriculture. It generally incurs lower costs and, as a result, obtains lower production effects and income from agricultural activities per 1 ha of UAA. The study provides arguments supporting the thesis that for agriculture in ANCs to achieve satisfactory economic effects and at the same time be able to provide the public with environmental public goods to a wide extent, it is necessary to have public financial incentives in the form of subsidies from the EU CAP.

The Institutional Dimension of Public-Private Partnerships: Governance

Failure to realize governance objectives is considered to be one of the reasons why public-private partnerships have become increasingly controversial and why there have been many negative experiences during the project process. This study examines the relationship between public-private partnerships and governance. In the framework pioneered by international organizations and accepted in the literature, it is possible to eliminate many problems experienced in public-private partnership projects by implementing governance principles. On the other hand, although there are many discussions in the literature on the conceptual basis of governance, there are no studies that address these conceptual debates within the framework of public-private partnerships. It is thought that this deficiency in the literature will also leave the discussions on the present and future of the relationship between public-private partnerships and governance incomplete. The originality of this study is that it evaluates the concept of governance in public-private partnerships and its foundations based on the New Institutional Economics and New Public Management approaches. When the concept is considered together with its foundations, the question of whether governance principles can really be a solution to the problems of public-private partnerships becomes controversial. Although the focus of the study is not on this debate, it aims to open the door to further discussions on the subject.

The power of wind: The global wind energy industry's successes and failures

The global shift to renewable energy is imperative for preventing catastrophic climate change, and wind energy is playing a leading role in meeting emissions reduction targets under the 2015 Paris Agreement. Wind is one of the fastest growing, most competitive, and least harmful of the renewable energy technologies. Using an Original Institutional Economics (OIE) approach to examine real world developments, we argue that the global wind energy industry is increasingly volatile and concentrated, with implications for future growth and the trajectory for decarbonization. Moreover, OIE recognizes markets as social constructions that hold specific values, from which we argue that wind energy is operating within “first generation” electricity markets that favour conventional energy. This could further undermine the necessary investment and continued growth of wind energy, while continuing to overlook other positive social benefits wind provides. Like ecological economics, OIE remains sceptical that markets can fully capture the value of wind energy even if they internalise these costs. This has significant implications for the future trajectory of wind energy compared with both traditional and new energy technologies and underscores the limits of market mechanisms for a sustainable energy transition.

Uranium Price Expectations and Stabilization Policy Formation in the Manhattan Project: An Institutional Economics Approach

Abstract Governments, and uranium producers and buyers assess policy implications for uranium markets by understanding the price of uranium and the role of government policy over time. To understand the key elements in the formation of price and policy in uranium markets, this study uses the institutional economics method to investigate the institutional arrangements used for procuring uranium in the Manhattan Project (1942–1946). Throughout this period, the formation of price expectations was bounded by the opportunities to receive revenue from selling uranium ore as a by-product and as a main product. In regards to policy formation, price expectations were guided by the need to secure ore for customers, to secure income stability for producers, and to maintain competitive conditions in establishing price stabilization as the main policy. Similar pricing rules and concerns with price stabilization were adopted throughout the uranium market history. These recurring similarities in customs, which are understood through the underlying competitive behavior, are expected to be adapted to contemporary trends, such as global climate change, the joint ownership of mines, and the creation of the Low Enriched Uranium Bank. The contemporary trends represent the new negotiating circumstances for uranium market participants. Therefore, elements in understanding the formation of pricing and price stabilization policy during the Manhattan Project may be adapted to frame future assessments of uranium markets as participants consider advanced nuclear reactors and various nuclear fuel cycles as an option in adapting to contemporary trends.

The new institutional economic approach to land development game: Integrating transaction cost and efficient institutional framework in synergic urban land use-transport development model

Land and property development process includes a series of multifaceted activities ranging from purchasing to converting it for development purposes and everything in between. The process itself encompasses multiple stakeholders, drivers, and contributions from diversified public and private actors and transaction cost arises out of their complex interaction. Transaction costs incurred during any kind of human interaction (i.e., transactions). Every actor involved in the process wishes to maximize his achievement under various constraints and hence institutional arrangement (i.e., set of humanly devised rules to administer the constraints) is necessary for efficient management of the development process. Therefore, to devise an optimum outcome out of economic and social transactions in the property development process, cooperative and competitive relationships between individuals should be understood from a broader socio-political and governance structure. In this research, it is critically argued that the land and property development process should implicate a multifaceted set of formal and informal rules or institutional arrangements to govern the intrinsic interaction, action and thereby reducing the related transaction cost. The central argument is further reproachfully evaluated and implicated in the urban development process through the myopic lens of the Transit-oriented development (TOD) pathway. A vigilant combination of descriptive and explanatory research approaches is adopted to analyze the connection between theory and practice.

Multilevel governance, PV solar energy, and entrepreneurship: the generation of green hydrogen as a fuel of renewable origin

In Spain, the institutional framework for photovoltaic energy production has experienced distinct stages. From 2007 to 2012, the feed-in-tariff system led to high annual growth rates of this renewable energy, but after the suppression of the policy of public subsidies, the sector stagnated. In recent years, green hydrogen, an innocuous gas in the atmosphere, has become a driving force that stimulates photovoltaic energy production. Since 2020, encouraged by the European energy strategies and corresponding funds, Spain has established a regulation to promote green hydrogen as a form of energy resource. Adopting the new institutional economics (NIE) approach, this article investigates the process of changing incentives for the energy business sector and its impact on photovoltaic energy production. The results show an increase in the number of both projects, approved or on approval, and companies involved in green hydrogen, that are planning to use photovoltaic energy in Spain, thus engendering the creation of a new photovoltaic business environment based on innovation and sustainability.

EVALUATION OF INTER-COUNTRY INSTITUTIONAL QUALITY DIFFERENCES IN TERMS OF DEVELOPMENT IN COREPERIPHERY RELATIONS

Institutional economics approach reveals that institutions are essential in increasing social welfare by
 comprehensively addressing social and economic life. At the same time, institutional economics approach
 proceeds similarly to the problems discussed in the development literature. This study evaluates the
 developmental differences between countries in core, semi-periphery and periphery countries according to
 institutional quality differences. In the first part of the analysis, the core (upper and lower), semi-periphery
 (upper, middle and lower) and periphery (upper, middle, and lower) country groups were determined by
 the club convergence method using the data between 1990 and 2017. The second part of the analysis tests
 the institutional approach that explains the development differences between countries for eight country
 groups. Findings have revealed the effect of economic freedom on development in all subgroups of core,
 semi-periphery, and peripheral countries. In addition, while the effect of democracy on development has
 an increasing effect in core and semi-periphery country groups, the results in peripheral countries are
 found statistically insignificant.

Self-Efficacy as a Mediator of the Impact of Social Capital on Entrepreneurial Orientation: A Case of Dayak Ethnic Entrepreneurship

Amid global disruptions caused by the COVID-19 pandemic, entrepreneurship is more important than ever before, believed to be a key driver of economic development and recovery as well as poverty alleviation. However, although research on entrepreneurial benefits is becoming well-established, our understanding of the effects of specific social processes on entrepreneurial orientation is fairly limited. The research gap is even larger in an ethnic entrepreneurship setting. This study, therefore, aims to understand the impact of social capital on entrepreneurial orientation through self-efficacy in Dayak, the indigenous ethnic, non-Malay people of Borneo. Utilizing a survey, we found that social capital is positively related to entrepreneurial orientation, and self-efficacy was found to mediate this relationship. Kinship or regional ties among Dayak group members foster social capital in the form of trust, solidarity, and reciprocal obligations. However, although Dayaks are willing to learn and participate in economic activities, including becoming entrepreneurs, they are unlikely to take initiative due to both financial and non-financial obstacles. For these reasons, we suggest an institutional economic approach, designing a specific educational program to help improve the Dayak’s self-efficacy in escalating their entrepreneurship commitment. Local universities and vocational schools can develop an effective curriculum to tap the potential of Dayak in business and entrepreneurship.

Center and Periphery: An Original Institutional Economics Analysis of Raúl Prebisch’s Structuralism

ABSTRACT The present article focuses on Raúl Prebisch’s center and periphery framework, connecting his early, mid-career, and later work to cast a different light on one of his most enduring contributions. Using an original institutional economics approach, the article shows that Prebisch held a structuralist perspective throughout his career, but while early on he maintained a standard structuralist position, by the 1960s Prebisch embraced a less rigid version of structuralism, understanding the relationship between center and periphery through a multi-layered analysis. A movement in such direction enriches economic theory, creating a dynamic framework that views social, economic, and political transformation as a result of interactive actions (Lawson [1997]. Economics and Reality. London: Routledge) between agents and structures.

Indonesia's Honey Competition Strategy: A New Institutional Economics Analysis

Honey product is one type of product that provides many economic and health benefits so that it is in great demand by all citizens of the world, even animals. There is a gap between production and consumption globally so that every country competes to increase its production not only for domestic needs but also to meet world demand for honey products. There are still many honey producers whom individuals or families manage so that the volume produced is still minimal, either for own consumption or directly sold to consumers. To meet global honey needs, the interests of medium-large companies are essential but still empower honey producers or individual honey farmers. The study aims to maintain its commitment to quality and halalness and corporate analysis strategy following the new institutional economics approach. This study uses descriptive qualitative research using literature studies. The study results found that the company is very committed to product quality assurance and halalness and implementing the company's strategy at level 4 as new institutional economics, namely economic order 3 with resource efficiency, the formation of marginal prices and structures, and business sustainability.

Economic Crises and Women’s Experiences in the United States

In the intellectual tradition of Thorstein Veblen, the status of women (“woman’s place”) provides insight into the value systems dominant in society. This article asks what we learn about U.S. society when we examine economic crises through women’s experiences. This discussion focuses on the twenty-first century crises of the Great Recession and the COVID-19 recession, both of which were assigned gender pronouns—“Hecession” and “Shesession”—in popular discourse, reflecting in each case a particular pattern of gender differences (“gender gaps”) in unemployment rates. Taking a feminist institutional economics approach, this article briefly examines some key aspects of the experiences of women in these two crises, considering a broad range of demographic characteristics and indicators of well-being, over a timeframe that extends beyond the initial economic downturn. The article concludes with thoughts on what this means for our understanding of societal values and valuing.

Greek History

Free labour constitutes the largest black hole in ancient Greek economic and social history. The New Institutional Economics approaches that are currently so influential in Greek economic history focus on growth and transaction costs, but have largely ignored labour; it is not accidental that Bresson's monumental synthesis of ancient Greek economies has no chapter devoted to the issue. This is what makes the volume edited by Edmund Stewart, Edward Harris, and David Lewis on skilled labour and professionalism in ancient societies such an important contribution. The thirteen chapters explore three major issues. The first concerns the processes through which the division of labour and specialization created distinctions between unskilled and skilled labour. The second theme focuses on the major advantages that treasured skills offered to those individuals and groups that possessed them, and the ways in which individuals and states recruited and bargained with skilled labourers. The third is the extent to which it is possible to use the concept of professionalization to describe the process by which some ancient occupations came to constitute professions. The volume examines various case studies: while in some instances it is possible to describe such forms of skilled labour as professions (doctors, sculptors, musicians, actors), in other areas (athletes, soldiers) such a label is highly misleading. Particularly valuable in this respect is the exploration of the impact of various factors and processes on the extent of professionalization of different occupations.

An exploration of institutional approaches in pursuing sustainable development

The institutional setting within which consumption and production occurs has profound influence on preferences and forms of production, and substantially shapes resource throughput of economies, pollution and land use. Institutional economics is arguably the most important subdiscipline of economics in enabling an inter-disciplinary and systems approach to ensure sustainable economy solutions. The purpose and academic contribution of the paper is to conduct the first systematic review of existing institutional economics frameworks that can be applied to explore sustainable development. The scientific value added of the review is to draw out, cluster, compare and contrast: the focus, contribution, use and institutional approaches of studies, as well as sector applicability, aims of sustainable development addressed and key gaps. Results show that most frameworks can be classed as applying new institutional economics approaches (or similar) and focus on common property or social ecological systems. Most of these frameworks see institutions as rules and often have a strong focus on formal rules. Another key finding is that most frameworks address the environmental aim of sustainable development, but few address all three aims. There was also found to be a lack of frameworks with a foreground focus on the end consumer and downstream supply chains that drive resources use and environmental impact. Classical institutional economics is largely neglected by most frameworks, yet classical institutional economics can inform the cultural shift to more sustainable economies, because of its focus on a wider range of informal institutions.

Tax collection in the Roman Empire: a new institutional economics approach

This paper reviews the Roman tax collection system since the Late Republic to the Principality, focusing on the transition from the tax-farming system to a more centralized, census-based administration. We attempt to justify this transition according to New Institutional Economic theories (Transaction Cost Economics and Property Rights Theory). The paper argues that, during the Republic, the auction-based system of tax farming ended up giving place to opportunistic behaviors and abusing practices due to information asymmetries and contract incompleteness, enhanced by the collusion of tax farmers and governors. The Principality improved the efficiency of the tax collection system through the introduction of a bureaucratic and census-based administration, which allowed imperial employees to monitor the tax-farming activities.

Economics as the scientization of politics

This paper uses Beck's concept of reflexive modernity, and a Foucauldian approach, to critique the positivist philosophy associated with contemporary conventional economics, and to show its inadequacy for the environmental emergency. The paper suggests economics is not neutral but performs an ideological function in justifying the political and social order. Economics can be deconstructed by tracing its history, thereby laying bare its philosophical and political roots. The environmental debate repeats past debates of the 1920s and 30s. By employing the 'subjugated' institutional economics approaches economics can be redefined, and the path to a truly Green New Deal can be unearthed.

A Sustainable Tourism Based on a New Institutional Economics Approach: Ecotourism Based on the Community in the Gasan Gadang Fishermen Village

This study aimed to determine the patterns of development and implementation of community-based ecotourism management and identify the impact of the community-based ecotourism in Gasan Gadang Village on the economic, social, and environmental aspects of the surrounding community. The methodology used was descriptive analysis with a new institutional economics approach and the Kruskal-Wallis Test analysis. The patterns of development and implementation of community-based ecotourism management with all levels of social change analysis, including formal and informal rules such as culture, customs, habits of Gasan Gadang villagers, institutional and governance management, and even the economy, are considered good. The Community-based ecotourism management has adopted the theory of resource allocation among stakeholders of Gasan Gadang Village. The findings of this study showed that community-based ecotourism institutions and management bring positive impacts on economic, social, and culture. There was no significant difference among economic, social, and environmental impacts between the non-authorities and community-based ecotourism authorities of Gasan Gadang Village. Thus, it could be said that the benefits of community-based ecotourism received by the community were all the same. Everyone got positive benefits. However, based on the findings, it could be seen that the biggest difference was the economic impacts followed by the social impacts, while the smallest difference is the environmental impacts. From this situation, it could be concluded that the performance of community-based ecotourism authorities in Gasan Gadang Village was good and positively impacted the economic, social, and environmental aspects of the Gasan Gadang Village fishermen community.

Political structures and trust in markets: A comparative examination of consumer trust in 28 EU member states and the effects of consumer policy on trust

A central tenet of the New Economic Sociology is that trust is a central factor in the sound functioning of markets. Previous research has mainly used a national-scale network approach to argue that personal relations generate trust in market relations. In contrast, this article shows, from a comparative perspective, how political structures influence consumer trust. First, using aggregate data, it shows how consumer trust in markets varies across the 28 European Union (EU) member states. Second, it uses regression models to examine the effects of varying levels of political embeddedness on consumer trust, taking consumer policy as a proxy. The results support the view that it is not only personal relations that generate trust in market relations but also political structures. This argument echoes institutional economic sociological approaches, and it adds to them a trust dimension. It furthermore encourages a more finely grained comparative analysis to better account for the effects of social macrostructures on trust.