New Institutional Economics Research Articles

Economic Efficiency and Ethics

In neo-classical welfare economics efficiency and equity are strictly separated. The emergence of New Institutional Economics (NIE) broadens the perspective by focusing on the implications of opportunist behaviour. In NIE emphasis is put on institutional arrangements that improve efficiency. The introduction of opportunist behaviour points at the more general problem of cooperation. As can be illustrated by invoking the Prisoners' Dilemma, cooperation may improve efficiency. Therefore, social norms matter and the question arises how they evolve. Evolutionary game theory shows how economic success may change behavioural dispositions to honesty or dishonesty. On a less abstract level one can investigate whether or not the market system fosters nice social traits. Apart from the approach chosen, the main message is that economics and ethics are strongly intertwined.

New Institutional Economics in the Post‐Socialist Transformation Debate

The paper suggests that there is a tension between the basic tenant of New Institutional Economics (NIE) and the manner in which it has been applied in the debate on post‐socialist transformation. This tension is explored in the context of four main perspectives on NIE: (i) property rights, (ii) transaction costs economics, (iii) new economic history, and (iv) evolutionary economics. There are two main arguments. The first is that the transformation phase should be seen as ‘open‐ended’ rather than a ‘closed process’ where the ‘pure market’ is the inevitable end result. The second is that, although the NIE literature touches on most of the issues which are relevant to post‐socialist transformation, the insights that it offers are still too general for policy guidance.

Water scarcity, property regimes and irrigation management in Sonjo, Tanzania

This article explores the dynamics of property rights in irrigation water in Sonjo, Tanzania. It analyses an unsuccessful attempt by the ruling political group to change the institutional arrangements of water control, to serve better their private goals. This example shows that not all internal institutional innovations in the field of utilising natural resources lead to increased efficiency of the system from the point of view of the whole community. We draw on New Institutional Economics (NIE) and Common Property Resource Management (CPRM) theory to analyse the way in which it was possible that those few within Sonjo society who are formally/nominally ‘the owners’ of water sought to privatise de facto collective use rights of all community members. We consider why this was done in some, but not all, Sonjo communities, and we describe why this process has eventually failed.

Tying Meets the New Institutional Economics: Farewell to the Chimera of Forcing

Antitrust law's traditional hostility toward tying contracts was premised upon a belief that all such contracts are the result of coercive that is, the use of market power to compel acceptance of the agreement. Current law, while not as hostile as the traditional approach, still presumes that, where a seller possesses market power, any tying contract it obtains results from an exercise of that power. This article demonstrates that the economic premises underlying the traditional approach, as well as that of current law, are false. The New Institutional Economics (N.I.E.) suggests that tying contracts are often designed to reallocate property rights so as to avoid market failures that would result if the purchaser chose which products to employ in conjunction with the tying product. Such contracts are formed through a contracting process that is unrelated to forcing, even if the seller possesses market power. Thus, the per se doctrine -- in its traditional or current form -- must be abandoned. Unlike the Chicago School critique of tying doctrine, the approach offered here takes as a given traditional normative premises about the goals of antitrust law, in particular, the assumption that coercion in the form of forcing should be condemned in its own right. Despite this assumption, N.I.E.'s analysis of tying contracts still counsels a retreat from the current version of the per se rule, which rests upon the illogical presumption that all tying contracts drafted by firms with market power constitute forcing.

Is a Transaction a Transaction?

(1996). Is a Transaction a Transaction? Journal of Economic Issues: Vol. 30, No. 2, pp. 413-425.

Institutions and the Significance of Relative Prices

Douglass North's recent work traverses much of the gulf that separates so-called old institutional economics (OIE) and new institutional economics (NIE). To elaborate this assertion, I focus on the particular issue of the significance of relative prices. To do so, I will briefly review the OIE case against the prevalent presumption that price equals value. Thereafter, I will consider aspects of North's work that seem to have a bearing on the issue of the significance of relative prices and by extension on the question of the relation of OIE and NIE.

Tigers are bound and monkeys are free: A comparative study of state-owned and township/village-owned enterprises in China

Why is it that the shape and success of economic reform have varied across different industrial enterprises in China since the late 1970s? Why have collectively-owned enterprises, especially township/village-owned enterprises, developed rapidly while state-owned enterprises have suffered severe troubles in the past decade? By combining sociological theories of organization and the new institutional economics, the present study argues that changing institutional arrangements for industrial enterprises is the key factor in explaining the differences between state-owned and township/village-owned enterprises. This study is based on governmental policy documents and a nationwide survey data set on industrial enterprises that spans different regions, ownership structures, and management systems in China (750 industrial enterprises). The purpose of the study is to evaluate how governmental policies as the institutional environment affect management systems in Chinese industrial enterprises. This research not only extends knowledge of the relationship between environments and organizations, but also has significant policy implications.

The University as an Economic Institution: The Political Economy of the Althoff System

Friedrich Althoff (1839‐1908), who created the “Althoff system”, has had a singularly important influence on shaping academic institutions in Germany for almost a generation. As a close collaborator of leading German scholars his influence lasted almost throughout the second empire (1882‐1907). He has been described as brilliant by some and disastrous by others. Recent advances in the new institutional economics and the economic analysis of the organization of inquiry, as well as better access to the archival materials, have created the possibility of arriving at a clearer picture of the Althoff system. Is a first attempt at an economic analysis of the Althoff system; therefore should be viewed as an exploratory essay. In particular, addresses three questions: What precisely was the Althoff system? How can we go about analysing the system? How did the system function and perform? The essay has five substantive parts: first, offers a brief introduction to science research as it is currently practised in economics; second, introduces the historical record and the main criticism levelled against the system and offers a stylized description of the Althoff system in terms of emphasizing key features; third, subjects the stylized features of the system to economic analysis, relying heavily on the property rights theory of the firm and treating the university as an economic institution; fourth, takes a slightly different approach by applying Gordon Tullock′s analysis of the organization of inquiry to the Althoff system; fifth, offers a summary of the findings and an economic definition of the Althoff system.

Land use systems and property rights

Two lines of reasoning on very long term socio-economic change, which was a basic issue of classical economic thinking, are confronted: New Institutional Economics (NIE) and Evolutionary Economics (EE). It is demonstrated that EE offers an explanation which is both more consistent and more comprehensive. The case in point is the first economic revolution.

Homesteading and Property Rights; Or, "How the West Was Really Won"

Homesteading and Property Rights; Or, "How the West Was Really Won"

The New Institutional Economics and its applicability to development

The several remarkable developments in the social sciences which have come to be known as the New Institutional Economics (NIE) have not yet been fully exploited for analyzing the determinants and effects of institutional change in the context of development. This paper identifies two important components of the NIE and illustrates both (a) potential complementarities between them and (b) their applicability to various problems and policies in the long-term development of developing countries.

COMMODIFICATION OF LABOR FOLLOWS COMMODIFICATION OF THE FIRM ON A THEOREM OF THE NEW INSTITUTIONAL ECONOMICS*

Annals of Public and Cooperative EconomicsVolume 60, Issue 2 p. 161-179 COMMODIFICATION OF LABOR FOLLOWS COMMODIFICATION OF THE FIRM ON A THEOREM OF THE NEW INSTITUTIONAL ECONOMICS* Louis PUTTERMAN, Louis PUTTERMAN Department of Economics Brown UniversitySearch for more papers by this author Louis PUTTERMAN, Louis PUTTERMAN Department of Economics Brown UniversitySearch for more papers by this author First published: April 1989 https://doi.org/10.1111/j.1467-8292.1989.tb01999.xCitations: 3 * Revised version of a paper, by the same title, presented at the annual meetings of the Allied Social Science Associations, Chicago, December 28, 1987. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Citing Literature Volume60, Issue2April 1989Pages 161-179 RelatedInformation

Los trasplantes institucionales en el campo del derecho. Una nueva perspectiva para la nueva economía institucional

La Nueva Economía Institucional (NEI) comenzó recientemente a plantearse la utilidad de los trasplantes institucionales como medio para promover el crecimiento económico. Sin embargo, pronto se dieron cuenta de que estos trasplantes en general fallaban debido al problema del path dependence, que provocaba el choque de la institución formal trasplantada con las instituciones informales de la sociedad receptora. ¿Son estos trasplantes institucionales algo nuevo o, por el contrario, son un fenómeno importado de otra disciplina? En este artículo analizamos el origen de los trasplantes, aportando una visión enteramente jurídica del tema a través de los trabajos de los principales juristas que han estudiado esta materia en el campo del Derecho –especialmente dentro del Derecho comparado–.