New Institutional Economics Research Articles

Spanish Healthcare Sector Management in the COVID-19 Crisis Under the Perspective of Austrian Economics and New-Institutional Economics.

This is a study of Political Economy, Law & Economics, and Public Choice, applied to COVID-19 crisis management, and how the Spanish healthcare sector has operated under stressful conditions. Market and state failures are evaluated and some improvements are offered, according to the theories of Austrian Economics and New-Institutional Economics. At the macro level, the premise is the decentralization of the Spanish healthcare system a long time ago, to provide a better service to citizens, according to the idiosyncrasies of the Autonomous Communities (similar to federal states). The crisis has evidenced the failures of the Spanish system and its semi-federal model, without coordination to manage the trouble. Also, the General Government's recentralization attempt has failed too, proving Mises's theorem on the impossibility of economic calculation in intervened and coactive systems, with problems of shortages, lack of coordination, etc.; Buchanan-Tullock's theorem on the unfinished agenda of state interventionist and it suppression of private sector was also proven. At the micro level, health institutions (hospitals and health centers) have fallen into the paradox of media overexposure and the fake-news risk, because the more information they have tried to transmit, the more confusion they have caused, reducing the value of the supposed transparency and accountability, in addition to decreasing citizen wellbeing, giving way to a higher level of dissatisfaction and more risk of a syndemic. To perform the analysis of accountability and wellbeing perceived, this paper has used quantitative contrast techniques on secondary sources, such as the surveys of Centro de Investigaciones Sociológicas (part of the Public Sector) or Merco rankings (independent institution).

Governance in the Italian Processed Tomato Value Chain: The Case for an Interbranch Organisation

Collective action among producers is a corrective measure for power imbalance, which affects primary producers in agro-food supply chains. As associations of producers and processors, Interbranch Organisations (IBOs) promote dialogue, best practice, and market transparency. However, interbranch cooperation is still a less explored subject in agro-food governance studies. Therefore, the present paper aims to analyse the role of IBO North Italy for Processing Tomato (IBO NIPT) in the governance of the processed tomato value chain. The IBO for Processing Tomatoes of Northern Italy was chosen as a case study as it is one of the eight recognized IBOs in the country and Italy is the third biggest producer of tomatoes for processing worldwide. Semi-structured interviews with stakeholders involved in the processed tomato value chain were carried out to reach this aim. Abridged transcripts were analysed through thematic analysis by two or three researchers. The present study has three research steps: first, to explore the history of the IBO NIPT; second, to explore its current role as collective institution acting towards power imbalances; third, the IBO’s role in reference price streamlining. A multi-theoretical approach based on the following three theoretical frameworks was used to analyse the interviews: New Institutional Economics (NIE); Devaux’s framework for collective action; and Transaction Cost Economics. The paper highlights the role of local institutions in bringing innovations in the food supply chain and suggests that the future of IBOs in Italy has to be expanded beyond reference price streamlining and could benefit from the cooperation of retailers.

RURAL TOURISM

The study aims to analyze the decision-making of the agents through the theoretical assumptions of the New Institutional Economics (NIE), and the results in transaction costs of rural property activity added tourism to its agricultural business. The methodology adopted was the exploratory and explanatory study. Data were collected using semi-structured interviews and the analysis was qualitative. Finally, we know that we still need to find appropriate tools to reduce the asymmetry of information and allow a wider field of view to making agents' decisions.

Habib Ahmed's maqāṣid sharī`ah concept on cooperative regulations in Indonesia

This article discussed Habib Ahmed's maqāṣid sharī`ah concept on Islamic Financial Institutions (IFIs) contracts, regarding the dualism of cooperative regulations in Indonesia between sharia and non-sharia-based cooperatives. In initiating the NIE (New Institutional Economics) approach for IFIs, Habib Ahmed emphasized the vital role of embeddedness as a culture rooted in the knowledge system. This embeddedness is the starting point of IFIs adaptation. These informal institutions then influence the formation of formal institutions and are followed by institutional forms of organization. Finally, the transaction products are in line with the organizational form. In other words, according to Habib Ahmed, if the adaptation and transaction of the IFIs start from this stage, then the product will be entirely in line with the proper Islamic ontology and epistemology. This qualitative library research focused on the reality of cooperatives in Indonesia, assessed from Habib Ahmed's perspective. This study concluded that Indonesia's economy still does not represent the goal of its constitutional economy with a feeling of kinship and mutualistic organization, such as cooperatives. In addition, its significant economic growth, which places it in the top twenty countries (G-20) in Gross Domestic Product (GDP), is not inclusive.

The role of path–dependent institutions during the collapse and rebuilding of a fishery

This article presents a historical analysis of the Norwegian spring spawning herring fishery. Theoretically, the study is rooted in new institutional economics (NIE). The study shows that the fishery collapsed during the 1960s because of overfishing. The underlying key drivers were unregulated open access management, technological progress, and excess capacity building. The analysis further discloses that the initial responses to the resource crisis exacerbated the underlying issues; subsidies introduced to support a fishing fleet that was not adapted to the catch base. Also, fishing for juvenile herring was allowed to protect the income of the fishers. The study argues further that the breakdown of the herring fishery represented a historical event that marked a paradigm shift from open access to closed entry fisheries management. The building of formal institutions supported the turnaround in the management path. In the aftermath of the crisis, the fishery was closed, total allowable catch regulations (TACs) were introduced, and individual vessel quotas followed a few years later. During the 1990s, the stock recovered, and herring reemerged as a key revenue driver for the pelagic fleet. Finally, some economic effects for the pelagic vessels brought about by the changed management path are outlined in the paper.

The evolution of the Nile regulatory regime: a history of cooperation and conflict

The objective of this study is to trace the historical evolution of the present Nile Basin regulatory framework and examine its influence on the current interactions among Nile riparian states. This research adopts a case-study design, with in-depth qualitative analysis of the Nile Basin as an example of the complex transboundary relations over shared waters. It uses an analytical framework derived from the New Institutional Economics (NIE) to analyse the evolution of the institutional framework that has governed the Nile basin and how it affected the annual water share allocated to each riparian country. The study argues that the historical beliefs and social norms of the riparian societies have been among the major factors that influenced the cooperation attempts during the past century and determined their outcomes. Therefore, a prerequisite to develop sustainable cooperation is levelling the playing field by addressing the beliefs and norms that have prevented cooperation while identifying the beliefs that can support cooperation.

How Institutions Shape Uncertainty and Risk

Purpose: The study proposes a conceptual framework on how institutions influence risk and uncertainty. Beyond the nuances in defining the concepts in the existing literature, the role of institutions in shaping risks and uncertainties remains understudied. This paper adopts the new institutional economics (NIE) perspective to revisit the concepts of risk and uncertainty and provide a deeper reflection about its interactions with formal and informal institutions. Method: Our conceptual model is based on four propositions that support a theoretical explanation about the relationships between institutions and uncertainties, institutions and risks, and uncertainties and risks. Findings: While formal institutions have a primary role in reducing uncertainties, informal institutions can be seen as a source of risk. These findings imply firms’ strategic decisions. In this regard, we also provide a research agenda for future empirical studies in the area. Originality/value: The study highlights the importance of institutions for companies to deal with risk and uncertainties. The institutions have a primary role in defining the “known part” of the uncertainty, allowing the companies to evaluate the different scenarios for decision-making. Theoretical/Methodological Contributions: This study differentiates risk and uncertainty interaction according to institutional theory. Additionally, we offer an academic discussion of how formal and informal institutions can shape risks and uncertainties.

The Tourism Sector Under Uncertainty due to COVID-19 Pandemic and the Assumptions of New Institutional Economics*

Purpose: The aim of this study is to show the relationship between the functioning of tourism market subject to New Institutional Economics (NIE) in social terms. Furthermore, it aims to discover a need to identify relationships between the NIE theoretical framework and the phenomena and processes in tourism in the COVID-19 period. Design/Methodology/Approach: This research was based on critical literature analysis, statistical data and participant observation in the tourism sector. Notably, the new perspective presented in this study allows identifying non-market phenomena and processes that accompany economic mechanisms. This approach could be an important direction for mitigating the effects of the COVID-19 pandemic in the tourism sector. Findings: The study results showed that the diverse activities carried out by tourism sector subjects largely concern tangible and intangible public goods, however, these activities are not naturally compatible. Private tour operators have hidden goals—often short-term and particularistic—that frequently force public tourism institutions to adjust their activities.The importance in tourism of both formal and informal organisations is a prerequisite for strengthening the role of the state in achieving the social goals of tourism and support tourist enterprises which suffer under the COVID-19 pandemic. The novelty of the findings are connected with an attempt to explain a relationship between the functioning of tourism market subjects in uncertainty caused by COVID-19 and NIE assumptions in social terms. Practical Implications: This study has implications for ways in which policymakers and managers could encourage tourism entities to focus on social aspects of tourism consumption. Social analysis concerning ‘new face’ of tourism under COVID-19 impact requires an interdisciplinary research and exploring the topic. The limitations of the study include little attention given to the specificity of the tourism market, including hotels, restaurants, air passenger transport in different countries of Europe. Originality/Value: It is the first time that analysis of new institutional economics has been shown as a way of searching for inter-institutional co-operation in the field of tourism policy.

A Theoretical Basis For Innovation, Institutions And Insurance Penetration Nexus

Insurance is one of the systematic solutions to risk reduction available in the modern world. Its contribution to socio-economic development is difficult to overestimate, bearing in mind that the level of diversity and inclusion of the sector explains the degree of financial progress of a nation. This paper has a twofold objectives of ascertaining and discussing an overview of theories that stimulate economic performance from the angles of institutions and innovation. Keywords were used to search literature repository with the aid of Harzing’s publish or perish software. As a result of this process, the New Institutional Economics (NIE) and Schumpeter’s theory of Innovation found suitable to the objectives of the study. The paper concludes that efficient institutions coupled with the emergence of the novel products may likely promote trust and confidence in the market as well as specific needs of the large majority unserved potential consumers. Therefore, interaction between institutions and innovation could likely trigger insurance uptake.

Economic Perspectives on the Governance of Blockchains

The structure and operation of blockchains are dynamic, which means that mechanisms must exist for implementing changes. The New Institutional Economics (NIE), with its emphasis on how rules govern the performance of any complex organization or network, provides an especially useful framework to consider governance of blockchains. We consider how NIE has been applied to blockchain and future applications. Our analysis is divided into consideration of blockchain as an institutional technology, blockchain as a polycentric enterprise, and the ways to empirically research blockchain. The Institutional Analysis and Design (IAD) framework developed by Elinor Ostrom is particularly useful to develop an empirical research agenda for comparing the institutional features of blockchains and, ultimately, to comparing their performance.

The impact of regulation governance on financial system efficiency: The importance of consumer behavior

This study focuses on the value structure that correlates improvements in the financial services consumer’s decision-making quality with the development of their autonomy. The discussion is based on the concepts of ceremonial and instrumental values, according to Bush (1987). We anchor our analysis on the premise that there is still room for enhancing the results within the National Financial System – NFS – by broadening the scope of initiatives on financial services consumers’ education and protection (von Borowski Dodl, 2020). Strengthening this perspective, we emphasize the consumer’s role as an agent and the relevance of taking decisions according to their life plans. The analysis is undertaken through the institutional literature lens, considering both schools of thought: Original Institutional Economics (OIE) (drawing on Tauheed, 2013a, 2013b) and New Institutional Economics (NIE) (focusing on North, 1990). From the conjunction of the theoretical apparatus and the applied analysis, we propose a governance policy within the NFS aimed at increasing its efficiency. Effective communication between stakeholders and consumers’ participation in the structuring of institutions – by publicly evincing their political power – hold the potential for promoting governance effectiveness. Additionally, although the approach taken focuses on the NFS, the diagnosis process carried out in this study can be easily reproduced in other contexts.

Institutions and Entrepreneurship: Pushing the Boundaries

New institutional economics (NIE) and Austrian economics (AE) both emphasize the role that institutions play in facilitating or impeding entrepreneurship and hence economic growth. In this paper, we discuss the complementarities between AE and NIE for advancing our understanding of the relationship between institutions and entrepreneurship. We argue that a subjectivist view of institutions, entrepreneurial microfoundations, and capital heterogeneity can enrich our understanding of within-country variation in entrepreneurial strategies, institutional evolution, and the relationship between institutions and production processes. We hope our discussion serves as an invitation both for further theoretical collaboration between the two camps and as a spur to applied research at the intersection of institutions and entrepreneurship.

Catholic Social Thought And New Institutional Economics: A Preliminary Assessment of Their Affinities and Areas of Potential Convergence

The paper explores the potential link between Catholic Social Teaching (CST) and the theoretical developments associated with New Institutional Economics (NIE). The emphasis is put in particular on the contributions of two Nobel Prize winners in economics, Douglass C. North and Elinor Ostrom, and on the work of political scientist Vincent Ostrom. By adjusting the neoclassical presumptions dominating modern economic theory to include culture, ideas, and religious beliefs in the analysis of economic behavior, the economic and social theorizing developed by these scholars advances a framework that has significant affinities with CST’s foundational critique of economic concepts and theories and with its normative position regarding the nature and functioning of social and economic systems.

A análise da comercialização institucional da agricultura familiar via Pnae no Território Rural Médio Araguaia, Goiás: possibilidades e limites da abordagem da nova economia institucional

Sob o enfoque das teorias da Nova Economia Institucional (NEI), o presente trabalho tem por objetivo verificar a inserção comercial da agricultura familiar no Programa Nacional de Alimentação Escolar (Pnae), no Território Rural Médio Araguaia, Goiás (GO), com a finalidade de se compreender até que ponto a NEI é útil para se entender as questões e peculiaridades que envolvem os agricultores familiares. Por meio do método dialético, da pesquisa bibliográfica e dos dados obtidos a partir da porcentagem de aquisição da agricultura familiar via Pnae dos 21 (vinte e um) municípios do Território Médio Araguaia, GO, através das sedes das subsecretarias estaduais de educação nos municípios de Iporá, Piranhas e Jussara, nos anos de 2014 e 2015, foi possível verificar o comportamento dos agentes e dos agricultores envolvidos no Pnae, demonstrando como a racionalidade limitada e o oportunismo dos agentes, a assimetria de informação entre e dentro das organizações, os custos de transação, a especificidade dos ativos, os contratos e a estrutura de governança podem ajudar a compreender e explicar os processos econômicos dos agricultores familiares. Assim, verificou-se que as políticas públicas de assessoria às organizações da agricultura familiar, como o Núcleo de Extensão em Desenvolvimento Territorial (Nedet), são importantes para a efetivação da inclusão produtiva dos agricultores familiares, podendo ainda problematizar as transações com uma maior precisão ao analisá-las com foco na teoria sustentada pela NEI, embora a lógica produtiva dos agricultores familiares não se concentre apenas no viés econômico.

An Economic Analysis of the Perception of ‘Grief’ in the Letter to Philippians in the Light of New Institutional Economics (NIE)

Abstract Beginning with Paul Holloway’s view that the letter to Philippians is a letter of consolation aimed at comforting the “grief” of the grieving among the Philippi community, this paper argues one step further that the grief in the community is a problem of perception, with the help of new institutional economics (NIE). The primary reason for the divergence in perception is due to living in the Roman colony, the believing community was greatly affected by the values embedded in both formal and informal rules of the economy. In order to justify this view, this paper will, first, demonstrate the textual evidence showing that Paul’s major concern is the perception of believing community. Then, with the help of NIE, I will show how the formal and informal economic institutions of the Roman colony might constitute a perception that is very different from what Paul would expect.

Анти-Аузан: критика одной социальной философии Часть 2.

<span>Джон Коммонс подчеркивал, что его институциональная экономика опирается на прагматизм Чарльза Пирса в своем методе исследования и на прагматистскую философию Джона Дьюи в своем видении предмета исследования. Отбрасывание новой институциональной экономической теорией (НИЭТ) прагматистской философии и составляет основу осуществленных ею радикальных деформаций понятийного аппарата исходного институционализма. Это касается видения природы человека, концепции социального института и понятия трансакций. В статье на основе осовремененного изложения содержания этих понятий в институциональной экономике Дж. Коммонса осуществляется критика деформации этих понятий в НИЭТ, изложенных в книге декана экономического факультета МГУ А. А. Аузана «Экономика всего. Как институты определяют нашу жизнь». А. А. Аузан, как и многие авторы учебников по НИЭТ, следовал колее (path dependence) профессии советского политэконома. Аналогично тому, как политэкономы социализма опирались на марксизм, послуживший идеологией при создании советского социального порядка, так А. А. Аузан пытается интерпретировать уже постсоветский социальный порядок в терминах НИЭТ, отражающей идеологию, послужившую возникновению этого порядка, то есть идеологию неолиберализма.</span>

Critical Realism and Institutionalism in Economics: A New Perspective on an Old Debate

:Richard Langlois supports the contribution of New Institutional Economics (NIE) to Economics, contrasting the following assertions: (i) Original Institutional Economics (OIE) wanted institutions but without theory; (ii) Neoclassical Economics (NE) wants an economic theory without institutions; and (iii) NIE wants both institutions and theory. This article uses the approach of Critical Realism with the aim of counteracting the suggestions of Langlois, who considers the advances of institutionalist schools by contrasting the theoretical (scientific) and anti-theoretical (naive empiricism) institutionalism. Instead of sustaining a criterion of scientificity founded on the assumption of a world composed of isolated and atomized events, Critical Realism treats the real unity of human activity and social structure as a condition of knowledge in the social domain. This implies the adoption of a structured ontology that deals with the opening of social systems, the existence of emerging phenomena, and the rejection of the notion of cause as a constant conjunction of events.

BEHAVIORAL ASSUMPTIONS AND ATTRIBUTES OF TRANSACTION IN THE DAIRY PRODUCTION CHAIN IN GOIÁS STATE, BRAZIL

The present study aims to analyze the behavioral assumptions of agents of the dairy chain and to identify the influences that such behaviors have on transaction costs, taking into account the relationship between the Mixed Farming Cooperative of Bela Vista de Goias (Cooperbelgo) and its members. Attributes of transactions and market governance structure present in the dairy production chain are also described, taking into consideration the study region that is the municipality of Bela Vista de Goias, Goias state, Brazil, based in the principles of the New Institutional Economics (NIE). The study was done through exploratory and descriptive research, based on the case study, using statistical data, documents, and literature review. It was mainly observed that behavioral assumptions and transaction attributes do not increase the amount of transaction costs in the dairy chain since the relations between cooperative and its members are characterized by high frequency, reliability, loyalty, and scarce presence of opportunistic behaviors and uncertainties. As a case study, results may not be simply extrapolated to other different realities. As a case study, results may not be simply extrapolated to other different realities but are useful to exemplify how the behavioral assumptions and the attributes of transactions may influence the magnitude of transaction cost in a real agri-food chain. Cooperative arrangements create trust among agents, reducing the risk for transaction cost promoting behaviors such as opportunism. Provides information about one of the most growing dairy regions in Brazil.

Анти-Аузан: критика одной социальной философии Часть 1

<span>В статье дается ответ на вопрос, почему в новой институциональной экономической теории (НИЭТ) игнорируется институт денег, несмотря на то, что этот институт является центральным в капиталистической экономике. Дело в том, что НИЭТ, продолжая традиции сначала классической политической экономии, а затем и неоклассического экономикс, нацелена на легитимацию монетарного социального порядка, в котором эмиссия значительной части денежной массы осуществляется частными банками при выдаче кредитов. Монетарный социальный порядок впервые возник в Англии в результате «Славной революции» 1688 г., следствием которой было подчинение государства буржуазии. Деньги при этом становятся основным источником власти, на сокрытие чего и нацелена преподаваемая в университетах экономическая теория. Впервые деньги как социальный институт последовательно стали рассматриваться в институциональной экономике Джона Коммонса, и НИЭТ, выхолостив ее основные понятия, продолжает, как университетская учебная дисциплина, дело идеологического прикрытия монетарного социального порядка.</span>

Mechanisms of Weak Governance in Grasslands and Wetlands of South America

Weak governance is a major threat to sustainable development, especially in rural contexts and within ecosystems of great social and economic value. To understand and compare its arrangement in the grasslands and wetlands of the Colombian Llanos and the Paraguayan Pantanal, we build upon the Institutional and Development Framework (IAD) as we explore the role of political, economic, and social institutions and combine components of the theory of common-pool resources (CPR) and new institutional economics (NIE). This hybrid conceptualization provides a synthesis of how top-down hierarchical and market-based systems of community-based and natural resource management negatively affect sustainable development in both study areas. Our findings suggest three underlying mechanisms causing a situation of weak governance: centralized (economic and political) power, the role of central and local governments, and social exclusion. Understanding these multidimensional contextual mechanisms improves the understanding that institutional structures supporting arrangements that handle grasslands and wetlands in a sustainable way are needed to protect the ecosystem’s social and economic values, especially in rural and marginalized contexts.