Original Institutional Economics Research Articles

Possibilities of the Economic Institutionalism’ Integration

The article is devoted to the search and substantiation of the answer to the question whether it is possible to combine the original and new institutional economics. For this, first, methodological holism and methodological individualism are compared, which share the aforementioned directions of economic institutionalism. It is concluded that these methodological principles are logically incompatible in their ontological foundations, but they are close in the types of the analyzed processes and phenomena explanations. Secondly, the definitions of the institution are compared, which are usually used in these areas. From their comparison, it is concluded that the understanding of the institution in the new institutional economics is more productive than that followed by the supporters of the original institutional economics. In the final part of the article, it is concluded that the convergence of the two institutionalisms is possible through the deployment of a discussion based on the results of empirical research, which can show the participants the advantages and disadvantages of the scientific methods used. Methodological discussions are considered unproductive.

From Predator to Parasite: On Private Property and Our Ecological Disaster

: The institution of private property forms the basis for ecological disaster. The profit-seeking of the vested interests, in conjunction with their modes of valuing nature through the apparatuses of neoclassical economics and neoliberalism proceed to degrade and destroy life on Earth. I assert that the radical, or original institutional economics (OIE) of Thorstein Veblen, further advanced by William Dugger, have crucial insights to offer the interdisciplinary fields of political ecology and ecological economics which seek to address the underlying causes and emergent complications of the unfolding, interconnected, social, and ecological crises that define our age. This inquiry will attempt to address what appears to be either overlooked or under-explored in these research communities. Namely, that the usurpation of society’s surplus production, or, the accumulation of capital, is a parasite that sustains itself not only through the exploitation of human labor, but by exploiting society and nature more broadly, resulting in the deterioration of life itself. I shall argue that the transformation of the obvious predator that pursues power through pecuniary gain into a parasite, undetected by its host, is realized in its most rapacious form in the global hegemonic system of neoliberal capitalism.

Institutionalisms in Economics: What are Behinds Their Variety?

The institutional approach in economic science arose, as is known, more than a century ago and is now called "the original institutional economics." In the middle of the last century, an alternative version of this approach emerged, called the "new institutional economics". Over the past forty years, in the institutional approach, it has been declared the creation of a significant number of new economic institutionalisms, such as cognitive, critical, monetary, “incomplete”, “new new”, generic, post-institutionalism, post-Keynesian, and legal institutionalisms. This article is devoted to the analysis of the main provisions of the listed above institutionalisms in economics, in order to answer the question whether they are alternatives to the previously created original and new institutional economics, or whether they clarify some details in these basic institutionalisms. The study showed that the most developed part of the institutionalisms that have arisen in recent decades expands the fields and methods of research within either the original institutionalism or the new institutional economics, without suggesting the grounds that would go beyond the foundations of the named "basic" institutionalisms. Based on this, the article concludes that the growth in the number of institutionalisms indicates the development of "basic" institutionalisms, and not that they have exhausted the research opportunities inherent in them.

Urban villagers as real estate developers: embracing property mind through ‘planting’ housing in North-east China

Urban village collectives, as one of the stakeholders of land requisition and development in urbanized China, have gradually been driven into real estate development. This transformation has raised an important question regarding how villagers develop their ‘property mind’. From 2015 to 2017, guided by an abductive institutional economics approach, which holds both original and new institutional economics in dialogue, we addressed this question by conducting fieldwork in Xiaojia village, Northeast China. In Northeast China, unlike in the southern cities, there was no foreign investment and the population was in decline. Nevertheless, the villagers developed housing, first for their own use and then for the market. The resulting evidence indicates the following: 1) property rights are social relations and constructed socially and institutionally; 2) markets are not independent, they are conditioned by the institutional context.

Is unified institutional economics possible?

In recent years, some papers were published with the aim to integrate the original institutional economics and new institutional economics. This paper considers the possibility to solve this problem. To do this, it has analyzed four tasks: firstly, how do the original institutionalists characterize their scientific program specificity; secondly, how do the original institutionalists criticize new institutional economics; thirdly, what do they mean by the integration of original institutional economics and new institutional economics, that they have been observing since the 1990s and fourthly, what do they propose as a integration program. The analysis showed that the explicit methodology of original institutionalism, in fact, attributes to it characteristics, which are very close to the properties of “folk theory”. New institutional economics’ criticism is often based on the distorted interpretations of this scientific research program. The authors typically understand as the institutionalisms’ similarity the facts of the new institutionalism development by Douglass North, who used the data of the empirical behavioral research, but not the claims of original institutionalism. The method of integration proposed in the literature presupposes the adoption of the old institutionalism methodology by the new institutionalism, which could drastically reduce the quality of its research. The paper concludes that under present-day conditions, it is practically impossible to create a unified institutional economics.

Alternatives to managerialism in higher education and science

Commitment to efficiency amid the implementation of competition principles and the market-oriented approach stimulates the emergence of contradictory tendencies such as commoditization and bureaucratization of higher education and science. The paper explores the dissemination of ideas of managerialism and related institutional traps in academic environment. Methodologically, the study rests on original institutional economics and the theory of reforms for analyzing institutional traps in the education and academic sphere. The authors apply qualitative methods and focus group research to identify possible alternatives to managerialism. Using data from three focus groups, we analyze institutional traps in education and science and the mechanisms for eliminating them through identification of opinions, values and experience of respondents (actors). The study underlines that there is a need for considering principles, models and regulation mechanisms in education and science alternative to managerialism. They are being formed either in the context of rules, routines, norms and management technologies emerging as a result of evolution and actors’ adaptation to the changing environment, or as processes deliberately planned and developed within academic self-government and self-organization and/or as a result of state policy. The research develops alternative management mechanisms in the field of education and science with reference to the identified institutional traps and actors that can act as bearers of these alternatives in academic community.

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.

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.

Do ambiguous property rights matter? Collective value logic in Lin Village

Since the 1980s, landed property rights have been the subject of heated debate in China. On the one hand, the OECD and many mainstream economists, China’s road to prosperity is hampered by its system of vaguely-defined rights to land which, according to these analysts, is preventing the efficient use of land and causing social conflicts. On the other hand, critics of private property rights theory argue that the axiomatic denunciation of ambiguous property rights one-sidedly privileges economic efficiency at the expense of social, cultural and ethical considerations. This polarised debate raises the question, ‘Do ambiguous property rights matter?’ To address this question, this article analyses the negotiations around a development project in Lin Village, Xiamen. In this relatively affluent urban village, differing conceptions of the ownership of land have not posed any impediment to the joint development projects successfully carried out by villagers, Lin Village Collective and the local government. This evidence questions the claim that a private property rights system is prerequisite for transformative urban development irrespective of context. Lin Village’s land use system, an alternative to private land tenure relations, suggests that the collective value logic, defended by land economists of the original institutional economics school, offers an alternative to the private, exclusionary model of urban development.

State-Owned Enterprises in Chinese Economic Transformation: Institutional Functionality and Credibility in Alternative Perspectives

:The institutions of China’s state-owned enterprises have deviated fundamentally from the principle of individual(istic) property rights. The paradox is that the enterprises appear to have performed well in terms of productivity and profitability. This article examines the institutions in the light of alternative theoretical perspectives. The central message is two-fold. First, regarding functionality, the long-term oriented institutions could be conducive to productive efficiency but could also be detrimental to allocative efficiency. Second, regarding credibility, the actual performance hinges on the appropriate match between the institutions and the broader developmental conditions. The efficiency attributes are thus found to be context-specific. Further discussion on the notion of context-specificity reveals that relative efficiency is conjunctural rather than structural in the determination of the functionality and credibility. In the spirit of Original Evolutionary and Institutional Economics, it is submitted that the attributes of relative efficiency are themselves subject to the particular “social valuation” of China’s prevailing political-economic conditions.

The Journal of Economic Issues in the Calculable Future of Original Institutional Economics

As I understand the mission of the Journal of Economic Issues (JEI), it is to advance scholarship relevant to the development of original institutional evolutionary economics (OIE) on behalf of the...

Integration of and Deliveries among the World Zionist Organization, Israel, and Diaspora Countries: System Articulation with the Social Fabric Matrix

:The religious economics (not economics of religion) concern here is the relationship between the World Zionist Organization (WZO) and Israel, which is known as a geopolitical power in its region and which is also known as an economic success story. Joseph Schumpeter and Karl Polanyi explained how the political economy of medieval Europe was influenced and guided by Christian morality. This paper extends the analysis of religious economics by using the social fabric matrix of original institutional economics to define and structure the integration of the WZO, Israel, and the Diaspora countries. This allows us to observe how to conduct such work and to learn how Israel is guided and influenced by the WZO. It also helps to explain Israel’s “risk of tearing itself apart” as noted in a recent article in the New York Times.

Contemporary Original Institutional Economics Principles, Status, and Relationship with Other Heterodox Schools of Thought

Contemporary Original Institutional Economics Principles, Status, and Relationship with Other Heterodox Schools of Thought

Institutions and ideology of managerialism in higher education and science

Reforms in the sphere of higher education and science have significantly changed its institutional structure. Managerialism as a neoliberal ideology was one of the sources of these reforms. Extensive spreading of managerialism stimulated marketization of higher education and science without due regard to professional values and institutions and resulted in the formation of institutional traps. The paper studies the effect of managerialism on the reforms enacted and their outcomes through the prism of discourses between educators and researchers. Methodologically the research rests upon original institutional economics and elements of narrative economics, including quantitative and qualitative analysis of the evolution and transformation of the ideology and theory of managerialism and its effect on management processes in higher education and science. Based on empirical data – questionnaire and in-depth interviews of researchers of the Southern Federal University (Rostov-on-Don, Russian Federation) – we explore the way in which they interpret the optimization of higher education and science. We also establish and assess the role of formal and informal mechanisms of state reform and effects of institutional optimization traps in these areas. Institutional traps analyzed through the prism of debates between the main actors display the key characteristics of the institutional sphere of education and science that impede its modernization and prevent it from enhancing its image globally. To make the reception of the reforms more positive, there is a need for constructive dialog between the governing body and subordinate entities and contact between the main actors and reformers.

Connecting Institutional Economics to Communitarian Philosophy: Beyond Market Institutions and Pecuniary Canons of Value

:This article identifies the connections between original institutional economics and communitarian philosophy. For instance, both share the common emphasis on the cultural conditioning of human agency. Moreover, they present a common orientation to the human motives that surpass purely traditional economic considerations. We exemplify these correspondences with the similar explanations of the institutionalist Anne Mayhew and the communitarian political philosopher Michael Sandel to American farmer protests during the Gilded Age and Progressive Era. We conclude by suggesting a possible common research agenda for institutionalists and communitarians regarding the moral limits of markets and civic consequences of economic arrangements.

Similarities and Dissimilarities between Original Institutional Economics and New Institutional Economics

:Original Institutional Economics and New Institutional Economics display several similarities. However, differences in methodology and normative stance are too big to reconcile both approaches. Both approaches may keep each other sharp.

Original Institutional Economics and Political Anthropology: Reflections on the Nature of Coercive Power and Vested Interests in the Works of Thorstein Veblen and Pierre Clastres

:Our inquiry advances a comparison of the anthropological content of Thorstein Veblen’s evolutionary perspective with the foundations of the political anthropology drawn from selected works of Pierre Clastres. We seek to establish that what can be referred to as a clastrean reference can simultaneously offer new perspectives on institutionalism, while maintaining a radical and emancipatory understanding of Veblen’s writings. In this sense, we seek to reconsider and reevaluate the role of economic surplus drawn from Veblen’s anthropology, while also offering a general and critical perspective for understanding the emergence of coercive power within societies.

Modeling System Complexity in the Context of Geopolitics Related to Climate Change

:Due mainly to the evolution of science and technology, ontic systems have continuously become more complex. Thus, original institutional economics has adopted and advanced the concepts of complex systems. This article further develops complexity concepts and relates them to problems of climate change. Systems complexity is combined with concepts from geopolitics in order to introduce geopolitical analysis about boundaries/borders into complex systems. The addition of geopolitical ideas allows for systems to focus on a designated social and ecological context that fits the problem of interest. The social and ecological components of open geopolitical systems lead to processes that are dynamic and complex. Thus, complex-systems modeling needs the assistance of geopolitical concepts and geopolitical models need to be embedded in complex systems. Each section of the article clarifies its meaning with examples of climate change concerns.

Technology and Institutions in neo-Schumpeterian and Original Institutional Thinking

The aim of this inquiry is to deepen our understanding of the interactions between knowledge, technologies and institutions in socio-economic process by considering the affinities and divergences of Original Institutional Economics (OIE) and neo-Schumpeterian economics (NSE). Both strands of evolutionary economic thought recognize the importance of knowledge for human progress and the role of institutions in molding this process. OIE and NSE share a common perspective in what concerns (i) the role of knowledge for socio-economic change, (ii) the behavioral dimension of technology molded by institutions, and (iii) the role of purposeful evaluation in processes of institutional and technological change. Considering these commonalities, both strands of thinking could benefit from “joining forces”. Firstly, the conceptualization of how knowledge and technologies drive human progress from a neo-Schumpeterian perspective could very much benefit from the consideration of the value system and the power structure sustaining it as put forward by OIE. Values and power appear as key determinants channeling (or retaining) knowledge towards human progress. Moreover, the role of the value system as suggested by OIE could be operationalized and further developed to explain paths of socio-economic development drawing on the conceptualization of “selection mechanisms” as put forward by neo-Schumpeterian models.

Institutions and Consistent Corruption

Original Institutional Economics (OIE), and other non-mainstream economics paradigms, tend to look holistically at socioeconomic behavior. From the OIE perspective, a society’s institutions, the implicit and explicit rules governing behaviors, are expected to shape individual and social behavior. Broadly defined, corrupt behavior can be found anywhere, at any time, but evidence suggests that, in some countries, corrupt behavior is more ubiquitous than in others indicating that corruption has become institutionalized. This paper analyzes two groups of countries: one group in which the level of corruption has been consistently perceived to be low and another in which the level of corruption has been consistently perceived to be high. Several social/institutional indicators are examined to see which, if any, institutional characteristics vary across the two groups. The research is exploratory and its purpose is to gain insight into social/institutional conditions that may discourage or encourage consistent corruption.