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New Institutional Economics

October 24th, 2008 humas Leave a comment Go to comments

By Peter G. Klein, University of Missouri at Columbia – Contracting and Organizations Research Institute (CORI)

//papers.ssrn.com/sol3/header/logo_socialThis essay surveys the new institutional economics, a rapidly growing literature combining economics, law, organization theory, political science, sociology, and anthropology to understand social, political, and commercial institutions.

This literature tries to explain: what institutions are, how they arise, what purposes they serve, how they change, and how they may be reformed.

Following convention, I distinguish between the institutional environment (the background constraints, or rules of the game that guide individuals’ behavior) and institutional arrangements (specific guidelines designed by trading partners to facilitate particular exchanges).

In both cases, the discussion here focuses on applications, evidence, and policy implications.

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