Property and Economic Power as Issues in Institutional Economics

In the first part of this two-part paper, I presented an "irenic" reconciliation of the three apparently contradictory definitions of "institution" within original institutional economics (OIE), employing the methodology of critical institutionalism. The critical institutionalist reconciliation of these definitions conceptualizes institutions as an emergent process by which the internal and necessary relations of social structure as collective action, mediated through agency, results in the control, expansion, and liberation of the individual action of social actors in transactions. In short, an institution is the emergent process of social structure actualized in transactions (social action). Institutions, therefore, not only have a structural existence, but also an actual existence as they are the process of the emergence of the actual (in transactions) from the structural. Institutions are multi-level processes and cannot be reduced to structures, actions, behaviors, or patterns of behaviors. In this part, I demonstrate the significance of this reconciliation in two areas. The first is its ability to further differentiate the institutional definition of economics as "the science of social provisioning" from the mainstream definition of economics as "a relationship between ends and scarce means" by decomposing the institutional definition into its productive and distributive processes. The second is its usefulness in modeling the interaction of non-economic social institutions with economic institutions at varying levels of detail. I also introduce critical institutional analysis, and use as a method, for model-building and use it to build models of communal, feudal, and industrial capitalist economies.     

A Proposed Methodological Synthesis of Post-Keynesian and Institutional Economics

Post-Keynesian and institutionalist writers have commented on the theoretical and conceptual commonalities between the two schools. Some have suggested a theoretical synthesis based on these commonalities. In spite of these theoretical and conceptual commonalities each tradition has developed significantly different methods of analysis. Instead of theoretical or conceptual synthesis we seek here to present a methodological synthesis.

Institutionalist methods have yielded "plausible" explanations, but these have been too "vague and suggestive" to be consistently used for economic policy. Post-Keynesian methods have policy necessary "rigor," but the similarity to neoclassical methods has exposed post-Keynesian theories to unwarranted synthesis with incompatible traditions.

This essay presents a synthesis of post-Keynesian and institutionalist methodology, one of "plausible rigor," combining elements of "institutional dynamics" with a heuristic framework based on John Dewey's "instrumental logic," and proposes that the resulting approach overcomes weaknesses in the methods of analysis of both schools.     

Institutional Change in Nepal: Liberalization,Maoist Movement,Rise of Political Consciousness and Constitutional Change

ABSTRACT

Contradicting the rest of the world’s promptness to discredit communism as an alternative and Francis Fukuyama’s (1992 Fukuyama, F. 1992. The End of History and the Last Man . New York: The Free Press, A Division of Macmilan Inc. [Google Scholar]) teleological account of ‘the end of history,’ Nepal witnessed a Maoist revolution between 1996 and 2006. Such a ‘deviation’ from what Fukuyama and others have viewed as the path of development raises questions about the linear progression of history and its implicit dualism of market vs. government. As several Original Institutional Economists have discussed, analytical dichotomies lead to a simplistic understanding of transformation that disregards the multilayered nature of society and, thus, concludes that history unfolds linearly to arrive at a predetermined and homogeneous end. This paper analyzes the social transformation of Nepal that preceded the Maoist revolution, through the lens of Feminist Institutionalism, utilizing a multidisciplinary approach to understand the complexity of the impacts of liberalism-protectionism political changes on Nepali institutions.     

Institutional Economics as Theory of Policy Change: Impact of Past Policy Failures on Present Policy

Social scientists have developed several theories for understanding or evaluating policy change over time. Since all costs or benefits are not internalized owing to positive transaction costs, policymaking is always implemented under cost underestimation conditions and, therefore, is imperfect. I call this trait policy failure in this article. Furthermore, I show that a new framework combining the social costs approach and the legal/economic approach in institutional economics is suitable and can be applied to evaluating how past policy failures affect present policy, providing as an example the Fukushima nuclear disaster in Japan.     

"三农"问题的制度经济学分析

从制度经济学的角度来看,制度歧视、扭曲、农村组织缺位及制度变迁的滞后、非均衡是导致"三农"问题的直接原因,而诺斯的"国家理论"则揭示了"三农"问题的更深层原因。     

Institutional Approaches to Economic Development: The Current Status of the Debate

The recent publication of "Institutions and Economic Development: Theory, Policy and History" (Chang 2011a) has stimulated a thought-provoking debate, and has brought forth a wide-ranging demonstration of the theoretical arsenal of the new institutional economics. The debate proves that, as of yet, no satisfactory theory of institutions has been articulated, nor is there an agreement on the relationship between institutional change and the politics of development. It also demonstrates the presence of two distinct lines of research: ideological and political, both of which rely on different theoretical legacies, and embody distinct economic worldviews. This scenario allows a summary of the argument in the most recent literature to be made on the relationship between institutions and development, as well as to relate the debate to the concept of development as a process of expansion of capacities.     

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.     

马克思主义与制度经济学

新制度经济学是对古典制度经济学的复归,而马克思的政治经济学则是古典制度经济学的集大成者.从古典制度经济学到新制度经济学的发展,体现了经济学演进历史的内在逻辑性.但是,马克思制度经济学与新制度经济学存在着根本分歧:前者以揭示经济制度的本质为目的;后者以为市场经济运行服务为目的.这种根本分歧的存在,决定了我们不应将二者的理论基点和研究方法混为一谈.     

利益集团与制度变迁的“陷阱”——兼论转型的合法性危机

文章主要讨论制度变迁过程中那些无效率的制度均衡是如何形成的.在时利益集团经济行为进行分析的基础上,主要考察了Dayis和North理论意义上的第一和第二行动集团在制度变迁中的作用.研究表明,由于利益集团自身利益与社会利益之间存在着冲突,因此即使是启动和推进制度变迁过程的第一和第二行动集团,也有可能妨碍制度变迁迭至最优点,使其掉入"陷阱"之中.     

Financial Liberalization as a Process of Flawed Institutional Change

I argue that the financial liberalization of the last decades, which resulted in a worldwide crisis, relied on an institutional change that ill-shaped actors’ behavior so as to let them enter into unsustainable speculative activities at the expense of macro-stability. To support such an assertion, I draw upon a specific Veblen-Minsky approach to a credit-money economy and its endogenous fragilities. I also maintain that, when financial markets are liberalized and private-interestsrelated self-regulation replaces public macro-prudential supervision, the financial system undergoes institutional deadlock and the ensuing confusion is transformed into a market gridlock. Markets then become unable to recover without public rescue operations of banks. The subsequent negative economic and social consequences are beyond the limits of any acceptable liberal ideology and scientific understanding. Therefore, systemic stability calls for a tighter macro-regulatory framework to remove the domination of speculative finance over economic decisions and activities.     

制度变迁、金融结构与经济增长--基于中国的实证研究

本文采用理论分析与实证分析相结合的研究方法,从理论上分析了制度变迁、金融结构调整与经济增长三者之间的相互作用机理;从实证上通过在金融结构与经济增长模型中引入能够综合反映制度变迁的制度变量,验证了国家制度变迁对一国金融结构与经济增长会起到促进或制约的作用.当制度供给与金融结构和经济增长对制度的需求达到均衡时,国家制度安排会优化金融结构、促进经济增长,否则便会出现规模与效率的"反比"现象,从而回答了转型国家规模与效率的悖论问题,进而给出了我国金融结构升级的选择路径及相关政策建议.     

The Circular Economy and Institutional Economics: Compatibility and Complementarity

The notion of a circular economy (CE) developed out of the work of Kenneth Boulding and others concerned about Earth’s limited resources and its capacity for regeneration. The concept has recently become the heart of an economic perspective influencing governments, companies, and researchers. Core topics examined by those researchers include resource use, economic value, and systems thinking. The CE literature and the tradition of institutional economics (IE) have important elements of compatibility and complementarity which we examine in this article. There are also opportunities for collaboration between CE and IE.     

The Legal-Economic Nexus from the Perspective of New Institutional Economists and Original Institutional Economists

There are two institutional economics approaches to law and economics. New institutional economists prescribe that arbitrators foster efficiency in setting economic disputes and original institutional economists focus on creating reasonable values – that is, balancing efficiency and justice. Disequilibrium between desired efficiency and perceived fairness triggers agency and is a source of coevolution of law and economics.     

Contracting Boundaries as Institutional Infrastructure: Efficacy, Adaptation, and Obsolescence: Commentary on La Croix and Ghiselin's Comments

The New Institutional Economics (NIE) emphasizes that different governance structures generate a rich variety of observed institutional arrangements. In Yarbrough & Yarbrough (1999), we extended this reasoning to argue that different governance structures also carry implications for the sets of acceptable contracting partners or ‘insiders’. Here we discuss various contracting groups as institutional infrastructures and evaluate their efficiency, ability to adapt, and longevity or possible obsolescence in the face of changes in the nature of transactions or of the transactional environment. The fact that, despite their many shortcomings, private institutional infrastructures continue to be built, to adapt, and to function, even in modern societies with well-developed state-based legal systems, provides a measure of the centrality and complexity of the task of assuring contractual integrity. This revised version was published online in August 2006 with corrections to the Cover Date.     

Institutional Usury and the Banks

Although usury is no longer widely discussed in economic discourse, the concept of usury is useful in explaining financial upheavals such as the recent and on-going crisis. The Scholastics began the study of interest with their teachings on usury, and Keynes brought the usury debate back into the discussions during the period around the Great Depression. Bernard Dempsey, a Jesuit economist, wrote a definitive assessment of scholastic theory in the early 1940s under the direction of Schumpeter. Dempsey developed his own theory of financial crises which he attributed to the presence of what he termed “institutional usury.” The recently implemented policy by the Federal Reserve of paying banks interest on reserves is examined in light of Dempsey's concept of institutional usury. The scholastic concept of the just price is used to analyze market power wielded by large financial institutions in the modern economy.     

The Concept of “Progressive” Institutional Change and Its Implications for Economic Policy Formation

Institutional economics has long shown that entrepreneurship plays a critical role in the pursuit of economic development and wellbeing. At the same time, entrepreneurship is complex and evolving. The path between entrepreneurship and wellbeing is not clear-cut, and not all types of entrepreneurial activity are correlated with economic growth. Failure to acknowledge this heterogeneity has important consequences for entrepreneurship policy and human development, particularly where gender is concerned. The paper treats the complexities involved in defining and conceptualizing entrepreneurship, setting the stage for a focus on the gender dimension. As female entrepreneurial activity has risen in many countries around the world, it is important to acknowledge the diversity of such activity and the ways it does (or does not) correspond to an increase in human freedom. Highlighting the differences between necessity and opportunity entrepreneurship, this paper illustrates the formal and informal institutions that shape gender inequity in the entrepreneurial environment. It concludes with some suggestions for addressing this important issue.     

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.     

我国民间金融发展的制度变迁与制度安排

民间金融的发展对我国渐进式改革提供了重要的金融资源支持.在分析我国既有的金融体制变迁的基础上,民间金融的发展是内生于民营经济的诱致性制度变迁.     

制度变迁与经济增长质量:理论分析与计量检验

本文提出有效的制度变迁是经济增长质量变化的重要原因这一假说,论述了制度变迁对经济增长质量的作用机理,并依据1992-2007年数据检验了二者长期因果关系。结论是制度变迁是中国经济增长质量的长期格兰杰原因。中国经济增长质量总体呈上升趋势,但与经济增长速度并不同步。提高经济增长质量需要从制度方面加以型塑,逐步实现经济增长与质量提高进行同步。     

失地农民问题与制度变迁

在制度演进论的框架下分析了农民失地的制度变迁过程,重新分析了被我国学者忽视的失地农民和城市居民作为行为主体参与博弈过程所起到的重要作用,提到了要关注制度执行的效率与结果及失地农民补偿后会带来的社会问题。提出加强制度的执行监管,建立一种平衡机制,达到社会和谐的目标。