The Dynamics of the Institutional Change and the Market Economy: Understanding Contemporaneous Market Development Processes

The Austrian theory of institutions shows the particularity of being tied into a market process analysis. If such a specificity gave rise to a great number of analytical as well as methodological or epistemological contributions, its empirical dimension has been neglected to the benefit of the so-called Institutional works. The aim of my contribution is to come back to this untapped potential in order to exhibit the operational nature of Austrian analyses of institutions, particularly those of Lachmann. The objective here is to establish, through an appropriate temporal articulation of different institutions, the conditions for a harmonious development of market processes. I particularly show the great benefit of such a framework in order to, on one side, offer some explanations of the recent financial crisis faced by the emerging economies, and on the other side, to understand the specificity as well as the coherence of the Chinese economic transition.