Institutional Economics: Then and Now

Abstract

This article gives a history of American institutionalism, and a brief comparison with the more recent "new" institutional economics. Institutionalism was a significant element in American economics between the Wars, but declined rapidly thereafter. The article outlines the movement's initial appeal, its contributions, and the reasons for its decline. Although the "new" institutionalism has few direct ties to the older tradition, some interesting commonalities are found and discussed. Links to the "new institutionalism" in sociology and political science, and to historical work on other "institutional" traditions are also mentioned.

An Investigation of the Influence of the Worldwide Governance and Competitiveness on Accounting Fraud Cases: A Cross-Country Perspective

“…The new institutional economics attempts to extend economics by focusing on the social and legal norms and rules that underlie economic activities [7]. The 'rules of the game' are the humanly-devised constraints that structure their interaction [8].…”

Bernard Mandeville and the doctrine of laissez-faire

“…Bianchi showed that repeated games of the co-ordination type were helpful in representing 7 In addition to the works cited above, there is a large literature on the issue of group selection, namely on whether it can provide an adequate mechanism for cultural evolution in Hayek (Caldwell 2000;Whitman 1998;Sober and Wilson 1988;Steele 1987;Fiori 2006 PRENDERGAST / MANDEVILLE AND THE DOCTRINE OF LAISSEZ-FAIRE VOLUME 9, ISSUE 1, SPRING 2016 110 the spontaneous emergence of norms. However, such conventions were not necessarily the most efficient and, where they were not, the shift to a more efficient solution could not happen spontaneously but required active intervention (Bianchi 1993;Rosenberg 1963;Rutherford 2001). Norms can also emerge in prisoners' dilemma type games which continue in time but the means by which they do so are not well understood.…”

Dealing with private property for public purposes : an interdisciplinary study of land transactions from a micro-scale perspective

“…Institutionalism originally stems from several scholars1, the most influential of these being Thorstein Veblen's (1898;1899;1901;1904) works (Rutherford, 2001). Veblen described institutions as generally accepted ways of thinking and …”

“…Veblen criticised the mainstream economic idea of maximising utility and proposed a more psychological view that was based on habits and instinct (Rutherford, 2001). Several years later, John R. Commons was the first who described the transaction as the main unit of economic analysis.…”

“…Several years later, John R. Commons was the first who described the transaction as the main unit of economic analysis. He stated that the conditions of transactions are determined by a combination of institutions and bargaining power (Rutherford, 2001). From 1910 onwards, Wesley Mitchell was the first to combine Veblen's institutionalism with quantitative approaches, arguing that institutions are the cause of the predictable human behaviour.…”