All topics
Academic
Institutional economics Archive
-
Social cohesion & the Dutch revolution
Posted on November 23, 2008 | No CommentsIs social cohesion an absence of differences, or acceptance of differences Economists have argued that social cohesion & trust are important for economies to grow. But they have often mistaken cohesion to mean the lack of differences. If capitalism in Holland is anything to go by, it’s not the lack of differences, but an acceptance of it that leads to a cohesive society. Measuring social cohesion Having argued that social cohesion matters for economic performance economists set out to establish it. This was “achieved” by measuring social cohesion and relating it to growth (of course, teasing out other factors). Unfortunately,... -
What institutional economics has to say beyond growth
Posted on November 23, 2008 | No CommentsInstitutional economics has been mainly concerned with institutions for economic growth. Will the same insights apply for economic development? Suppose an island is discovered amidst the pacific and a group of people decided to establish a country there. These people are from a variety of backgrounds, speak different languages and are of differing abilities. They decide that they want to achieve maximum possible development over the long run and consult an institutional economist for advice. They state clearly that growth is not the same as development and that they want to maximise development rather than economic growth. What advice will... -
Suitability of Amartya’s framework for institutions & development
Posted on November 23, 2008 | No CommentsIn order to theorise the roles of institutions in development, it is important to define development first. In this post, I argue that Amartya Sen’s “development as freedom” is the most suitable framework for theorising institutions & development. Amartya Sen has made a powerful argument for looking at development as a process of enhancing substantive freedoms (e.g. freedom from hunger, illiteracy, morbidity, etc.). This is best encapsulated in his book Development as freedom. Sen argues that freedoms have an intrinsic and instrumental importance and that human agency is the key to the pursuit of development. All three ideas have a... -
Institutional economics, collective action & change
Posted on November 23, 2008 | No CommentsInstitutional economists have held that we do not know how institutions change. I speculate why collective action as an agent of institutional change has been ignored I used to be surprised that institutional economists argue that they do not know how institutional change happens. Collective action is such a prominent driving force, how could the economists have missed this? I speculate that this must be due to the structure-agent dichotomy in social sciences. Social theorists across disciplines have struggled between choosing structures or agency as their basis of analysis. Those who choose structures (production relations, prices, etc.) effectively assume that...
