Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-09T06:00:37.109Z Has data issue: false hasContentIssue false
  • English
  • Français

The taming of institutions in economics: the rise and methodology of the ‘new new institutionalism’

Published online by Cambridge University Press:  23 October 2009

PETER SPIEGLER  and
WILLIAM MILBERG
PETER SPIEGLER*
Affiliation:
University of Massachusetts, Boston, MA, USA
WILLIAM MILBERG
Affiliation:
New School for Social Research, New York, NY, USA
*
*Correspondence to: Peter Spiegler, University of Massachusetts-Boston, 100 Morrissey Blvd., Boston, MA 02125, USA. Email: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract:

We examine the origin and methodology of a ‘New New Institutional Economics’ (NNIE) – an emerging research agenda distinguished by its attempt to account for the role of institutions in complex socio-economic change by formally modeling institutions as the background conditions to parameterized cost–benefit calculations. The NNIE expands the application of economic modeling tools to new areas of inquiry, models institutional outcomes with parsimony and mathematical rigor, and introduces political and economic power, thereby allowing for consideration of institutional change that is not Pareto improving. Using a four-part analytical framework, we find that the explanatory power of NNIE analysis derives not from its formal models, but from a more vague, nuanced, and narrative version of the formal models, which we call ‘Quasi-Models’. We find that the NNIE's formal models are too parsimonious to meaningfully illuminate the complex institutions they ostensibly represent.

Type
Research Article
Information
Journal of Institutional Economics , Volume 5 , Issue 3 , December 2009 , pp. 289 - 313
Copyright
Copyright © The JOIE Foundation 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, D. (2005), ‘Understanding Institutions’, presentation slides, Lionel Robbins Lectures, viewed 19 September 2008, <http://econ-www.mit.edu/faculty/acemoglu/selected>.CrossRef.>Google Scholar
Acemoglu, D. and Robinson, J. A. (2006), Economic Origins of Dictatorship and Democracy, Cambridge, UK: Cambridge University Press.Google Scholar
Barro, R. (1997), Determinants of Economic Growth: A Cross-Country Empirical Study, Cambridge, MA: MIT Press.Google Scholar
Black, M. (1962), Models and Metaphors, Ithaca, NY: Cornell University Press.CrossRefGoogle Scholar
Black, R. D. C., Coats, A. W., and Goodwin, C. D. W. (1973), The Marginal Revolution in Economics: Interpretation and Evaluation, Durham, NC: Duke University Press.Google Scholar
Blomberg, B. and Harrington, J. E. Jr., (2000), ‘A Theory of Rigid Extremists and Flexible Moderates with an Application to the US Congress’, American Economic Review, 90 (3): 605–620.CrossRefGoogle Scholar
Botticini, M. and Siow, A. (2003), ‘Why Dowries?’, American Economic Review, 93 (4): 1385–1398.Google Scholar
Burton, P., Phipps, S., and Curtis, L. (2002), ‘All in the Family: A Simultaneous Model of Parenting Style and Child Conduct’, American Economic Review, 92 (2): 368–372.CrossRefGoogle Scholar
Chang, H. (2007), Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, New York: Bloomsbury Press.Google Scholar
Coddington, A. (1975), ‘The Rationale of General Equilibrium Theory’, Economic Inquiry, 13 (4): 539–558.CrossRefGoogle Scholar
Colander, D. (2005), ‘The Future of Economics: The Appropriately Educated Person in Pursuit of the Knowable’, Cambridge Journal of Economics, 29 (6): 927–941.CrossRefGoogle Scholar
Colander, D., Holt, R. and Rosser, B. Jr., (2004), ‘The Changing Face of Mainstream Economics’, Review of Political Economy, 16 (4): 485–499.Google Scholar
Davis, J. B. (2007), ‘The Turn in Economics and the Turn in Economic Methodology’, Journal of Economic Methodology, 14 (3): 275–90.CrossRefGoogle Scholar
Dequech, D. (2002), ‘The Demarcation between the “Old” and the “New” Institutional Economics: Recent Complications’, Journal of Economic Issues, 36 (2): 565–572.CrossRefGoogle Scholar
Dixit, A., Grossman, G. M., and Gul, F. (2000), ‘The Dynamics of Political Compromise’, Journal of Political Economy, 108 (3): 531–568.Google Scholar
Fang, H. (2001), ‘Social Culture and Economic Performance’, American Economic Review, 91 (4): 924–937.CrossRefGoogle Scholar
Gintis, H. (2006), ‘The Evolution of Private Property’, Journal of Economic Behavior and Organization, 64 (1): 1–16.CrossRefGoogle Scholar
Glaeser, E. L. and Shleifer, A. (2003), ‘The Rise of the Regulatory State’, Journal of Economic Literature, 41 (2): 401–425.CrossRefGoogle Scholar
Groenewegen, J., Kerstholt, F., and Nagalkerke, A. (1995), ‘On Integrating New and Old Institutionalism: Douglass North Building Bridges’, Journal of Economic Issues, 29 (2): 467–476.CrossRefGoogle Scholar
Grossman, G. (1986), ‘Strategic Export Promotion: A Critique’, in Krugman, P. R. (ed.), Strategic Trade Policy and the New International Economics, Cambridge, MA: MIT Press.Google Scholar
Guiso, L., Sapienza, P., and Zingales, L. (2006), ‘Does Culture Affect Economic Outcomes?’, Journal of Economic Perspectives, 20 (2): 23–48.CrossRefGoogle Scholar
Hanssen, F. A. (2004), ‘Is there a Politically Optimal Level of Judicial Independence?’, American Economic Review, 94 (3): 712–729.CrossRefGoogle Scholar
Hess, G. D. and Orphanides, A. (2001), ‘War and Democracy’, Journal of Political Economy, 109 (4): 776–810.Google Scholar
Hodgson, G. (1988), Economics and Institutions, London: Polity Press.Google Scholar
Hodgson, G. (1999), ‘Structures and Institutions: Reflection on Institutionalism, Structuration Theory, and Critical Realism’, presented at EAEPE conference, Prague.Google Scholar
Hodgson, G. (2007), ‘Evolutionary and Institutional Economics as the New Mainstream?’, Evolutionary Institutional Economics Review, 4 (1): 7–25.CrossRefGoogle Scholar
Hughes, R. I. G. (1997), ‘Models and Representation’, Philosophy of Science, 64, Supplement, Proceedings of the 1996 Biennial Meetings of the Philosophy of Science Association, Part II: S325–S336.CrossRefGoogle Scholar
Langlois, R. (2003), ‘The Vanishing Hand: The Changing Dynamics of Industrial Capitalism’, Industrial and Corporate Change, 12 (2): 351–385.CrossRefGoogle Scholar
Maskin, E. and Tirole, J. (2004), ‘The Politician and the Judge: Accountability in Government’, American Economic Review, 94 (4): 1034–1054.CrossRefGoogle Scholar
McCleary, R. M. and Barro, R. J. (2006), ‘Religion and Economy’, Journal of Economic Perspectives, 20 (2): 49–72.CrossRefGoogle Scholar
Milberg, W. (2009), ‘The New Social Science Imperialism and the Problem of Knowledge in Contemporary Economics’, in Gudeman, S. (ed.), Economic Persuasions, Oxford: Berghahn Books.Google Scholar
Moore, B. Jr., (1966), Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World, Boston: Beacon Press.Google Scholar
Murphy, K. M. and Shleifer, A. (2004), ‘Persuasion in Politics’, American Economic Review, 94 (2): 435–439.CrossRefGoogle Scholar
North, D. (1990), Institutions, Institutional Change and Economic Performance, Cambridge, UK: Cambridge University Press.Google Scholar
North, D. (1991), ‘Institutions’, Journal of Economic Perspectives, 5 (1): 97–112.CrossRefGoogle Scholar
Rodrik, D. (1999), ‘Democracies Pay Higher Wages’, Quarterly Journal of Economics, 114 (3): 707–738.CrossRefGoogle Scholar
Rodrik, D., Subramanian, A. and Trebbi, F. (2004), ‘Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development’, Journal of Economic Growth, 9 (2): 131–165.Google Scholar
Sethi, R. (1996), ‘Evolutionary Stability and Social Norms’, Journal of Economic Behavior and Organization, 29 (1): 113–140.Google Scholar
Solow, R. M. (1997), ‘Is There a Core of Usable Macroeconomics We Should All Believe In?’, American Economic Review, 87 (2): 230–232.Google Scholar
Spiegler, P. (2005), ‘A Constructive Critique of Economics’, doctoral dissertation, Harvard University.Google Scholar
Veblen, T. (1919), ‘Why Is Economics Not an Evolutionary Science?’, in Veblen, T., The Place of Science in Modern Civilization, New York: Cosimo.Google Scholar
Williamson, O. (1975), Markets and Hierarchies: Analysis and Antitrust Implications, New York: The Free Press.Google Scholar
Williamson, O. (1985), The Economic Institutions of Capitalism, New York: The Free Press.Google Scholar
Williamson, O. (2000), ‘The New Institutional Economics: Taking Stock, Looking Ahead’, Journal of Economic Literature, 38 (3): 595–613.Google Scholar