Most American police departments claim to practice community-oriented policing (COP). The stated goals are to build partnerships between the police and the community, maintain order and quality of life, and solve problems that contribute to crime and fear of crime. However, researchers have noted how most departments attempting to implement COP have fallen short in successfully adopting the recommended reforms. This paper argues that the institutional setting in which American public policing operates leads to this result. By contrast, the institutional features of private security make its operation more conducive to achieving the goals of COP. These institutional differences include whether economic calculation is possible, the domain that is policed, and which rules are enforced.

In his important article, Benito Arruñada draws out the significance of sequential exchange for property rights and traces inadequacies in the economics of property rights to its overly contractual focus, to the exclusion of multiple transactions on the same asset. In this comment, I argue that although Arruñada's problem is a genuine one, it is part of a larger inadequacy in the economic analysis of property rights: property institutions have to manage complexity stemming from many kinds of interactions, making it problematic to focus solely on local interactions. Modular structures in property, including legal ‘things’ themselves, serve to manage this complexity. The larger problem of complexity allows us to set sequential exchange in its proper context.

Institutions influence and shape behaviour. This paper suggests one way in which they do so that has been largely overlooked in institutional analysis and design. When faced with a decision or problem, people have more than one mechanism at their disposition for addressing it. The human mind offers multiple tools, ranging from conscious deliberation to spontaneous, affective reactions. Relying on technology or experts, decision-makers can also muster additional resources. Often, the meta-choice of which decision-making or problem-solving mode is used has an impact on the output. Some normative goals are more likely met if the decision-maker uses a specific problem-solving mode. We argue that the meta-choice of which problem-solving mode to use for a given decision can be influenced by institutions. In the interest of defining access points for institutions, we develop a conceptual framework for the selection and implementation of decision-making and problem-solving modes.

Theories of competitive federalism generally focus on exit as the principal mechanism for making governments responsive to the interests of those who are subject to their powers. This paper draws attention to the fact that democratic governments act in two distinguishable roles, as ‘territorial enterprises’ and as ‘club enterprises’. As territorial enterprises they define and enforce the rules and terms that apply to everybody, whether citizen or alien, who resides and/or operates within their jurisdictional boundaries. As club enterprises, they define and enforce the rules and terms of membership in the respective polity. The focus of this paper is on the implications of the fact that ‘exit’ means something different when one looks at governments’ role as territorial enterprises (exit = leaving the territory) in contrast to their role as club enterprises (exit = giving up one's membership status/citizenship).

The incremental reform hypothesis implies that constitutions are rarely adopted whole cloth but instead emerge gradually from a series of reforms. The starting point, scope for bargaining, and number of reforms thus jointly determine the trajectory of constitutional history. We test the relevance of this theory for Africa by analysing the formation and reform of the independence constitutions negotiated and adopted during the 1950s and early 1960s. We provide historical evidence that independence occurred in a manner consistent with the incremental reform hypothesis. After independence, constitutional bargaining continued, although the alignment of interests inside and outside government initially favoured illiberal reforms. Liberal trends re-emerged a few decades later. We provide statistical evidence of incremental reform during both post-independence sub-periods. In general, the African countries that experienced the fewest constitutional moments and the narrowest domain of bargaining in the first decades of independence tend to have better contemporary institutions than states that began with less restrictive constitutional rules and experienced more constitutional moments.

Gas sector liberalization is based on opening networks to different players, so they become common pool resources. Different players using the same resources can give rise to “commons’ dilemmas”. To avoid them, rules must be established to constrain players’ use of the network. We build on the concept of common's pool resources to analyze the logic for and consequences of different institutional settings governing the use of gas pipelines. We show that rules based on regulation imply ex ante decisions that preclude players to choose the preferred output. This limitation may be removed by rules designed by market players. We also show that the mechanism to define the rules is based on the definition of network use property rights. The practical implications of our approach are stressed by comparing the US mechanism (negotiated rules) and the EU mechanism (regulated rules).

In developing countries, lack of formal contract enforcement mechanisms is compensated by informal governance enforced through trust, kinship, reputation, etc. This paper focuses on one such setting in India's urban informal economy: the ‘day labour’ market for casual labour. We survey seven such markets in Navi Mumbai (a city on the outskirts of Mumbai), and find considerable incidence of contract enforcement problems in the form of employers reneging on wage payments to labourers. We find that payments to labourers with access to social networks and a record of work done are less likely to be reneged. Further, consistent with the literature on the limits of informal enforcement, we find that labourers in large markets, with greater linguistic and caste-based diversity, are more likely to be reneged. We argue that interventions aimed at facilitating access to formal mechanisms might help overcome some of the limitations with informal enforcement.

In relation to Keynes's thought on general theorising, consumption theory and institutions, this paper closely examines Geoff Hodgson's views as set out in his magisterial work, How Economics Forgot History. While in full agreement with its advocacy of the institutionalist programme, it finds that Keynes's position has been misunderstood in all three areas, and that deep compatibilities exist between the General Theory and institutionalist analysis. Using all his available writings, it is argued that Keynes's conception of a general theory is very different from that underpinning neoclassical economics so that criticisms of the latter are irrelevant to the former, that Keynes's ‘fundamental psychological law’ was never advanced as a universal law applicable to all economies, and that Keynes expressly analysed a historically specific economic institution and its assemblage of sub-institutions. Keynes is an ally, not an enemy, of institutionalism in pursuing better economic theory.

This paper engages in a comparative-institutional analysis of the private and public risk-management programs of the drug isotretinoin, which are designed to prevent the undesired effects isotretinoin has on fetal development. This case study sheds light on the comparative effectiveness of private and public regulation in the pharmaceutical and healthcare markets. A range of evidence indicates that the private risk management program successful in reducing pregnancies and educating patients about the harmful effects isotretinoin can have on a fetus. These findings challenge a consensus found in the medical literature that the private program needed to be supplanted and contain implications for future risk-management policy in healthcare.

How can we account for the persistence of inefficient policies? To answer that question, this paper focuses on the issue of food and energy subsidies in Egypt. In 2012, over 13 percent of Egyptian GDP – roughly one-third of the overall government spending – was allocated to subsidies of prices of consumer goods including fuels and food. This paper offers an explanation of the resilience of commodity subsidies to reform, which relies on the inability of the government to credibly commit to a reform path. As a dictatorship, Egypt had a small number of veto players, making policy reversals easy. When opened to a competitive political process after 2011, Egypt lacked political groups that could make credible promises about policy changes. The paper provides a discussion of how appropriately designed reforms can mitigate the lack of credibility.

We examine the history of the organization of the Irish Republican Army (IRA) and assess whether Republican terrorism reflected the possession of valuable group-specific human capital within the terrorist cell. The analysis is motivated by economic models of the formation of specialized groups. We also note the public-goods co-ordination problem facing terrorist groups, given their inability to use mainstream enforcement mechanisms. Of particular interest are four well-defined historical examples of factionalism within the IRA. The history of Irish republicanism is consistent with the prediction that increasing the opportunities for cell members outside of life in the organization, particularly through amnesty, destabilizes the organization but leaves a hardcore of remaining terrorists. The gap between terrorist characteristics and those belonging to members of wider society is more gradated than predicted.

Major shifts in thinking among economists and other social scientists in recent years have prepared the ground for the launch of the Journal of Institutional Economics. Within economics, for example, after a period of neglect from the earlier to the later decades of the twentieth century, the study of the nature and role of institutions has become a central topic. Explanations of economic growth and development used to focus on inputs, production functions, and outputs, often neglecting the institutional structures that constrain or empower individuals, and frame their incentives and disincentives. Accordingly, for a long time the firm was treated as a ‘black box’, with little regard to the structural determinants of its existence, boundaries, and performance. However, the study of the firm changed dramatically in the 1970s when Oliver Williamson, building on the earlier work of Ronald Coase and others, opened the black box to investigate the firm as an institution. Similarly, in a pioneering series of works, Douglass North has investigated the role of institutions in the historical development of the modern capitalism. There are many other examples of important achievements in this area, too numerous to mention here. The outcome is that institutions have become a central topic of analysis for economists.

Benito Arrunãda's paper on the transaction cost problems involved with land, provides an excellent explanation of land legal institutions. This explanation revolves around the fact that land exists through time, and that various exchanges made with respect to land at one time affect exchanges in other times. Arrunãda refers to this as ‘sequential exchange’, and he argues that sequential exchange provides the explanation for state involvement in titling and the default nature of in rem rights. Unfortunately, Arrunãda frames his argument with an inappropriate notion of transaction costs. This creates a confusing language, and a faulty interpretation of Coasean logic. Reframing the first sections of his paper using the ‘property rights’ definition of transaction costs brings brevity and clarity to the ultimate point he is trying to make.

In this paper a sophisticated conception of individuality is developed that extends beyond simple heterogeneity and is consistent with the approach of institutional economics. Studies of human biological and psychological development are used to illustrate the foundations of human individuality and the impact of the social environment on individual development. The link between the social environment and ongoing agential properties is established through the role of habits, which provide some continuity to individual personalities over time and assist them in navigating the social context they inhabit. Reflexivity is established via an agency-structure framework that endows individuals a changeable self-concept and an ability to interpret their relationship to the social context. The coordination of different individuals is explained not simply through reference to institutional structure, but also through the agent-level properties of shared habits. While reducing differences between individuals to one of degrees, shared habits are shown to be particularly important in the context of agent-sensitive institutions. Finally, the potential for different institutional experiences to impact the reflexivity of individuals is explored.

This article argues for the need for the empirical analysis of how firms manage repugnance and core-stigmatization. To develop our empirical perspective, we compare the work on repugnance with the existing empirical literature in management on core-stigma and argue that core-stigmatization results from the mobilized repugnance. The core-stigmatized firm faces higher transaction costs. We demonstrate, through a case-study of the strategies of MindGeek/Pornhub in the online pornography market, how transaction costs economics can explain the choice of strategies to deal with core-stigma. Under most conditions, the increased transaction costs lead to vertical and lateral integration of the firm. In a dynamic setting, rival firms might use stigmatization to prevent the entry of a new competitor. Our second case-study on the early decades of the mail-order company Sears, Roebuck, and Company illustrates that repugnance, including racial discrimination, was mobilized by competitors to block the entry of the firm into the market.

Does innovation proceed from the top down or the bottom up? This is a crucial question for those who think about the sources of economic growth and especially for those who think about policies and institutions to promote innovation. The answer lies in part with the structure of the existing system of production and the array of assets that an innovation would displace, especially on the extent of complementarity and modularity in that structure. But it also depends on institutions. This paper argues for the centrality of decision rights to the process of innovation. Especially if it takes place in a systemic, non-modular way, innovation may require unified decision rights, often implying integrated control of complementary stages of production, in order to overcome the dynamic transaction costs of change. But the processes of subdivision, differentiation, and learning – the processes of fission, forking, and fine tuning – may also require changes in decision rights in order to overcome dynamic transaction costs. I illustrate these points with a case study of three generations of an American family of inventor-entrepreneurs in electricity and electronics.

In this paper, we present results from of a large-scale replication of Hodgson and Rothman's (1999, The Economic Journal, 109(453): 165–186) seminal analysis of the institutional and geographical concentration of authors publishing in top economic journals. We analyze bibliometric data of more than 49,000 articles published in a set of 30 highly influential economic journals between 1990 and 2018. Based on a random sample of 3,253 authors, we further analyze the PhD-granting institutions of the authors under study to better scrutinize the claim of an ‘institutional oligopoly’. The findings confirm the long-term persistence of strong oligopolistic structures in terms of both, author affiliations as well as PhD-granting institutions.

Robert Neild (born 1924) has made a major contribution to economics and to peace studies. This paper provides a brief sketch of Neild's life and work. While noting his research in economic policy and peace studies, this essay devotes more attention to his largely unnoticed contributions to institutional and evolutionary economics since 1984. These are important in their own right, but they are especially notable because Cambridge heterodox economists have been devoted mainly to other approaches, including Marxism and post-Keynesianism. Neild's distinctive contribution is partly explained by his closeness to both Nicholas Kaldor and Gunnar Myrdal. Myrdal made explicit his adherence to the original American institutionalism: Neild extended that link to Cambridge.

Regardless of the historical evolution of money, some passages of Aristotle's works shed light on its meaning and nature. This paper will attentively consider these passages. The first section presents Aristotle's thoughts on money. While the second section analyses money as a unit of measurement, the third section deals with its conventional nature, and the fourth draws from the theories of signs elaborated by John Poinsot and Charles Peirce to expand the explanation of the nature of money as a sign. The conclusion considers three levels of consideration of money based on Aristotle's thoughts: (1) universal abstract money, (2) instantiated in specific currencies, and (3) the actualization of their properties and potentialities in actual economic dealings.