We begin with a process-oriented model of science according to which signals concerning scientific reputation serve both to coordinate the plans of individuals in the scientific domain and to ensure that the knowledge that emerges from interactions between scientists and the environment is reliable. Under normal circumstances, scientific order emerges from the publication–citation–reputation (PCR) process of science. We adopt and extend F. A. Hayek's epistemology according to which knowledge affords successful plan-based action and we employ this in the development of an epistemic theory of social order. We propose that external interferences with the PCR process have distorting effects on scientific knowledge and, thus, on scientific and social order more broadly. We support this claim by describing the history of the US federal government's development of standardized dietary guidelines for American consumers and its concomitant interference in the PCR process of nutritional science. We conclude that this interference contributed to social disorder in dietary science and beyond.

This paper highlights a link between measures for precolonial institutions and ethnic fractionalisation in postcolonial countries. A conceptual explanation is provided for why countries that were more politically centralised in precolonial times should be less ethnically fractionalised in current times. This result is confirmed for a sample of postcolonial countries in Africa, Asia and the Pacific. This is followed by a comparative case study in the South Pacific countries of Papua New Guinea, Tonga and Samoa. It is hoped that these results will lead to further empirical work focused at delving deeper into the link between these two measures to better understand what they are actually measuring, and why both are so closely related to economic development.

This article builds on a legal institutionalist approach to assess market-based regulatory change in British television production over the last three decades. It explores how formal rules governing television production constitute market relations, and whether these rules are likely to be evaded by television producers and commissioners in a context where contracting depends heavily on social norms of cooperation, reciprocity and flexibility. Using qualitative data, this article suggests that changes in law and terms of trade intended to promote a market in television production have not had a straightforward or linear effect: compulsory independent production quotas and licensing models of terms of trade have redrawn organizational boundaries in unexpected ways, disturbed the public service remit and engendered new financial flows. Formal rules were nonetheless central to the trajectory of the television production industry, as they were a constitutive element of changes in the power structure of the sector towards producers’ interests.

The article provides an overview on the emergence of dispute resolution institutions in society and market, their pivotal role and their impact on the human activities. It introduces then recent researches conducted by a pool of scholars in order to advance the understanding of modern judicial institutions which represent the aims of this journal issue.

We investigate whether and how economic integration increases state capacity. This important relationship has not been studied in detail so far. We put together a conceptual framework that highlights what we call the Montesquieu, Weber and Smith channels to guide our analysis. Each of these corresponds to a series of mechanisms in three distinct institutional arenas: judiciary, bureaucracy and competition policy. To test our framework, we introduce a new panel of institutional reform measures that allow us to investigate how changes in these three arenas interact with each other and what sequence of changes yields increases in state capacity. The yearly data set covers all the 17 candidate countries to join the European Union (EU) after the 1995 enlargement. Deep integration, we find, can induce broad institutional change by providing incentives for simultaneous change in core state institutions. Bureaucratic independence and judicial capacity seem to be the key engine of the process engendered by the prospect of EU membership. Yet early and abrupt removal of external anchors might generate significant backsliding, or reversals, in domestic institutional change.

In the present paper we contribute to the previous literature on de facto enforcing mechanisms, by focusing on the role of judicial institutions and their performance and measurement. We propose both theoretical and empirical evidence supporting the necessity of a clear distinction between two measures of judicial performance, efficiency and efficacy, which have often been confused in previous literature. Not only might economic actors not be affected to the same extent by these two indicators, but we show that these measures do not even correlate significantly with each other. We also bring evidence against the alleged trade-off between the quality of justice and judicial performance in its quantitative dimension, showing that this relationship is much more complicated than is claimed by some legal scholars.

Since the early 1980s a wave of liberalizing reforms has swept over the world. Using panel data from 30 European countries in the period 1993–2015, we test the hypothesis that such reforms have led to voter dissatisfaction with democracy, since, it is argued, they have been undertaken in a non-transparent way, often during crises, and they have entailed detrimental consequences. The reform measures are constructed as distinct changes in four policy/institutional areas: government size, the rule of law, market openness, and regulation. Our results indicate that while reforms of government size are not robustly related to satisfaction with democracy, reforms of the other three kinds are – and in a way that runs counter to anti-liberalization claims. Reforms that reduce economic freedom are generally related to satisfaction with democracy in a negative way, while reforms that increase economic freedom are associated positively with satisfaction with democracy.

Nobel Laureate in Economic Sciences Elinor Ostrom's authoritative book Governing the Commons, published in 1990, and almost every other text she has published on the subject of the commons, strongly criticized Garrett Hardin's much-cited 1968 Science article “The Tragedy of the Commons.” Hardin's “tragedy” refers metaphorically to the eventual destruction of a commons as a result of collective overuse. Hardin claimed that statist solutions and privatization provisions are the only two policy means for addressing the tragedy. Ostrom explored user self-governance as a third alternative to avert the tragedy. Ostrom's exploration and her critical stance, however, have caused the misperception of her work as anti-Hardin, anti-tragedy, or more specifically, anti-statist and anti-privatization. This paper argues that despite Ostrom's clear criticism of Hardin's claim and her regard for user self-governance or community-based management, her work was not anti-statist or anti-privatization.

In the present paper we trace the development of property rights during the Hellenistic period (3rd–2nd centuries bce), focusing on Athens, the democratic Hellenistic federations and the Ptolemaic Kingdom in Egypt. Property rights had been already well developed and protected by courts and state laws during the previous Classical period in ancient Greece, but we argue that they further evolved during the Hellenistic period due to the introduction of a series of new political and economic institutions. We found that there was a causal relationship between the evolution of property rights and the further development of economic institutions in Hellenistic Athens and the Hellenistic federations. We finally argue that the development and adoption of market-oriented economic institutions by the Ptolemaic Kingdom should be attributed to the great influence that these institutions had in the entire Hellenistic world, which resulted in their diffusion from the democratic states to kingdoms.

Tolerance – respecting individual choice and differences among people – is a prominent feature of modern European culture. That immigrants embrace this kind of liberal value is arguably important for integration, a central policy goal. We provide a rigorous study of what factors in the ancestral countries of second-generation immigrants – including formal and informal institutions – predict their level of tolerance towards gay people. Using the epidemiological method allows us to rule out reverse causality. Out of the 46 factors examined, one emerges as very robust: a Muslim ancestral background. Tolerance towards gay people is lower the larger the share of Muslims in the country from which the parents emigrated. An instrumental-variable analysis shows that the main mechanism is not through the individual being a Muslim, but through the individual being highly religious. Two additional attitudes among people in the ancestral country (valuing children being tolerant and respectful, and valuing children taking responsibility), as well as impartial institutions in the ancestral country, predict higher individual tolerance. Our findings thus point to an important role for both formal- and informal-institutional background factors in shaping tolerance.

By analyzing the population growth at the top of the urban hierarchy, we test two hypotheses explaining the rise of mega-cities: trade and political institutions. We find that democratic institutions are the main factor behind the concentration of a nation's urban population in the main city. Contrary to the literature, we find that extractive institutions reduce the size of the biggest city.

We develop a framework for understanding how legal structures relate to imprisonment. We hypothesize that relatively more hierarchy within criminal justice institutions, compared to commercial law, fosters higher rates of incarceration. Our framework predicts that incarceration reflects asymmetric opportunities for rent seeking across differently organized legal institutions. Instead of comparing criminal justice institutions across nations in absolute terms, we investigate the relative degrees of institutional centralization across legal spheres. To provide support, we document the separate historical experiences that shaped divergent organizations across England and France. Within each country, criminal legal institutions developed inverse organizational traits from commercial legal processes. As a result, the contrasting organizations created asymmetric opportunities for rent seeking. Divergent contemporary outcomes can be understood by recognizing these initial organizational choices, the relative opportunities they created, and their subsequent path dependencies. We document contemporary England, France, and the United States’ incarceration trends and penal outcomes to provide empirical support.

It has been an enduring concern of institutional economics and critical realism to understand how individuals are able to exercise agency in the context of social structures, and to maintain appropriate connections, separations and balances between these two levels of causal power. This paper explores the contribution of Alasdair MacIntyre's neo-Aristotelian philosophy to the topic. Empirical data are provided from the career narratives of senior Scottish bankers recalled in the aftermath of the global financial crisis of 2007/8. The method of the study is interpretive, using themes drawn from MacIntyre's writings. These bankers faced moral choices as tensions developed between their own professional standards and the new corporate goals of the banks. We discuss MacIntyre's understanding of individual moral agency as a narrative quest in the context of different types of institution with different and often conflicting ideas about what constitutes good or right action. Habituation and deliberation are important in enabling action, but fully developed moral agency also depends on individuals being able to make choices in the space opened up by tensions within and between institutions.

The prosecution of criminal suspects is an integral part of a country's justice system. While substantial scholarly attention has been devoted to the study of the police and judges and their relevance to the rule of law, surprisingly little is known about prosecutors. The aim of this paper is to contribute towards filling this knowledge gap. We first demonstrate the rising importance of prosecutors in criminal justice systems around the world. We identify the independence of prosecution agencies from the other two branches of government as a centrally important characteristic and then proceed to analyse the determinants of de facto prosecutorial independence from a political economy perspective. We find that press freedom, the immunity of parliamentarians and belonging to the common law tradition are positively associated with higher de facto independence.

This paper analyses the relationship between informal institutions measured by social trust and the provision of private credit. Research on the trust–finance relationship abounds, although most of it is confined to the micro-level, with far fewer contributions from a wide, cross-country perspective. Considering a sample of 119 economies in the period 1993–2015, results suggest that social trust is an important determinant of private credit, and that its effects are transmitted indirectly via some particular aspects of the quality of economic-judicial institutions. In addition, and contrary to previous findings in related areas, substitutive effects for informal and formal institutions are not found. Therefore, informal institutions can improve the quality of the certain types of formal institutions but they are, per se, unable to replace them in the provision of credit. Accordingly, a solid economic-judicial system becomes essential to guarantee credit transactions.

Frank A. Fetter is often classified as an American representative of the Austrian school, yet surprisingly, there is practically no published record of his views of the Austrians or theirs of him, and there is no indication that he ever seriously interacted with them after the First World War. However, Fetter enjoyed many personal and professional relationships with the Austrians, and they shared a reciprocal influence on each other's ideas that deeply influenced their respective research programs. This paper draws on unpublished archival records to explore Fetter's unique place in the history of economics, in particular, his positive and negative interactions with the leading individuals and institutions of the Austrian school. Their half-century of influence sheds light on Fetter and his role in American economics, but also brings to light a wide range of information about the lives, works, and personal relations of the Austrians that have not been included in their biographies or institutional histories.

In this paper, we develop a framework to analyze the relationship between evidence and policy. Postulating a normative criterion based on cost–benefit analysis and the value of a piece of information, as well as a topology of the policy space defined by three characteristics (epistemic uncertainty, interests, and the degree of value conflicts), we identify the (Nash) equilibria of an interaction between experts and citizens in providing information to a decision maker. In this setup, we study three institutional arrangements (evidence-based policy, deliberative governance, and negotiated conflict) that differ in terms of reliance on experts and citizens for providing information. We show that different degrees of uncertainty, interests, and value-relevance surrounding the issue at stake result in vastly different arrangement performances; hence, to foster efficiency, rules should be contingent.

Along with introducing democracy, advancing philosophy and excelling at the arts, during the period 800–300 bce ancient Greece achieved substantial economic prosperity. Recent literature attributes the efflorescence to the institutions and culture of democratic city-states. However, the city-states failed to initiate sustained growth. Technological progress remained slow and the economic efflorescence ended after the prevalence of Macedon and the subsequent Roman conquest. The present study scrutinises the roles of city-state institutions and culture. It shows that ultimately ancient Greece could not sustain long-run growth because a multitude of independent small city-states prevented the exploitation of economies of scale and stoked continual wars that exhausted them financially and militarily, and because of a culture valuing landholding, self-sufficiency and collectivist attitudes.

This paper aims to evaluate the impact of Italy's unification on its economic growth from 1861 to the outbreak of World War II. This historical analysis attempts to prove that the process of legislative harmonization intrinsic to the unification had a positive effect on Italy's GDP because legislative uniformity facilitates economic transactions. Moreover a uniform and more effective legislation would have caused less litigation and therefore favoured economic growth, thanks to smoother relations between economic agents.

Does ‘inner competition’ – rivalry among network members – worsen performance in a network of cooperative banks? By weakening the functionality of the network, inner competition might, in fact, endanger network-dependent scale economies. Testing our hypothesis on Italy's network of mutual cooperative banks (Banche di Credito Cooperativo – BCCs), we find a worsening of performance of both incumbents and (even more) aggressors when BCCs compete among themselves. However, the worsening is mild when BCCs compete with comparable non-mutual banks external to the BCC network. We conclude that inner competition among cooperative banks is a negative sum game and, thus, limiting it would be desirable to preserve the stability of cooperative banking networks.