r/NewInstitutional

38 archived posts · Dec 2012 – Apr 2024

New Institutional Economics

r/NewInstitutional

New Institutional Economics (NIE) incorporates a theory of institutions - laws, rules, customs, and norms - into economics. It builds on, modifies, and extends neoclassical theory. It retains and builds on the fundamental assumption of scarcity and hence competition - the basis of the choice theoretic approach that underlies microeconomics.

Created Dec 17, 2012

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38Archived posts

Welcome to r/NewInstitutional!

New Institutional Economics (NIE) incorporates a theory of institutions - laws, rules, customs, and norms - into economics. It builds on, modifies, and extends neoclassical theory. It retains and builds on the fundamental assumption of scarcity and hence competition - the basis of the choice theoretic approach that underlies microeconomics.

It has developed as a movement within the social sciences that unites theoretical and empirical research examining the role of institutions in furthering or preventing economic growth. It includes work in transaction costs, political economy, property rights, hierarchy and organization, and public choice. It involves work in political science, law, sociology, anthropology, and other social sciences.

Click here for a glossary

Click here for an introductory reading list

Key Thinkers:
Steven N. S. Cheung
Ronald Coase (Nobel Laureate)
Harold Demsetz
Avner Greif
Claude Menard
Douglass North (Nobel Laureate)
Elinor Ostrom (Nobel Laureate)
Oliver Williamson (Nobel Laureate)

Ostrom's design principles:
Clearly defined boundaries
Congruence between appropriation and provision rules and local conditions
Collective-choice arrangements allowing for the participation of most of the appropriators in the decision making process
Effective monitoring by monitors who are part of or accountable to the appropriators
Graduated sanctions for appropriators who do not respect community rules
Conflict-resolution mechanisms which are cheap and easy of access
Minimal recognition of rights to organize (e.g., by the government)
In case of larger CPRs: Organisation in the form of multiple layers of nested enterprises, with small, local CPRs at their bases.

External Links:
ISNIE | International Society for New Institutional Economics
The Ronald Coase Institute

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