Institutional Economics

The Portuguese debt crisis: institutional tangles and the EU metabolic trap

by Gualter Barbas Baptista

Published on Ecología Política 42 (http://ecologiapolitica.info), Spanish translated: "La crisis portuguesa de la deuda: los enredos institucionales y la trampa metabólica de la UE"

Portugal is one of the most affected countries in the debt crisis. The majority of policies set in motion (by government... more Portugal is one of the most affected countries in the debt crisis. The majority of policies set in motion (by governments of both parties in central axis, as well as by the Troika formed by the IMF, ECB and European Commission) aim at creating favorable conditions to attract foreign investment (for example through so­ called labour flexibilization) or reducing public expenditure in order to pay off the growing debts (with increasing interest rates). However, they are far from achieving the necessary economic growth to repay these debts. In fact, rather than providing a solution to the debt crisis, they are actually degrading the social conditions and depleting the material support of the economy. Overviewing the metabolic history of the Portuguese economy in the recent decades and unfolding the tangled web of public private institutional relations, might provide better answers in dealing with the crisis. Proper answers can hardly rely on the promotion of economic growth, a flag which, until now, has been held from the left to the right of the Portuguese political spectrum.

Water Governance: Critique, theory and evidence from Asia

by Eduardo Araral

Finalist, 2010 Suez International Water Prize
Cited by President of National University of Singapore as an example of research which "advances knowledge and solves societies' problems."

Most scholars agree that improving water governance is the key to addressing water insecurity in developing countries.... more Most scholars agree that improving water governance is the key to addressing water insecurity in developing countries. However, in the last decade, not much progress has been achieved in terms of substantive theoretical, methodological and empirical contributions and much less policy impact. We argue that there is a need for a second-generation research agenda on water governance that is theoretically coherent, analytically robust, empirically grounded and policy relevant. We demonstrate this with a comparative study of water governance in Asia-Pacific based on a survey of 100 water experts from 20 countries in the region. We find that developed and developing economies have statistically significant variations in their water governance arrangements, which suggests the equivalent of a water Kuznets curve. We find that top countries with the highest governance scores differ significantly from the bottom ones in terms of legal accountability of water sector officials, pricing policy, linkage between water law and water policy, financing of water investments, functional capacity and balance, and accountability and regulatory mechanisms. We also find a statistically significant correlation with conventional measures of governance suggesting that, contrary to conventional wisdom, water governance reforms in developing countries is an evolutionary rather than a mechanical process of borrowing best practices from developed ones.

What Explains Collective Action in the Commons? Theory and Evidence from the Philippines

by Eduardo Araral

Linking institutions to economic performance: The role of macro-structures in micro-explanations

by Cyril Hédoin

published in the "Journal of Institutional Economics"

Did Veblen Generalize Darwinism (And Why Does It Matter)?

by Cyril Hédoin

published in the 'Journal of Economic Issues'"

Who to punish? Individual decisions and majority rule in mitigating the free rider problem

by Arhan Ertan

Determinants and economic consequences of colonization: a global analysis

by Arhan Ertan

ROLE OF ENDOGENOUSLY CHOSEN INSTITUTIONS ON MITIGATING THE FREE-RIDER PROBLEM AND REDUCING PERVERSE PUNISHMENT

by Arhan Ertan

Collective Intentionality in Economics: Making Searle Relevant for Game Theory

by Cyril Hédoin

Working paper

The Organisation of Markets as a Key Factor in the Rise of Holland, Fourteenth-Sixteenth Centuries. A Test Case for an Institutional Approach

by Jaco Zuijderduijn

Co-authored with Bas van Bavel, Jessica Dijkman and Erika Kuijpers
To be published in Continuity and Change

Although the importance of the institutional approach for understanding pre-industrial economic development is widely... more Although the importance of the institutional approach for understanding pre-industrial economic development is widely accepted, it has proven to be difficult to assess, let alone to quantify the effects of institutions on the functioning of markets in this era. In this paper we demonstrate to what degree our empirical research on the rise of markets in late medieval Holland can illuminate the factors behind the development of the specific institutional framework of markets for land, labour, capital and goods, and the effects of these institutions on the actual functioning of the markets. The findings are corroborated by a comparative approach focusing on Flanders and Eastern England: the parts of Northwest Europe where, next to Holland, economic development was most precocious. Both regions, however, were hit hard by the effects of the Black Death, whereas Holland after the mid-fourteenth century underwent remarkable further growth, even despite ecological difficulties. The favourable organisation of markets, enabled by an exceptional balance in Holland society, played a key role in this success

CONSUMER CULTURE AND ECONOMIC PERFORMANCE – THE ROLE OF THE INSTITUTION OF MARKETING

by Brendan Sheehan

A post-modernist view of global capitalism sees it divided into three systems. They are the system of scarcity... more A post-modernist view of global capitalism sees it divided into three systems. They are the system of scarcity populated by the people of poverty, the system of sufficiency experienced by those with just enough to make do, and the system of abundance experienced by, what Potter calls, the people of plenty.
This paper focuses on the system of abundance. The dominant economic problem in this system is not one of production or distribution but of demand. It is how to persuade the most affluent consumers of the globe – the people of plenty – to keep spending at ever higher levels.
The system of abundance spontaneously generates an institution of marketing that works to solve this problem. The mass messaging of the institution creates a consumer culture in which the people of plenty increasingly perceive themselves as consumer citizens with a shared morality of indulgence and a shared customer mindset. The institution is also the dominant driver of cultural change. The institution creates a “hot” culture of perpetual change to persuade affluent consumers to spend more.
When the work of the institution is successful is promoting ever higher consumer spending the performance of the system of abundance is good, and when it is less successful, as now, its performance is dire.

Pushing the boundaries of climate economics: critical issues to consider in climate policy analysis

by S. Serban Scrieciu

Published in Ecological Economics (in press, available online 17 November 2011).
- First author and co-authored with Terry Barker (Cambridge Centre for Climate Change Mitigation Research, University of Cambridge, UK) and Frank Ackerman (Stockholm Environment Institute - US Center)

Climate policy choices are influenced by the economics literature which analyses the costs and benefits of alternative... more Climate policy choices are influenced by the economics literature which analyses the costs and benefits of alternative strategies for climate action. This literature, in turn, rests on a series of choices about: the values and assumptions underlying the economic analysis; the methodologies for treating dynamics, technological change, risk and uncertainty; and the assumed interactions between economic systems, society and the environment, including institutional constraints on climate policy. We identify and discuss such critical issues, pushing at the boundaries of current climate economics research. New thinking in this area is gathering pace in response to the limitations of traditional economic approaches, and their assumptions on economic behaviour, ecological properties, and socio-technical responses. We place a particular emphasis on the role of induced technological change and institutional setups in shaping cost-effective climate action that also promotes economic development and the alleviation of poverty.

Analysing institutional arrangements for agrienvironmental schemes in Europe: ITAES WP4 Final Report

by Melf-Hinrich Ehlers

FARMERS'REASONS FOR ENGAGING IN BIOENERGY UTILISATION

by Melf-Hinrich Ehlers

“CATERPILLAR, INC. AND CATERPILLAR MEXICO, S.A. V. USINOR INDUSTEEL, USINOR INDUSTEEL (U.S.A.), INC. AND LEECO STEEL PRODUCTS, INC.”

by Abed El-azez Safi

The case application is CISG which applies to contracts between sellers and buyers. The CISG used the provision key of... more The case application is CISG which applies to contracts between sellers and buyers. The CISG used the provision key of Articles 4, 35 and cited to Article 36.
Usnior requested a meeting with Caterpillar to present new type of sales pitch steel called “Creusabro 8000” which was harder, stronger, welded, better and can stand the high heat. Based on these representations from Usinor, Caterpillar submitted proposals to its customers to manufacture dump trucks using the Creusabro steel. In later sales presentations, Leeco joined the Usinor. Caterpillar made some transactions to their customer in various locations in U.S. and negotiated with Usinor Industeel (Usinor), a French steel company, and its own Mexican subsidiary, Caterpillar, Mexico (hereafter CMSA) for the supply of steel to CMSA so that CMSA could use the steel in the manufacture of the truck bodies. Caterpillar also contracted for truck bodies manufactured with the Creusabro steel from an independent company called Western Technology Services International, Inc. (Westech) a compnay unrelated to Caterpillar.
Caterpillar subsequently delivered new trucks to its customers. There were no problems with the trucks delivered in the first shipment, but the bodies in several of the trucks delivered in subsequent shipments was cracked.
Accordingly, the case start to take place from defective steel supplied by Usnior to Caterpillar and truck bodies manufactured by Westech had the same defects as those manufactured by CMSA. In addition, the steel quality proved to be low quality and more difficult to use than CMSA had been led to believe it would be so CMSA incurred higher than expected costs in manufacturing the truck bodies.

Sistema financeiro e desenvolvimento: uma discussão teórica sobre bank-based, market-based e abordagem funcional

by Elson Rodrigo Souza Santos

Preliminary and incomplete version

Over time several authors have discussed how best to organize the financial system to promote growth of... more
Over time several authors have discussed how best to organize the financial system to promote growth of long-term cover and support the changes arising from development. The recurring debate about the structures and theoretical defenses of the bank-based system (based on financial intermediaries) and market-based (direct relationship between savers and borrowers of funds). More recently, the functional approach was added as a central point that puts the capacity of the financial system to support the productive sector and moving to the background structure. In this paper seek to present the theoretical aspects of these three visions highlighting the differences in the defense and criticism, but also seeking to compare the concentrations in common and how they can see the same problem through different perspectives.

Crise europeia, uniões monetárias e lições para Brasil

by Elson Rodrigo Souza Santos

Preliminary and incomplete version. Will be improved

In the early 2000s, the euro was rising a milestone in the consolidation of the European Union (EU) toward increased... more In the early 2000s, the euro was rising a milestone in the consolidation of the European Union (EU) toward increased integration. In alongside, the euro emerged as a potential competitor for the dollar as reserve currency in international arena. After a decade the economic and institutional problems were not solved, revealing weaknesses in the architecture of the EU and eurozone with American Crisis of 2008. However, even then, in Brazil are frequent official statements as President Lula about the importance of single money for the countries of South America on promote of regional integration. What’s looks like a political rhetoric than a realistic strategy towards integration.

The structural transformation of embeddedness

by Poul F. Kjaer

PP. 85 – 104 in Josef Falke, Christian Joerges (Eds.): Karl Polanyi, Globalisation and the Potential of Law in Transnational Markets (Oxford: Hart Publishing, 2011).

The concept of embeddedness plays a central role in the segment of economic sociology and social theory which is... more The concept of embeddedness plays a central role in the segment of economic sociology and social theory which is inspired by the works of Karl Polanyi. But to the extent that embeddedness is understood in a substantialist manner, implying the existence of a unitary lifeworld, the desire for embeddedness is an impossible aspiration under modern conditions. Throughout the modern era it is however possible to observe the emergence of complex societal stabilization mechanisms, which serve as substitutes to traditional forms of embeddedness. The emergence of function specific cultures, in the form of, for example, legal, political and scientific cultures, establishing a ‘second nature’ in the Hegelian sense, is one example of this. Other examples are (neo-)corporatist institutions which fulfilled a central stabilising role in classical modernity and the kind of network based governance arrangements which fulfil a similar position in today’s radicalised modernity.

A missing spatial link in institutional quality

by Fabio Manca

History tells that institutions evolve gradually over time, pushing new ideas across borders and cultures.... more History tells that institutions evolve gradually over time, pushing new ideas across borders and cultures. Globalization is argued to accelerate this process. We examine the spatial links of different political institutions across borders. Applying various tests for spatial proximity, we do not find evidence of contemporaneous spatial links. This result is robust to various measures of distance and of cultural proximity across countries. Instead, when we analyse long-run dynamics, diffusion of institutions seems to occur only gradually

Technology catch-up and the role of institutions

by Fabio Manca

Published in Journal of Macroeconomics

The aim of the paper is to investigate the effect of differences in institutional quality on the process of technology... more The aim of the paper is to investigate the effect of differences in institutional quality on the process of technology catch-up across countries. Empirical evidence shows that countries endowed with better institutions present higher TFP growth rates and faster rates of technology adoption and, as a result, are the ones that are more rapidly closing the gap with the frontier. Conversely, countries lacking a minimum institutional level diverge in the long-run and do not to catch up. Some institutions, however, play an ambiguous role in the creation and adoption of technology. We find that the tightening of Property Rights reduces the ability of followers to freely imitate technology thus slowing down their catch-up rate. This negative effect is stronger the farther away the countries are from the frontier. Other institutional categories such as openness to trade, instead, benefit both leaders and followers.