Send your good work in the knowledge base is simple. Use the form below

Students, graduate students, young scientists who use the knowledge base in their studies and work will be very grateful to you.

Posted on http://www.allbest.ru/

Subject and method of institutional economics

The main differences between the information economy and the industrial economy

Conclusion

Literature

Subject and method of institutional economics

institutionalism economics information industrial

The term "economics" is used to refer to two different concepts. Firstly, the economy is the sphere of social life in which goods are created, distributed and used, i.e. objects, necessary for a person for life and development.

In this case, the economy is an objective reality that does not depend on any subjective assessments. It is practical economics.

An integral element of practical economics becomes an economic phenomenon - a stable process that can be identified and studied by empirical methods (from the Greek empeiria - experience). The relationship between economic phenomena is subject to objective laws: physical, logical, mathematical, etc. Therefore, all economic phenomena related to one society and one period of time are consistent with each other and cannot contradict each other.

Secondly, economics is a science that studies the processes of creation, distribution and use of goods.

In this case, the economy is a product of consciousness, depending on unique personal qualities human, and therefore subjective in nature. It is theoretical economics, the object of its study is practical economics.

In theoretical economics, there are simultaneously theories contradictory friends to a friend. The theory that finds a significant number of supporters among economists and at the same time serves as the basis for creating a system of mutually consistent theories gives rise to an economic school. Examples of economic schools opposing each other are: classicists and socialists, Keynesians and monetarists, etc. Economic schools that have common basic principles form a direction in economic science. There are two main directions: liberal and social-institutional. The liberal direction includes physiocrats, classical political economy, Malthusianism, marginalism, neoclassical school, monetarism, economic imperialism, etc.

Towards the social-institutional direction - utopian socialism, Marxism, the historical school and institutionalism.

The empirical basis of each economic school is a certain economic phenomenon, which, according to adherents of this school, appears to be the most important, i.e., determines the functioning of the entire economic system. This phenomenon is called economic dominance. If a given economic phenomenon objectively plays a dominant role in practical economics, then the economic school usually occupies a dominant position in theoretical economics, that is, it becomes dominant. If over a long historical period successive ideas belong to one direction, then it becomes the dominant direction. In economic science, the liberal direction has been dominant for three centuries, so it is also defined as the mainstream. The economic dominant, common to all liberal schools, is expressed in the determining importance of the production of material goods, or industrial production. Therefore, the system of liberal economic theories can be characterized as the theory of industrial economics, or simply as industrial economics. In other words, industrial economics is the economic theory of industrial society. The industrial economy is considered to be a traditional economy.

Among the representatives of each economic school there are scientists who do not recognize the right to the existence of alternative economic theories and identify the name of their school with economic science as a whole. This tendency is most pronounced among supporters of the mainstream liberal movement. Thus, the term economics (from the English economics - economic theory), introduced by A. Marshall to designate neoclassical theory, is now often used as a synonym for economic science. At the same time, the economy is wrongfully identified with the industrial economy.

The stage of economic development is a historical period characterized by one dominant feature. At each stage, a dominant school develops, which has identified the dominant economic phenomenon as the empirical basis of its theories. The name of an economic school often contains an indication of the corresponding economic dominant, for example:

* mercantilism. This term is derived from English word merchant, meaning "merchant". The economic dominant is the formation of markets, expansion of trade. The heyday of this school was the 17th century;

* physiocracy translated from Greek as “power of nature.” The economic dominant is the predominance of agricultural labor. Heyday - second half of the 18th century, France;

* classical school built on the postulate of labor value, which affirms physical labor as the only source of value. The economic dominant is the predominance of physical labor and manufacturing production. Heyday - second half of the 18th - first half of the 19th century, England.

Institutional economics is a theory in which empirical basis, or economic dominant, is the institution - a historically established social tradition.

The founder of the school of institutionalism is the American economist and sociologist T. Veblen (1857 - 1929), who outlined the main ideas of the school in his book “The Theory of the Leisure Class”. Institutional economics originated in late XIX century, when in advanced countries cultural factors began to have an increasingly noticeable influence on the economy, and the postulates of the industrial economy corresponded less and less to the realities of social life. It became obvious that the transition of society from the industrial stage of development to a new stage, which has not yet received a generally accepted name, has begun. The new society is defined as:

* new industrial (J. Galbraith),

* post-industrial (D. Bell),

* Third Wave society (E. Toffler),

* risk society (W. Beck),

* informational (M. Castells),

* individualized (3. Bauman).

Institutionalists who adhere to the information approach to defining an institution characterize the new economy as informational. At the same time, the institution is considered as specific knowledge, and its influence on the economic life of society is considered as a specific information process.

The main differences between the information economy and the industrial economy

Let's compare the main provisions of the industrial (traditional) economy and the information economy that is replacing it.

1) Product. The dominant type of product in an industrial society is a material object, and in an information society it is an information object devoid of material form.

2) Work. The dominant type of labor in an industrial society is simple (physical, manual, routine, unskilled) labor, which is recognized as productive labor. At the same time, creative work is considered unproductive. In the information society, on the contrary, creative work dominates. It is considered productive, and simple labor is considered unproductive.

3) Capital. The dominant type of capital in an industrial society is materialized (external) capital: buildings, machines, machines, etc. In the information society, the most important role is played by intellectual (internal) capital, i.e. education, experience, health, etc. The first theory of internal capital is theory of human capital by the American economist G. Becker.

Table 1 - Institutionalism as a stage of development of economic science

Economic phenomenon	Economic theory	Head of the school
Formation	Mercantilism	A. Montchretien
Domination agricultural real labor	Physiocracy		Second half of the 18th century.
Domination manual labor	Classical school		Second half XVIII century -- first half of the 19th century
Market crisis	Marxism		Mid-19th century
Increasing consumption	Austrian school	K. Menger	Second half
Self-regulation economy	Neoclassical school	A. Marshall	Second half
Cultural influence on the economy	Institutionalism	T. Veblen	End of the 19th century -- beginning of the 20th century
State intervention	Keynesianism	J. Keynes	Mid-20th century

4) Wealth. In an industrial society, wealth is understood as belonging to a person material values, such wealth is external to a person. Physical capital is an integral part of material wealth. In the information society, wealth is understood as the internal wealth of a person - the system of his personal qualities. Human capital is an integral part of internal wealth. External wealth can be alienated from a person, internal wealth cannot.

5) Value. In an industrial economy, the social value of a good is determined by its market price, that is, the ability of the good to increase a person’s material wealth. In the classical school, which forms the basis of the theory of industrial economics, value appears as labor value. It is equal to the amount of simple labor expended on the manufacture of the product. In the information economy, the social value of a good is determined by its ability to increase the duration of higher human activity.

6) Needs. In the theory of industrial economics, consumption is understood as the intended use of a material product. Therefore, needs are grouped based on the classification of material goods. It is argued that a person has many needs, each of which is assigned to a certain class of goods: the need for food, clothing, housing, etc. In the theory of information economics, consumption is understood as the use of a product (material or informational) in order to expand the sphere of higher activity.

7) Welfare. In an industrial society, human well-being is measured by the flow of material wealth (money income), and social welfare is measured by the amount of national income over a certain period of time. Material well-being is also called economic well-being. The theory of economic welfare was created by the English economist A. Pigou (1877 - 1959). In the information society, human well-being is measured by the flow of creative benefits (periods of creativity), and social well-being is measured by the total duration creative activity all members of society for a specific period of time. Well-being is called creative.

8) Money. In an industrial society, wealth takes the form of money, so money serves ultimate goal economic activity of economic entities. In the information society, the ultimate goal of a person is higher activity, and money acts as a means of increasing creative well-being.

9) Social interactions. In any society, the functioning of the economy is based on social interactions - joint social actions of individuals, as a result of which their well-being changes. In an industrial society, interactions in the form of commodity exchange dominate - impersonal and mediated by monetary circulation. The information society is dominated by social interactions in the form of information exchange of products of creative work. These interactions are interpersonal in nature and are divided into direct (for example, communication) and mediated by cultural institutions (for example, writing a book).

10) Human model. The theory of industrial economics is based on the model of “economic man,” and institutional economics is based on the model of “institutional man.”

Table 2 - Information economy and industrial economy

	Economy
	industrial	informational
	Material	Informational
		Creative
	Physical	Human
Wealth		Internal
Value	Labor costs	Time for creativity
Needs
Welfare	Economic	Creative
		Means
Social	Commodity	Interpersonal

Economics, like any science, uses two types of research methods: specific and general. Particular methods are used only in economics, and general methods are used in other sciences as well. The interaction of system elements is the most important object of research in any science.

Mechanics studies the interactions of physical bodies, chemistry - substances, biology - living organisms, ecology - man and nature, philosophy - matter and consciousness, etc. If the interaction of elements in different sciences is of a similar nature, then these sciences use common research methods. For example, the interaction of substances in a living organism has common features with their interaction with inanimate nature. The use of general research methods led in this case to the creation of a mixed discipline - biochemistry.

Table 3 - Difference between “institutional man” and “economic man”

	"economic"	"institutional"
	Industrial	Information
Philosophy	Individualism	Solidarity
Human model	Mechanistic	Organic
Interaction	Commodity	Interpersonal
Behavior	Rational	Institutional
	Maximization	Harmonization
	Deterministic

Economics studies the interactions of economic entities that occur during the creation, distribution and use of goods. The nature of such interactions is determined by the level of development of society. In the primitive era, biological traits dominate in a person, therefore social interactions are impersonal in nature and represent, in fact, a metabolism - both organic (during reproduction) and physical (during joint labor activity). In the industrial era, the dominant form of interaction becomes the exchange of material products of manual labor, due to which economic processes in an industrial society are successfully described and studied by the methods of mechanics, which widely uses mathematical tools.

Therefore, the industrial economy is mechanistic in nature, that is, it is a mechanistic economy.

In the information era, interactions of economic entities that are interpersonal in nature represent an information exchange of products of creative activity between unique individuals. This kind of interaction is traditionally studied within the framework of sociology, therefore institutional economics as an economic theory of the information society is sociological in nature, i.e. it is a sociological economy.

Let us consider the main methods of studying institutional economics and industrial economics and conduct their comparative analysis.

1) Organic approach is basic methodological principle institutionalism, it opposes the mechanistic approach of traditional economic theory, according to which economic entities are likened to independent physical bodies, chaotically interacting (competing) with each other. The creators of the organic approach to the study of social phenomena are G. Spencer and E. Durkheim.

Their views are summarized below.

G. Spencer (1820 - 1903) - English philosopher, founder of the organic school in philosophy. According to Spencer, there is an analogy between the body politic and the living individual. Societies agree with individual organisms in four ways:

a) both of them increase many times in size during development;

b) their structure becomes more and more complex. This progressive transition from simple to complex constitutes characteristic feature, distinguishing living bodies from inanimate bodies;

c) parts become increasingly interdependent, and in the end the life and activity of each part is determined by the life and activity of other parts. The economic division of labor is analogous to the “physiological division of labor” between the organs of higher animals. The well-being of each person “is more and more closely connected with the well-being of everyone”;

d) the life and development of an organism (society) are independent of the life and development of any of its constituent units and are much longer than the existence of these units. In no body except the organic and social is there this continuous elimination and replacement of parts while the indestructibility of the whole continues.

The circulation of products in society plays the same role as blood circulation in a living organism. Each action involves a certain expenditure of effort; blood brings the materials needed to replenish this cost so that the organ can develop. What is called gain (profit) in commercial affairs corresponds to the excess of nutrition over the expenditure of energy in a living body. The mass of nutrients in circulation becomes more heterogeneous in its composition, and gradually it develops new element, in itself is not nutritious, but facilitates the process of nutrition. In the individual organism these are blood cells, and in the social organism they are money. In many lower animals the blood does not contain blood corpuscles, and in societies at a low level of civilization there is no money.

Spencer draws an analogy between the control system in society and the nervous system in an animal organism. That member of the ruling class who becomes the chief agent, like the primary nerve center in the developing organism, is, as a rule, a person endowed with some superiority nervous system. Just as it is common for each individual node to be excited only by special stimuli from certain parts of the body, in the same way it is common for each individual ruler to succumb in his actions to the influence of exclusively personal and class interests. Spencer writes: "... good brain there is one in which the desires corresponding to these different interests are balanced so that the course of action they evoke does not sacrifice any of them for the others. A parliament is considered good in which the parties are so balanced that their combined legislation gives each class as many powers as are compatible with the rights of the other classes.” The progressive improvement of a living organism is manifested in the emergence of nerve threads, which are similar to means of communication in society.

The progress of society is carried out according to the same laws as progress organic world. In both cases there is a development of the simple into the complex through a series of differentiations. The transformation of the homogeneous into the heterogeneous is the essence of progress. Have a wide variety of feelings, instincts, powers and abilities; to have a more complex arrangement of features and accessories means to differ more sharply from creatures of any other kind, to reveal a more definite individuality. All transformations in human affairs lead to a further development of the same faculty: they may be called the desire for individualization. Human progress lies in those internal changes, the expression of which is increasing knowledge.

E. Durkheim (1858 - 1917) - founder of the French sociological school. According to Durkheim, the function of the division of labor is to create a sense of solidarity between two or more individuals. It binds together individuals who would otherwise be independent; instead of developing separately, they combine their efforts; their solidarity extends far beyond brief moments of exchange of favors. Thus, the division of sexual labor is a source of marital solidarity. A man and a woman seek each other precisely because they are different. It is not the similarity, but the difference of the natures united by this attraction that gives it its energy. Durkheim identifies two types of solidarity:

· Mechanical solidarity, or solidarity based on similarities, is due to the fact that a certain number of states of consciousness are common to all members of society.

The connection that thus connects the individual with society is quite similar to that that connects a thing with a person. The individual does not belong to himself - he is literally a thing that society disposes of.

· Organic solidarity, or the solidarity caused by the division of labor, is possible only on the condition that each individual has his own sphere of action, and therefore his personality.

This solidarity is similar to the solidarity observed in higher animals. Each organ has autonomy, and the unity of the organism is greater, the more clearly this individualization of parts is manifested. In the course of social evolution, mechanical solidarity weakens, while organic solidarity strengthens. The same law that governs the biological development of the animal world applies here. Each part of an animal, having become an organ, has a corresponding sphere of action, where it functions independently, and at the same time, other organs depend on it much more strongly than before, since they cannot separate without risking death.

Every society... moral society, and altruism will always be the basis of social life. People cannot live without mutual agreements and, therefore, mutual sacrifices, without connecting with each other in a strong and lasting way. The individual learns to evaluate himself according to his true value as a part of the whole, as an organ of a single organism. Competition between individuals weakens with the development of the division of labor. In the animal world, competition between two organisms is stronger the more similar they are. Having the same needs, pursuing the same goals, they find themselves rivals everywhere. People are subject to the same law: a priest strives for moral authority, an industrialist for wealth, a scientist for scientific fame, etc. Each of them can achieve his goal without interfering with others.

The division of labor progresses as the number of individuals who are in sufficient contact to be able to influence and react to each other increases. This rapprochement and the active relationships that flow from it are the dynamic or moral density of society. Thus, the progress of the division of labor is directly proportional to the moral density of society.

2) Inductive method. Economic theories of the traditional (liberal) direction are built according to the deductive principle “from the general to the particular”: the main theoretical provisions are derived through a formal-logical analysis of a system of initial postulates that do not have serious empirical justification. Institutional economics, on the contrary, is built on the inductive principle “from the particular to the general”: the main theoretical principles are derived based on the systematization and analysis of a large amount of empirical data.

Among the institutionalists, the most consistent supporter of the empirical approach was the American economist W. Mitchell (1874 - 1948), the author of such works as “Economic Cycles: The Problem and Its Statement” (1927), “Measuring Economic Cycles” (1946). Mitchell's critics called his method "measurement without theory."

The deductive method of constructing an economic theory presupposes the possibility of the existence of universal laws that are valid for any society and in any era. Examples of such laws are the labor theory of value (among the classics), the law of falling marginal utility (among the marginalists), and the law of diminishing returns (among the neoclassicals). The system of laws of traditional economics is similar to the system of universal laws of mechanics that are global in nature (Newton’s laws, the law of conservation of energy, etc.). The inductive method of constructing economic theory rejects the possibility of the existence of universal laws. It is assumed that each identified pattern or trend has spatial, temporal, national, class and other boundaries. If economic laws exist, then they are local, and the theoretical and practical conclusions arising from them are not absolute, but relative (relativistic) in nature. Thus, the inductive approach of institutionalists is based on the principles of empiricism, locality and relativism.

3) Interdisciplinary approach. Within the framework of the liberal direction of economic thought, a narrow economic approach to the study of social phenomena dominates. On early stages formation of the mainstream, this approach was expressed in the fact that to explain social phenomena that go beyond the framework of economic life, the provisions of related social sciences, and some postulates were accepted that were considered obvious and therefore not subject to discussion. The results of other sciences were attracted by economists only when they served as a justification or illustration of the accepted postulates.

An example is Fechner's law, according to which the strength of an animal's reaction to a stimulus decreases with each repetition of the stimulus over a certain period of time. The English marginalist W. Jevons used this law to substantiate the law of diminishing marginal utility - the most important postulate of the industrial economy.

The method of postulating economic phenomena, adopted by supporters of traditional economics, is similar in essence to the method of axiomatic construction of mathematical theories (an example is Euclidean geometry, built on well-known postulates). Because of this, methods mathematical analysis successfully used in traditional economy to obtain and prove theoretical propositions. At the same time, the use of mathematics in economics does not indicate the presence of interdisciplinary connections, since in this case there is no borrowing of substantive provisions related to social life.

Mechanics, like mathematics, is built on a system of postulates, and in its content is neutral in relation to social phenomena. At the same time, it describes the simplest form of movement of matter, which also manifests itself in social life. Because of this, some social processes have common features with mechanical processes (for example, free competition), which predetermined the known influence of mechanics on the development of the economy. But since economics had virtually no influence on the development of mechanics, there is no interdisciplinary connection between these two sciences.

The method of postulating social phenomena is tantamount to passively denying the influence of related sciences on economic development. In the second half of the 20th century. within the mainstream, a tendency has emerged for the further development of a narrow economic approach. It lies in the fact that now, in addition to the method of postulating social phenomena, the method of explaining them using purely economic tools has also begun to be used.

This trend, which signifies a transition to the active denial of the role of related sciences in the development of the economy, is called economic imperialism.

The founder of economic imperialism is G. Becker (born 1930), author of the works “The Economic Theory of Discrimination” (1957), “Human Capital” (1964), “The Theory of Time Distribution” (1965), “Crime and Punishment: An Economic Approach” ( 1968), “An Economic Approach to Human Behavior” (1976), “Treatise on the Family” (1981). In 1992, G. Becker received the Nobel Prize in Economics for expanding the scope of microeconomic analysis. He created economic theories of racial discrimination, human capital, crime, fertility, family, etc. For example, Becker considers smoking as a rational choice of a person who has decided to increase the intensity of pleasure by reducing his life expectancy.

Table 4 - Methods of institutional economics and industrial economics

Since sociology is a generalizing social science that studies all forms of human interactions, of all related sciences it has the greatest interdisciplinary influence on institutional economics, in which it is widely used sociological methods, in particular:

A) personal approach. The central object of research in institutional economics is a unique individual endowed with a complex system of psychological motives. The emphasis is on the diversity of people's qualities rather than on their similarities. In industrial economics, the individual is viewed as an abstract "economic man", devoid of individuality and endowed with a single psychological motive. The central object of study is not the individual, but the profit-maximizing firm;

b) group approach. The diversity of personal qualities of individuals predetermines their association into various social groups, which are not considered in the industrial economy based on the philosophy of individualism. The group approach contradicts the mechanistic interpretation of social life adopted in traditional economics;

c) sociometric approach. Quantitative indicators characterizing significant economic phenomena can be obtained on the basis of subjective assessments of people using sociological surveys. In an industrial economy, the system of indicators is built on the principle of objectivity: subjective opinions of people are excluded from calculation algorithms. An example is the value of gross domestic product - the main measure of social welfare.

Conclusion

The relationships between the areas of modern institutionalism are multifaceted, complex and often difficult to identify; their assessment depends both on the understanding of each of the areas separately, and on the context of comparison and the area of ​​the phenomena being studied.

On modern stage development of institutional economic theory, it is very difficult to talk about a single subject of this important and interesting science. This circumstance is connected both with the diversity of ideas about subject areas and with the heterogeneity of the methods and models used.

Understanding the essence and relationships between the concepts and ideas of representatives of institutionalism will allow us to better understand not only the nature of economic phenomena themselves, but also the possibilities and prospects for the development of economic theory based on the exchange of ideas between various research programs.

In addition, modern institutional theory and all its directions can become a fruitful basis for numerous applied studies in those areas of economic activity that are currently insufficiently studied. Already, institutional theory has various areas of application, which O. Williamson combined into three main areas. The first is related to functional areas, the second to applications to related disciplines, and the third to applications to problems. economic policy. Within the first direction, O. Williamson lists six functional areas: finance, marketing, comparison of economic systems, economic development, business strategies, business history. For example, comparative analysis of economic systems was developed in the process of studying problems economic history And modern systems by analyzing the influence of institutions on the economic development of many countries. With the help of institutionalism, issues that are traditional for related disciplines are studied: political science, sociology, law, theory of international relations, etc. For example, processes of institutional change through lawmaking are studied, including in terms of the use of methods for creating normative legal acts that meet the principles of institutional design . The third type of application of institutionalism is its application to various areas public policy. Antimonopoly policy and economic regulation can be considered the most studied institutionalism. The researchers conclude that there are significant prospects for the development of institutionalism not only in terms of theoretical activity and the study of current problems of entrepreneurship and economic policy, but also in conducting research in related disciplinary areas.

Literature

1) Auzan A. A. Institutional economics. New institutional economic theory / A. A. Auzan. - M.: INFRA-M, 2010.

2) Korneychuk B.V. Institutional economics: textbook. manual for universities / B.V. Korneychuk. - M.: Gardariki, 2007. - 255 p.

3) Litvintseva G.P. Institutional economic theory: textbook / G.P. Litvintseva. - Novosibirsk: NSTU Publishing House, 2009. - 336 p.

4) Nureyev R. M. Microeconomics course: textbook for universities / R. M. Nureyev. -- 2nd ed.: NORM, 2007. -- 560 p.

Posted on Allbest.ru

...

Similar documents

State regulation of the economy: mechanisms, methods, basic forms and approaches. D. North's theory of neo-institutionalism and its essential content. Differences between institutionalism and neo-institutionalism. The structure and meaning of the new institutional theory.

course work, added 02/13/2014


Basic concepts, theories and representatives of traditional institutionalism. Features of the school of evolutionary theory of economics. Theoretical specificity of post-Keynesianism. Study of institutions-rules in the form of conventional expectations. Economics of agreements.

lecture, added 02/21/2012


Institutional economics, its functions and research methods. The role of institutions in the functioning of the economy. Basic theories of institutional economics. John Commons' system of economic views. Directions for the development of this area in Russia.

abstract, added 05/29/2015


The state as a generator of the institutional environment. Main goals of institutional policy. The role of the state in the economy. Analysis of politicians who contributed to the development of institutional economics: Ronald Coase, Oliver Williamson, Douglas North, Karl Marx.

test, added 03/02/2012


Historical and economic prerequisites for the emergence of materialism. D. Ricardo's theory of land rent and D. Keynes's theory of the causes of the cyclical decline of the economy. Early institutionalism in the USA, its founders and differences from the Keynesian model of economics.

test, added 03/05/2009


Construction of a theoretical-economic model of human behavior. Basic provisions of institutional theory. The category of “instincts” by T. Veblen. Human nature according to D. Dewey. Distinctive features modern "classical" institutionalism.

abstract, added 05/04/2015


Disadvantages of economic transformations at the end of the 20th century. The feasibility of reforming the economy in Ukraine on the methodological foundations of institutional theory. The main advantages of the institutional approach, components of a socio-economic institution.

test, added 09/12/2011


Characteristics of post-industrial society in relation to economic science. Main trends in the development of modern economics. Role Russian economy in transition to post-industrial society. Analysis of ways to improve economic science.

course work, added 06/20/2009


Classics of institutional theory. Basic provisions and differences between classical institutionalism and neo-institutionalism. Types of transformation and transaction costs in mini-economic systems. General structure and composition of transaction costs.

presentation, added 06/18/2013


The emergence of a new institutional economic theory. Modern neoclassical. Traditional institutionalism and its representatives. The main directions and stages of development of the new institutional economic theory. Rational choice model.

1.2 Norms, rules, their structure and types

1.3 Institute: essence, functions and types

1.1 The concept of institutional economics, its subject and significance for modern economic analysis

“When engaged in economic activity, we do not know either the needs of other people or the sources of the benefits we receive. Almost all of us help people with whom we not only do not know, but whose existence we do not even suspect. And we all live, constantly using the services of people about whom we know nothing. All this becomes possible due to the fact that, obeying certain rules of behavior, we fit into a gigantic system of institutions and traditions: economic, legal and moral.”

Friedrich August von Hayek

Austrian economist and philosopher

Laureate Nobel Prize in economics

“No country in the world has an optimal system of rules”

A.Auzan

Russian economist, Doctor of Economics n.,

Dean of the Faculty of Economics

Moscow State University named after M.V. Lomonosov

Institutional economic theory expands microeconomic analysis, involving in it factors not taken into account by classical microeconomic theory: factors of incomplete information, uncertainty of property rights, uncertainty factors (expectations) and, finally, factors of certain collective actions in a situation of collective choice, which differ from actions in a situation of individual choices considered by traditional microeconomics.

In the works of institutionalists you will not find a passion for complex formulas and graphs. Their arguments are usually based on experience, logic, and statistics. The focus is not on analysis of prices, supply and demand, but on broader issues. They are concerned not with purely economic problems, but with economic problems in conjunction with social, political, ethical and legal problems. Focusing on solving individual, usually significant and urgent problems, institutionalists did not develop a general methodology or create a unified scientific school. This revealed the weakness of the institutional direction, its unwillingness to develop and adopt a general, logically coherent theory.

Institutional economy- a branch of economics that studies economic relations within and between public institutions. Korneychuk V.V. notes that Institutional economy- this is a theory in which the empirical basis, the economic determinant, is an institution - a historically formed social tradition.

Institutional economics studies the mechanism of individual choice of economic agents, the methods by which various sets of institutional constraints could be used in it.

Norms and traditions in society not only limit the behavior of individuals, but are also used as tools to encourage economic entities to act in accordance with the rules, norms of behavior and granted rights defined in society

Institutionalism as subject of research puts forward both economic and non-economic problems of social economic development.Object of study– formal and informal institutions

The concept of institutionalism includes two aspects:"institutions"- norms, customs of behavior in society, and "institutions"- consolidation of norms and customs in the form of laws, organizations, institutions.

In modern theory, institutions are understood as the “rules of the game” in society or the “man-made” restrictive framework that organizes relationships between people, as well as a system of measures that ensure their implementation (enforcement). They create a structure of incentives for human interaction and reduce uncertainty by organizing everyday life.

WITH
The idea of ​​the institutional approach is not to be limited to the analysis of economic categories and processes in their pure form, but to include institutions in the analysis and take into account non-economic factors.

Institutional economics is a synthesis of economic processes and phenomena of social life described by the humanities.

Lecture 1

SUBJECT, OBJECT,

METHOD AND DIRECTIONS

RESEARCH WITHIN

INSTITUTIONAL ECONOMY

Methodological background

emergence of institutional analysis

Society and man as its central element exist in the surrounding world on the general rights of material adaptation: they are viable to that extent, i.e. they know how to preserve themselves, their essence for a long time, in which they are able to withstand the influence, pressure of interactions with external conditions of existence.

The only difference between human existence is the ability to set goals, the presence of consciousness and creativity. The application of these abilities to the surrounding world gives a flow of vital important information. The entire process of human adaptation is based on the processing of this information. Therefore, the development of any phenomenon is associated with information processing processes, which only a person can do. Thus, the essence of the subjective factor lies in the organization of the adaptation process and the development of social phenomena.

But the intellectual abilities of a person and the entire society as a whole are always naturally limited, therefore the question always and everywhere arises of organizing an effective mechanism for their distribution, use and production. This mechanism is created through the implementation of the institution. The implementation of the subjective factor in relation to any phenomenon and field of activity occurs in the presence of an institution for its development, a certain institutional environment.

That's why concept of institution as a condition for the effective implementation of human subjectivity, as a prerequisite for high-quality processing of reproductively significant information, is international for science as a whole. That is why they talk about the institution of marriage, political institutions, economic institutions, etc., i.e. the presence of those conditions that allow them to develop and persist even under the most unfavorable external conditions. This applies to all aspects of life, each of which is based on some basic relationships that give the information functioning in this area a full reproductive, systemic character.

Three conclusions follow from the above:

Psychological abilities are a rare resource, including an economic one;

The use and production of this resource is organized through institutions;

The phenomenon of any sphere of life, including the economic one, should be analyzed taking into account the principle of completeness of all reproductive information and the importance for its development of the action of the subjective factor of the economy (an intellectual resource that controls the institution).

Almost all modern scientific and educational literature assumes that institutionalism is a new research paradigm that significantly changes, if not the core, then the shell of classical political economy. The core is understood as a number of axioms, basic theoretical principles underlying marginal (marginal) analysis, primarily the rationality of economic activity aimed at maximizing the satisfaction of material needs, efficient use resources. The shell is a series of assumptions that ensure the clear functioning of the theoretical model being created, for example, complete freedom of movement and complete possession of information by business entities. However, this is not entirely true; we need to remember that K. Marx also pointed out that there are two sides to the content of any economic relations - organizational-economic and socio-economic. Moreover, if the latter of them is determined directly from the communication of people regarding the production, distribution, exchange and consumption of material goods and is the result of the interaction of their economic interests, then the first is a production technology, the organization of the process of this communication itself.

However, K. Marx believed that the organizational-economic side is not significant for political economic research, since it does not determine the nature of production relations arising from the dominant method of combining factors of material production. Since your practical problem he saw in explaining the need for the existence of a mechanism of forced labor under certain historical conditions of its material content and the social level of its division, and more specifically in describing the mechanism of “exploitation” in the conditions of capitalist production, based on the use of machines and the “purchase and sale” of labor power, then his opinion can be considered quite justified; he really could afford to abstract himself from the second (organizational) side of the functioning of industrial relations, without raising the question of achieving the maximum level of efficiency of this mechanism.

At the same time, marginalism (marginal analysis) never raised the question of the dual nature of production relations, since, in contrast to Marxism, it initially concentrated not on the qualitative nature and possible variety of forms of economic interactions in the process of reproduction of material goods, but on their quantitative side, the effectiveness of this issue . He was only interested in the possibility of achieving the most efficient use of material resources in some ideal market economy. In this case, the variety of possibilities for organizing market interactions, forms of organizing production and consumption not only falls out of the field of view of researchers, but also becomes a seditious idea that undermines the purity of the bright image of a private capitalist economy.

However, in practice it turned out that “institutions (in this case, mechanisms, ways of organizing economic interactions) matter” 1 and their presence is primarily reflected in the general and individual level of economic efficiency of business. In this sense, their action is manifested and is often compared with the process of friction in physical systems, limiting the purity of the action of general physical laws, first of all, the laws of motion. And now it is quite obvious to economists that in order to create a picture of a really functioning economy, this frictional force must be taken into account, and accordingly, it is necessary to turn to the study of possibilities, the need for existence and competition qualitatively in various ways(forms) of management and market interaction that arise on the basis of certain levels of transaction costs, costs of organizing economic interaction (for example, the pace of development of our country and China or individual firms (oil company Lukoil and a private company)).

Based on all that has been said subject of study of institutional economics, as well as classical economic theory, is the economic behavior of a person participating in social material reproduction with the aim of maximizing the satisfaction of his final needs.

1 Yaort D. Institutions, institutional changes and the functioning of the economy. - M., 1997.

ties, given the limited nature of the resources used in the economy, including intellectual abilities. She also tries to formulate general laws economic development of countries and peoples, but transforms them into stable rules of conduct for leading economic entities in certain historical conditions and considers these laws not only as objective, independent of the will and consciousness of people, but also as a result of expediently organized economic communication, a certain normative result of subjective activity people in the field of management.

However, we note that if classical political economy, when analyzing the subject, relies primarily on the study of the role of property relations (primarily the means of production) to create labor motivation and ensure its inevitability at any level of development of productive forces, then institutionalism emphasizes that the level of this motivation and labor efficiency, even under the same material conditions of production, can be different and depend on different ways of organizing economic communication. In this sense, the chosen forms of ownership inevitably determine the amount of value created.

However, it is also true that traditional marginalism, when analyzing the subject of research, affirms the primacy of value relations in the process of organizing the development of material production, emphasizes the role of the effective distribution and use of economic resources in a market economy, based on the right of private property, but without taking into account the diversity of its forms. Therefore, institutionalism indicates that the existence of a market economy is not only impossible without the implementation of private ownership of the results of labor and the exchange of these rights between business entities, but its effectiveness directly depends on the specific content of property rights. In this sense, the development of the market and the requirement to increase its efficiency predetermine the development of content and the movement of property rights. For example, under planned socialism, all resources belong to the state (including labor), hence the distribution of specialists, achieved result- absence of unemployment.

Thus, institutional economics establishes some methodological balance in the study of the subject of economic science from the point of view of the interaction of two system-forming, leading economic relations - relations of property and value. She seeks and creates a common methodological basis for combining marginal analysis and political economy (marginal and historical aspects economic development) and at the same time relies on the implementation of a general information approach to the study of social phenomena in economic research.

What do we mean by this? To understand the informational certainty of economic development brought by institutional analysis, first of all, let us recall that value relations are understood as relationships regarding the rational distribution of material goods and economic resources in space and time in relation to economic entities (the physical certainty of the existence of material goods). These relationships ensure production efficiency from the technological side: what, where, when and in what quantity should be located and how to use it to obtain maximum results.

And by property relations we mean relations regarding the appropriation and alienation of material goods by specific economic entities (the social certainty of the existence of goods, the method of appropriation). These relationships ensure the efficiency of production from the qualitative (motivational) side: whether the business entity is able, willing and has the right (under certain conditions) to use this item at its own discretion.

However, from a methodological point of view, as we noted above, it is obvious that both have equal importance for the organization of a full-fledged economic activity person. Therefore, value relations and property relations are the general information coordinates of any economic activity. These relations are interconnected and function only in unity: as a rule, it is impossible to change the existing distribution of material goods without changing ownership of it, and a change in the conditions of appropriation always leads to a change in both the structure of production and the distribution of goods.

It should also be noted that the process of their interaction is not spontaneous or random, but is controlled by the person himself, changes according to the economic interests of society, social groups and the individual, and develops over time as the productive forces develop. Therefore, any economic communication is expedient and organized in space and time, i.e. is the sphere of implementation of specific institutional work associated with the general laws of human adaptation and the psychological processes of processing reproductively significant information by him.

These organizational relationships, which allow a person to exist according to his own social laws, different from nature, take place in any sphere of human life and differ only in the final goal, which for the economy is the efficient use of resources and the satisfaction of material needs (the operation of the law of saving time in the reproduction of material good).

In this case, the economic (reproductive) existence of material goods is, first of all, determined by the totality of relations of value and property that arise between people regarding them, and by the presence of institutional activities of people coordinating economic communication. For example, the ballpoint pens we use: each of them is economically determined by the purpose of use, by cost, by property, it is known what will happen to it after a certain time. From an economic point of view, this individuality is not always rational and socially effective, since relations of property and value do not arise and exist on their own, but are the result of expedient institutional activities of people coordinating their interests, labor activity and general economic development.

The very institutional activity of people (coordinating communication and setting a common goal of development), as we noted above, is built on the general adaptive laws of human existence and psychological mechanism processing of reproductively significant information. Therefore, within the framework of institutionalism, any economic action is considered primarily as a product of psychological, mental activity, and psychological abilities for processing information and the available time for psychological activity are the main limited economic resources.

Thus, institutionalism tries to implement and apply knowledge about the general laws of cognition, the organization of creative activity and human adaptation in the surrounding world in a specific, namely economic, sphere of his life and economic theory. This is the essence of the information approach.

However, this approach to the study of economic phenomena has not yet found its full embodiment in economic theory, and modern institutional theory, which arose within the framework of classical marginal analysis and separated from it, is only approaching the understanding of its comprehensive methodological function and is used partially, only to remove the most “free” and not corresponding to reality theoretical assumptions of marginal analysis and the creation of new theories historical development individual economic phenomena, for example the state.

Note that such “free” assumptions within the framework of limit analysis primarily include the following statements:

That all subjects in a market economy have complete information;

That there is perfect competition in markets;

That all people always and everywhere act as rationally as possible;

That the firm can be represented as an individual entity and its behavior can be explained by a similar model of economic equilibrium;

That the forms of economic organization for all subjects can be monotonous.

These assumptions are questionable because:

Full possession of information is possible only either with centralized planning or in local market conditions;

Perfect competition exists only in one of the organizational forms of markets (the market of perfect competition);

Homo economicus limited in reality both by purposefulness (freedom in choosing resources and goals of activity), utilitarianism (exclusive interest in maximizing utility), and by internal conditions of activity (the presence of sympathy and a high degree of trust in other people);

The company always has an internal hierarchical structure (agent-principal relationship) and cannot organize behavior as a private individual;

Business forms are always diverse due to the presence of multiple forms of ownership and value, which is associated with the continuity of scientific and technical progress, the development of the division of labor and the historical specifics of the development of business entities.

Moreover, if you look at these restrictions, you will notice that their resolution is impossible within the framework of traditional analysis in principle, since any decision of one of them will contradict the other, for example, the local market model is impossible under the conditions of perfect competition, centralized planning undermines trust between participants transactions, etc. In general, according to J. Keynes, the presented assumptions “apply not to the general case, but only to the special case, since economic situation which it (economic theory) considers is only a limiting case of possible equilibrium states” 1.

In general, so far, within the framework of neoclassics, institutionalism is used only as a new tool for finding new solutions to an old problem - improving conditions for increasing production efficiency. This approach is associated with the analysis of the outcomes of the implementation of various private property rights, which function as rare economic resource, primarily at the microeconomic level of management, and leads to an understanding of the inevitability of the coexistence of a variety of organizational forms of economic activity. TO main problems of analysis of institutional economics includes identifying:

The effects of alternative sets of rules (property rights) and types of economic organization on behavior, resource allocation, and equilibrium outcomes;

The presence of general patterns of development of production and exchange.

Within the framework of historical schools of economic analysis (new institutionalism), property is considered as a general historical phenomenon, not related to the current efficiency of individual business entities, but ensuring the unity of the entire economic mechanism,

1 Keynes J. General theory employment, interest and money // Anthology of economic classics. - M.: Delo, 1994.

interaction between classes of society and having various historical forms of implementation that are capable of changing, developing and replacing each other. Here the institutional approach is associated with macroanalysis, the general structure of the economy and the state and does not go to the micro level of research.

1.2. Subject of study of institutional economics

and its relation to traditional schools of economic analysis

As we noted above, if traditional economic theory (marginal analysis) examines the general laws and principles of the implementation of rational economic behavior (based on given models of economic equilibrium of consumers and producers), then institutionalism examines conditions and laws of organization of the most rational nature of economic activity of subjects, primarily in conditions of a wide division of labor and developed commodity exchange.

Therefore, the object of study of institutional economics (what interest is directed at and about what economic communication is organized) is information that is reproductively significant for business entities, the creative processing of which leads, as a rule, to maintaining or increasing their level of economic adaptation, creative adjustment of the vector of development and always occurs within certain economic institutions.

At the same time, an economic institution is understood as a set of subjectively determined conditions for people’s labor activity, which make it possible to effectively organize the process of their material reproduction. This is a system of social elements of the organization of the labor process that determines the process of creative adaptation of economic entities to changing economic conditions in the presence of a basic limitation on intellectual resources (the ability to process information and the ability to create new knowledge) in conditions of a wide division of labor and cooperative communication.

An institution as an economic category appears as a set of organizational relations that regulate the development of individual areas and areas of activity of business entities on the basis of the implementation of the dominant system of property rights and value (for example, the institution of the market, the institution of labor relations, etc.).

The presence of an institution for organizing any phenomenon is manifested in the creation of a set of organizational norms individual behavior in society (compliance with norms of activity, norms of execution of contracts, norms of execution of rules, i.e. norms of individual economic behavior). The structure of such an institution inevitably includes: subjective norms of activity and behavior; agreements of counterparties to transactions (contracts related to the division of ownership rights on the terms of activity); rules of conduct adopted for the entire set of counterparties within a given type of activity (the presence of procedures for the implementation of individual norms of behavior adopted on the basis of a system of contracts), compliance with which can be entrusted (if there is a significant tendency to opportunistic behavior) to external management bodies. These elements of the structure of the institution, considered as conditions for a specific type of activity (ensuring the existence of the phenomenon), constitute its internal institutional environment. The development of the institutional environment, in turn, as a form of specific economic activity in the process of social division of labor leads to the formation of a system of management bodies involved in monitoring compliance with rules of behavior, conditions for concluding and executing contracts, organizing the process of developing individual norms of behavior (control of permission social conflict). This is a special organizational institution, the activities of which are also not ideal, but concretely specific. People working in this area realize primarily their personal interests, and institutional activity itself is only a means of satisfying personal needs.

Let us consider in more detail the internal structure of the institute. Its basis is standard of activity- some stamp, a block of knowledge about specific labor actions, allowing to obtain a given final material or moral result, an item of final consumption. In essence, the norm of activity is a basic element of maintaining the workforce.

Norms of activity are a general way of subjectively embodying knowledge about the material content of work activity, a form of consolidating the results of mental activity, the realized ability to set goals in the economy. Its presence expresses the effect of the law of saving time at the subjective level - a rational method of production is firmly fixed in the human mind for subsequent reproduction and repeated use.

In the process of social communication, based on the norm of activity, a norm of behavior which is nothing more than a socially mediated and realized norm of individual activity, recognized in the process of communication (resolution of socio-economic conflict, conflict of interests) as socially significant, which has turned into a public value.

Although this norm of behavior is implemented through the activities of each person in a subjective way, it reflects the process of his socialization, as well as the presence in the economy of a special system of relations associated with the coordination of the economic interests of all business entities at three levels of general social conflict (personal, interpersonal, group), which we will talk about in more detail when analyzing the normative nature of human behavior.

Structurally, such a norm differs from the norm of activity in that a conditioned mechanism of its motivation is added to the general block of material knowledge about activity. This second element of the norm of behavior consolidates the knowledge acquired in the process of communication about the possibility and feasibility of implementing an individual norm of activity, its public approval or denial. At the same time, the subject receives information about possible sanctions and consequences of implementing the norm, the conditions for their occurrence, i.e. he becomes a carrier of knowledge of motivation for activity.

Thus, a norm of behavior includes both a norm of activity and a norm of attitude towards it, a norm of motivation for activity. This norm is also a form of expressing the action of the law of saving time at the individual level, since it automatically allows you to “launch” activities upon the occurrence of certain standard situations, conditions of reproduction.

The presence of norms of behavior objectively facilitates the conclusion of contracts and agreements. Standards of behavior that are understandable to everyone and accepted by society constitute the “language” of economic communication in conditions of a wide division of labor, allowing people to organize and carry out joint work activities.

Agreement (contract)- this is a way of forming such norms of joint economic behavior of business entities that ensure a combination of interests of counterparties of a certain type of activity subject to the social division of labor (for example, supplier and consumer, hired worker and employer, etc.). This is a form of organizing a compromise of the economic interests of the subjects of any general view activities. With the help of this mechanism, all individual norms of behavior are transformed into social ones, ensuring the effectiveness of joint activities and expressing the subordination of individual human interests to collective ones. In fact, all human labor activity is a chain of social contracts.

Structurally, the agreement can be represented as a bilateral definition (information description): the content of the norm of activity of each counterparty, taken as an obligation for any period, the conditions for the implementation of this norm of activity, the conditions for monitoring its implementation, sanctions (rewards) for its violation (performance).

A contract must be distinguished from obligations- not every obligation is a contract, for example, a voluntarily accepted obligation taken without concluding agreements is not a contract. But every contract is a voluntarily assumed (bilateral) obligation, the fulfillment of which can be controlled externally.

Contracts, firstly, should be distinguished by the conditions of their conclusion. First of all, they can be selective And indiscriminate. In the first case, subjects have the opportunity to choose counterparties for their activities, in the second - not. Also contracts can be symmetrical And asymmetrical. Within the first group, the possibilities for choosing the conditions for exchanging resources for the parties are the same, but in the second group they are not.

Secondly, contracts differ in the degree of completeness of the description of the conditions for fulfilling the obligations assumed and the method of monitoring their implementation. In this sense, there are classical, neoclassical and relational contracts.

Classic contract is complete and formalized, implies termination of the agreement in case of violation of any clause of the agreement, its guarantor is the state.

Neoclassical contract used primarily when concluding long-term contracts, the terms of which cannot be fully foreseen, or are associated with prohibitively high costs. Under these conditions, a court decision is not always constructive when conflicts arise; as a rule, a third-party arbitrator, an arbitrator capable of reconciling the parties, plays a large role in resolving them. In this case, the transaction is not terminated, but is successfully completed. The neoclassical contract is incomplete and assumes the continuity of relations between the parties when conflict situation until the transaction is completed. The guarantor of the contract is a third party.

As the duration of contractual relations increases and their complexity increases, the trust of the parties to each other begins to play an increasingly important role. In conditions when replacing a partner becomes practically impossible, neoclassical contracts are replaced by relational ones (in the case of hierarchical ties, administrative ones).

Relational contract is incomplete, requires long-term cooperation of the parties, the guarantor of the contract is one or both partners.

Also, contracts can be explicit or implicit, concluded formally or informally, while obligations are accepted independently, on the initiative of both or one of the parties.

Functioning in society plays an essential role in concluding contracts. behavior rules, which act for contractual relations various types activities as information limitation and social norms of communication.

First of all, the rules act as a limiter on the choice of content and conditions for concluding a contract, which is appropriate if the limited rationality of human activity is recognized, the rare nature of the intellectual resource in the economy and the presence of common economic interests of all business entities.

Rules of conduct apply to a specific type of activity and, without considering the specific content of contracts, determine the regulatory conditions for their conclusion. They ensure the performance of specific functions of this group of persons, which occupies a special place in the system of division of labor, while respecting the rights and freedoms assigned to them.

From the point of view of the rules, all spheres of labor activity and their agents are equal. The norm of compliance with the rules acts as a certain social contract- a contract accepted by all subjects of a certain type of activity and the economy as a whole.

The rules of conduct socialize the experience of concluding contracts in a certain field of activity, and therefore they become the norms for regulating a certain type of activity as a whole. At the same time, they act as unconditional social values, since, as generally accepted norms, they can significantly reduce contracting costs and save information costs when interpreting intentions. Some rules are so universal that they are successfully applied in all areas of business, and at the same time all types of economic activity appear as equal, built on compliance with general norms of economic activity.

The structure of the rule is as follows: contracting situation + rule = normative content of the contract (correspondence to the type of activity) + normal conditions its conclusions (respect for rights and freedoms) + control over regulatory implementation + sanctions for violation of the contract.

The implementation of rules of conduct, as a rule (with the exception of informal ones), is controlled externally with the help of special governing bodies, which assume the role of bearer of collective and common interests. At the subjective (personal) level, when the guarantor of the implementation of the rule coincides with its addressee, the rules of behavior appear in the forms of habits and behavioral stereotypes.

However, in society there are always conditions for violation of accepted rules of behavior on the part of individual agents of activity who expect to receive greater benefits from this due to some subjective reasons. In this case, we should talk about the occurrence opportunistic behavior. Various types of sanctions may be applied to persons who engage in this type of behavior, such as: public condemnation, official censure, fine, coercion, restriction of civil rights and freedoms, death penalty (life imprisonment).

Conducting opportunistic behavior is always associated with the emergence external effects, externalities. These effects, if the perpetrator is brought to justice, can and should be compensated to preserve the overall optimal situation according to Pareto (if one exists).

The presence of rules of behavior in society leads to the emergence of so-called focal points (note that agreements describe local points of interaction of interests), i.e. spontaneously chosen behavior options by all subjects who find themselves in a given situation. At the same time, each subject obeys the norms of behavior provided for by the rule, assuming that all others act in the same way, which is a more powerful incentive, the more people obey the rule.

Since the rules of conduct describe the entire economic activity of society and the system of property rights as a whole for all business entities, it is possible to carry out a general classification of the rules of conduct in society (Fig. 1).

This classification in general, is logical and does not reflect the hierarchy of rules for the construction of which economists propose their approach, namely: the more important and significant is the rule, the introduction or change of which is associated with the greatest transaction costs and efforts.

In general, focusing on the final result - the functioning of norms and rules of behavior, we can give the following definition of an institution: it is a subjective mechanism for managing the process of functioning of rules and norms of behavior in a certain field of activity, ensuring the interaction of subjects in conditions of a wide division of labor and the implementation of the law of saving time for everyone levels and business entities.

In economics, institutions perform three main functions.

Firstly, information function, associated with the identification and consolidation of reproductively significant information in the norms of economic behavior.

Secondly, they do coordinating function linking together through the contracting process and compliance with the rules of conduct of all business entities operating in conditions of a wide division of labor and scientific and technological progress.

Thirdly, they do distribution function limiting through a system of rules the set possible ways and directions of action and monitoring the content of contracts.

In general, the presence of an effective system of institutions in the economy is essential; Thus, according to the results of some studies, it can be argued that the degree of influence of the institutional factor on the rate of economic growth is twice as high as any economic policy. High quality economic policies and economic institutions usually result in GNP growth of 2.4%; if economic policy becomes of low quality, then economic growth still remains at the level of 1.8%; if the low quality of institutions is combined with high quality economic policy, then economic growth will be only 0.9%.

Besides internal organization institution, analysis of its content, we can also talk about the external side of this phenomenon, its organizational form (Fig. 2).

From the presented figure it is clear that the external institutional environment for the activities of each person is a set of rules regulating it, the producer and controller of execution (imposing punishment due to non-compliance) of which is the governing body. The interaction of a person with the institutional environment can be more clearly represented using a diagram (Fig. 3).

This scheme reflects the following stages of interaction: 1) the impact of individuals on institutional agreements is determined by a voluntary agreement concluded in the form of a contract; 2) institutional environment, including hierarchical system rules, influences institutional agreements, limiting their scope and determining the terms of contracting; 3) institutional agreements influence individual behavior, subordinating it to the requirement of fulfilling contracts; 4) institutional agreements influence the institutional environment, predetermining the content and change of rules; 5) the institutional environment influences individual behavior, informing the person necessary knowledge and the framework of its future activities, the prerequisites for the emergence of contracting relations; 6) the individual influences the institutional environment by electing governing bodies and participating in the adoption of the most important laws.

Thus, from the external, organizational side, the institution of functioning of a certain type of activity is an elementary unit of the institutional environment and includes: counterparties of economic activity entering into contracting relations; the body managing the development of the institution, monitoring the fulfillment of the obligations assumed by the parties and regulating their activities by producing internal rules of conduct; the results of the functioning of the institution - norms of activity, norms of behavior, rules - norms of communication.

Introduction
1. The subject of studying institutional economics and its place in modern economic theory
1.1. The concept of an institution. The role of institutions in the functioning of the economy
1.2. Institutionalism and neoclassical economics
1.3. Old and new institutionalism
1.4. Main trends of modern neo-institutionalism
2. Models of human behavior in institutional economics
2.1. Model of economic man
2.2. Rational behavior. Principle of rationality
2.3. Behavioral Prerequisites for Institutional Analysis
2.4. Institute of Business Ethics and Economic Behavior
3. Transaction costs
3.1. Concept and types of transactions
3.2. The concept of transaction costs
3.3. Transaction costs and specification (erosion) of property rights
3.4. External effects. Coase theorem
3.5. Transaction costs and contractual relationships
4. Theory of economic organizations
4.1. Organization in economic theory
4.2. Dichotomy: institutions and organizations
4.3. Control and power in a business organization
5. Organization and theory of groups
5.1. Organization and groups. Traditional group theory
5.2. Large groups
5.3. Small groups
5.4. Special Interest Groups and Distributive Coalitions
6. Firm as an economic organization
6.1. The Firm in Neoclassical Theory
6.2. Contract theory of the firm
6.3. Principal-agent theory
6.4. Alternative objectives of firms
6.5. Organization and processing of information
6.6. Typology of business organizations
7. Institutional structure of the economy
7.1. Concept of institutional structure
7.2. Hierarchy of rules and institutions
7.3. Institutional structure and institutional environment
8. Institutional changes
8.1. Mechanism of institutional change
8.2. State and institutional changes
8.3. Institutional changes in a transition economy
Bibliography

Introduction

When engaged in economic activity, we do not know either the needs of other people or the sources of the benefits we receive. Almost all of us help people with whom we not only do not know, but whose existence we do not even suspect. And we ourselves live, constantly using the services of people about whom we know nothing. All this becomes possible due to the fact that, obeying certain rules of behavior, we fit into a gigantic system of institutions and traditions: economic, legal and moral.

August Friedrich von Hayek

Economic science, like any other, goes through its ups and downs. Periodically recurring crises in the economies of various countries, not always successful attempts by economic theorists to offer solutions to pressing problems lead to a serious revision of the fundamental principles of economic science; questions are again raised about the limits of application of the dominant paradigm (" mainstream").

Increasingly, in the scientific economic literature there is a statement that the methodology used by neoclassical economic theory to analyze macroeconomic problems and develop practical recommendations often turns out to be untenable and it is necessary to link the processes occurring in the economy with other spheres, namely legal, political and social.

Insufficient attention to the institutional component in the Russian model of market transformations has become obvious, including to most economists who are adherents of the neoclassical school, as evidenced by numerous publications in the economic literature of recent years, both Western and Russian. Practice has shown that stability of effectively operating market institutions more important than the speed of market reforms.

Thus, the problem of finding a new approach for analyzing transformation processes in countries with transition economies, as well as in developing countries, has become relevant at the present stage, and the ideas of representatives of the institutional school, or rather one of its main directions - neo-institutional economic theory, have been further developed.

The subject of studying institutional economics and its place in modern economic theory

Models of human behavior in institutional economics

Rationality

According to O. Williamson, there are 3 main forms of rationality:

1) Maximization. It involves choosing the best option from all available alternatives. This principle is adhered to by neoclassical theory. Under this premise, firms are represented by production functions, consumers are represented by utility functions, the allocation of resources between different areas of the economy is taken for granted, and optimization is pervasive.

2) Bounded rationality is a cognitive premise that is accepted in the economic theory of transaction costs. This is a semi-strong form of rationality, which assumes that actors in economics strive to act rationally, but in reality have this ability only to a limited extent.

This definition allows for different interpretations. Economists themselves, accustomed to considering rationality as categorical, classify bounded rationality as irrationality or irrationality. Sociologists consider such a premise to be too great a departure from the relative behavioral precision accepted in economic theory.

That is, they say that adherents of the theory of transaction costs further blur the boundaries of uncertainty accepted in the classical theory. However, the economic theory of transaction costs explains this duality by the need to combine in one motive the focus on the economical use of limited resources and the desire to study institutions as behavioral patterns in conditions of limited information.

This theory takes such a limited resource as intelligence as one of its most important prerequisites. There is a desire to save money on it. And for this, costs are either reduced during the decision-making processes themselves (due to personal abilities, ownership big amount information, experience, etc.), or turn to the help of government agencies.

3) Organic rationality - weak rationality of the process. It is used in the evolutionary approach by Nelson, Winter, Alchian, tracing the evolutionary process within one or several firms. As well as representatives of the Austrian school Menger, Hayek, Kiirzner, linking it with the processes of more general- institutions of money, markets, aspects of property rights, and so on. Such institutions “cannot be planned. General scheme such institutions do not mature in anyone's consciousness. Indeed, there are situations in which ignorance “turns out to be even more “effective” in achieving certain goals than knowing those goals and consciously planning to achieve them.”

Forms of organic and bounded rationality complement each other, but are used differently to achieve different goals, although the study of institutions as ways to reduce transaction costs by neo-institutionalists and the clarification of the viability of institutions by the Austrian school are closely related.

2. Focus on self-interest

1) Opportunism. In the new institutional economics, opportunism is understood as: “Following one’s interests, including by deception, including such obvious forms of deception as lying, theft, fraud, but hardly limited to them. Much more often, opportunism involves more subtle forms of deception, which can take active and passive forms. In general we're talking about only about information and everything connected with it: distortions, hiding the truth, confusing a partner.

Ideally, there should be harmony in the process of information exchange - open access on both sides, immediate communication in case of information changes, etc. But economic agents, acting opportunistically, manifest this to varying degrees. Some are more prone to deliberate deception, others less. This creates information asymmetry, which greatly complicates the tasks of economic organization, because in the absence of opportunistic behavior, all behavior could be subject to some rules.

Neutralization of opportunism can be carried out by the same proactive actions or, as mentioned above, by concluding a contract in which both parties agreed on all the points on which they do not trust each other.

2) Simply following one’s interests is the version of egoism that is accepted in neoclassical economic theory. The parties enter into the exchange process knowing in advance the starting positions of the opposite party. All their actions are stipulated, all information about the surrounding reality that they will have to deal with is known. The contract is fulfilled because the parties follow their obligations and rules. The goal is achieved. There are no obstacles in the form of non-standard or irrational behavior, or deviations from the rules.

3) Obedience. The last weak form of self-interest orientation is obedience. Adolph Lowe formulates it as follows: “One can imagine an extreme case of monolithic collectivism, where planned tasks are carried out centrally by functionaries who fully identify themselves with the global tasks assigned to them.” But in its pure form, this type hardly exists in economics, so it is more likely to be applied to the study of the evolution of human socialization than to explaining the motives for decision-making, since others decide for him.

Transaction costs

Concept and types of transactions

The concept of transaction was first introduced into scientific circulation by J. Commons. A transaction is not an exchange of goods, but the alienation and appropriation of property rights and freedoms created by society. This definition makes sense (Commons) because institutions ensure the spread of will individual person beyond the area within which it can influence environment directly by their actions, i.e. beyond the scope of physical control, and therefore turn out to be transactions in contrast to individual behavior as such or the exchange of goods.

Commons distinguished three main types of transactions:

1) Transaction transaction - serves to carry out the actual alienation and appropriation of property rights and freedoms and its implementation requires mutual consent of the parties, based on the economic interest of each of them.

In the transaction, the condition of symmetrical relations between counterparties is observed. Distinctive feature The transaction of the transaction, according to Commons, is not production, but the transfer of goods from hand to hand.

2) Management transaction – the key here is the management relationship of subordination, which involves such interaction between people when the right to make decisions belongs to only one party. In a management transaction, behavior is clearly asymmetrical, which is a consequence of the asymmetry of the position of the parties and, accordingly, the asymmetry of legal relations.

3) Rationing transaction – it preserves asymmetry legal status parties, but the place of the managing party is taken by a collective body that performs the function of specifying rights. Rationing transactions include: the preparation of a company budget by the board of directors, the federal budget by the government and approval by a representative body, the decision of an arbitration court regarding a dispute arising between operating entities through which wealth is distributed. There is no control in the rationing transaction. Through such a transaction, wealth is allocated to one or another economic agent.

The presence of transaction costs makes certain types of transactions more or less economical depending on the circumstances of time and place. Therefore, the same operations can be mediated by different types of transactions depending on the rules that they order.

2. The concept of transaction costs

Criticism of the position of neoclassical theory that exchange occurs without costs served as the basis for introducing a new concept into economic analysis - transaction costs.

The concept of transaction costs was introduced by R. Coase in the 30s in his article “The Nature of the Firm.” It has been used to explain the existence of hierarchical structures that are antithetical to the market, such as the firm. R. Coase associated the formation of these “islands of consciousness” with their relative advantages in terms of saving on transaction costs. He saw the specifics of the company's functioning in the suppression of the price mechanism and its replacement with a system of internal administrative control.

Within the framework of modern economic theory, transaction costs have received many interpretations, sometimes diametrically opposed.

Thus, K. Arrow defines transaction costs as the costs of operating an economic system. Arrow compared the effect of transaction costs in economics with the effect of friction in physics. Based on such assumptions, conclusions are drawn that the closer an economy is to the Walrasian general equilibrium model, the lower its level of transaction costs, and vice versa.

In D. North’s interpretation, transaction costs “consist of the costs of assessing the useful properties of the object of exchange and the costs of ensuring rights and enforcing their observance.” These costs inform social, political, and economic institutions.

In the theories of some economists, transaction costs exist not only in a market economy (Coase, Arrow, North), but also in alternative methods of economic organization and in particular in a planned economy (S. Chang, A. Alchian, Demsetz). So, according to Chang, maximum transaction costs are observed in a planned economy, which ultimately determines its inefficiency.

Organization and group theory

Organization and groups

The analysis of organizations and groups is largely borrowed by economists from sociologists. At the beginning of the lecture, we will focus on the main categories used in research.

Social group is a number of people who interact with each other on a regular basis.

Primary groups are a small association of people connected by bonds of an emotional nature. Example: family, group of friends (Cooley, Giddens).

Secondary groups are a number of people who meet regularly, but whose relationships are largely impersonal.

An organization is a large association of people acting through non-personal connections, created to achieve specific goals.

Informal networks (connections) are created at all levels within the organization; their study is no less important than the study of the formal characteristics of the organization.

Almost all large organizations are bureaucratic in nature.

Bureaucracy involves a clear hierarchy of authority, established rules governing the behavior of officials, and a separation between the tasks of officials within the organization and their lives outside it.

Often bureaucracy in large organizations leads to oligarchy (or monopolization of power by the top of the organization Robert Michels).

Traditional group theory

Existing traditional group theory unequivocally asserts that private groups and associations operate according to principles fundamentally different from those that govern the relationships between firms in the marketplace or the relationships between taxpayers and the government.

Traditional group theory develops in two directions: casual and formal.

1) Casual direction: private organizations and groups exist everywhere, and this ubiquity is the result of the fundamental human tendency to join associations. According to the Italian philosopher Gaetano Mosca: people have an instinct to gather in herds and fight with other herds. This instinct underlies the formation of all divisions and divisions that arise within society and lead to moral and sometimes physical conflicts. The ubiquitous and inevitable nature of group formation in Germany was emphasized by the sociologist Georg Simmel.

2) The formal version of the traditional view of groups is not based on the instinct or tendency to form groups, but emphasizes the universal nature of groups. Proponents of this view try to explain today's groupings and associations by the evolution of modern industrial society from the primitive one that preceded it. Initially, there were only small kinship or family groups that dominated primitive society. Thanks to evolution, social differentiation occurs in society, new associations arise that take on functions previously performed by family groups. According to sociologist Talcott Parsons, “in an advanced society, the most important role is played not by kinship unions, but by the state, church, universities, corporations and professional associations.”

Within the framework of the formal version of traditional group theory, there is no unambiguous answer to the question of what is the fundamental source of the formation of small groups in primitive society and large groups (voluntary associations in modern times).

One of the explanations for the formation of groups within this direction is the functional approach, because through the functions they pursue and perform, groups and associations of various types and sizes can operate successfully. According to this approach, small groups prevailed in primitive society, because they were best suited to perform the functions required by the people of that society. In modern society, on the contrary, large associations predominate, because only they can perform certain necessary functions.

Traditional group theory recognizes that small and large groups differ in the level (scope) of the functions they perform, but not in the nature (the degree of success in carrying out these functions and the ability to attract new members).

Any group or organization, large or small, acts to obtain a collective good that by its nature will benefit all members of the group, this is the fundamental reason for the emergence of groups. Although it can be recognized that small groups are in many cases more successful in providing collective goods.

Large groups

Large groups usually mean the state, trade unions, large corporations, etc.

Those who belong to an organization or group can be said to have both a common interest and various personal interests that are different from the interests of other individuals belonging to the group.

Many consider it virtually undeniable that groups of individuals with common interests usually try to realize these common interests, at least within the scope of objective economic laws.

It is assumed that the idea of ​​the desire of groups to act in general group interests logically follows from the generally accepted thesis about the rational selfish behavior of the individual. In other words, if the members of a group have a common interest or goal, and if they all benefit from achieving that goal, then it is logical to assume that rational individuals will direct their efforts toward achieving that goal.

In fact, this is not the case, because all individuals in the group will benefit from achieving a common goal, whether they act towards that goal or not. Indeed, unless there is some kind of coercion or the group is small enough, rational, self-interested individuals will not make any effort to achieve group goals.

If members of a large group are rationally trying to maximize their individual welfare, they will not offer any effort to achieve group goals until they are pressured or each of them is offered an individual motive for such action that does not coincide with the general one. interest of the group, a motive that is realized on the condition that group members take on part of the costs of achieving a common goal.

Consequently, the traditional view that groups of individuals with common interests seek to promote those common interests turns out to have very little scientific value.

The combination of personal and public interests in one organization suggests a parallel with a perfectly competitive market. This model recognizes the fact that profit maximizing firms may act against their own interests as a group. It is important to note that although all firms are interested in raising prices for the industry's products, each of them individually wants to transfer the burden of costs of this task to other firms, since none of the firms wants to reduce its own production volume.

The achievement of some common goal or the satisfaction of some common interest means that a public good has been provided for that group.

A collective (public) good is understood as “any good or service that satisfies the following requirement: if they are consumed by any individual X i from the group X 1,.. X i,… X n, then all other members of the group can consume them” - according to Olson M. theories

Small groups

Small groups in many cases prove to be much more effective and viable than large groups.

Individuals create a small group (organization) also to achieve the opportunity to receive a collective benefit.

If there is a quantity of a collective good that can be obtained at a sufficiently low cost, and that some individual in the relevant group would benefit from acquiring it entirely at his own expense, then there is a probability that such a good will be produced (received).

In this case, the total benefit will be so great compared to the total costs that the share of the profit of one individual will exceed the total costs.

Our goal is to determine:

1) The optimal amount of good for each individual;

2) Will the collective good be produced at this optimum?

Let's introduce the following variables:

C - costs of achieving a unit of collective good

T - volume of collective good

S g - group size - const

F i - part of the total benefit that went to the individual - const

V g = (S g T) - group benefit (value of the good for the group)

V i - the value of the good for the individual (the individual’s benefit)

(1 or 2)

A i – benefits that an individual will receive as a result of receiving a certain amount of collective good

A i will vary depending on T => (4)

The first order condition for maximizing an individual's benefit would be

Second order condition - (6)

Because ,

and F i and S g are considered constant (otherwise the optimum is unattainable), then , (7)

hence

Thus, we will find how much of the collective good an individual would buy, acting independently, if he wanted to buy any of it.

We can give this result a general meaning. Because the optimal option can be found when running:

(9) if , then

(10) therefore,

This means that the optimal amount of a group good allocated to an individual can be achieved when the change in the benefit of the entire group multiplied by the individual's share equals the change in the total costs of the group in achieving this good.

In other words, the increase in group income must exceed the increase in costs by the same amount as the group's income exceeds the individual's income, i.e. on

In group theory, the important question is not how much collective good will be produced, but whether it will be provided at all.

The optimum of an individual acting independently will be at so, if , then , therefore, , therefore if , then the individual’s benefit from the collective good exceeds the costs.

This means that a collective good will be provided if the cost of obtaining the collective good is so small compared to the benefit to the group that the total benefit exceeds the total cost by the same amount as it exceeds the benefit of the individual.

Based on the above, a rule can be formulated:

Collective benefit will be ensured if the excess of the total benefit in the purchase (production) of a collective good over the total costs by a factor (since ), is accompanied by the condition that the total benefit exceeds the total costs by a greater number of times than the total benefit of the group exceeds the benefit of the individual, i.e. e.

To determine whether it is realistic to assume that a group will voluntarily undertake the production of a collective good, two conditions must be met:

1) The optimal amount of collective good for each individual is determined by the equality:

2) If, when purchasing a certain amount of a collective good, the benefit of the group exceeds the total costs to a greater extent than it exceeds the benefit of one individual, then there is reason to believe that the collective good will be provided and the individual's benefit will exceed the total costs associated with obtaining the collective good, i.e. e. good can also be produced in the case of .

This can be illustrated with a graph:

Rice. 3. Production of collective goods

Contract theory of the firm

A company is a set of relationships between employees, managers and owners. These relationships are often expressed by agreements - contracts.

Contracts are not necessarily concluded in a formal form (i.e. recorded on paper); they can also take the form of informal agreements (agreements, contracts).

In the institutional theory of the firm, a firm, representing a set of internal and external contracts, faces two types of costs to ensure their implementation: transaction costs and control costs (organizational costs)

Transaction costs are the costs (explicit and implicit) of ensuring the fulfillment of external contracts. Transaction costs are the costs of carrying out business transactions, including the monetary value of the time spent searching for a business partner, negotiating, concluding a contract, and ensuring proper execution of the contract.

Control costs are the costs associated with implementing internal contracts. Control costs include the costs of monitoring the implementation of internal contracts, as well as losses resulting from improper execution of contracts.

The market and the firm from this point of view represent alternative ways of concluding contracts. The market can be interpreted as a network of external contracts, and the firm as a network of internal contracts.

Rising transaction costs due to the inefficiency of external contracts limit the scope of the market. This, in turn, determines the existence of relatively large firms, for which the problem of external agreement and the possibility of opportunistic behavior is in many cases removed by the development of internal contracts.

In turn, as the firm grows, the number of employees and the dismemberment of the production process increases (a typical example is a conveyor belt with separate operations), so that the total result of the firm’s activities turns out to be the work not of one or several workers, as in the pre-industrial era, but of many divisions and many workers. As a result, the direct connection between labor and its result, characteristic of small-scale production, is lost.

And immediately the free-rider problem appears: a reduction in the intensity of work of one of the workers does not directly affect the total product of the company and may go unnoticed, and therefore tempts workers to work less than fully. Self-control of labor intensity ceases to serve as a way to increase production efficiency; a controlling authority is forced to take its place. The costs of monitoring the degree of intensity of labor (activity) of each production link appear and grow. The larger the firm becomes, the higher these control costs become.

The company as a separate subject of economic activity exists between two types of costs - transaction costs, which determine lower limit firm, its minimum size, and control costs, which set the upper limit, its maximum size.

The contract approach to the company allows us to distinguish two fundamental organizational forms of the company: U-form and M-form.

The U-form (from the English unitary) is characterized by low control costs and high transaction costs. The U-shape (unitary) shape characterizes an organization that focuses on producing one product or providing one service and in which the power to make decisions about long-term strategy and day-to-day operations rests with a relatively narrow group.

Rice. 4. Organizational form of the company: U-form (unitary)

This structure is advantageous due to its simplicity and small number of intermediate links. It is characterized by significant economies of scale and low organizational costs.

M-form - (from English multiproduct) - characterizes a company with many divisions that produces a large range of products, including the production of intermediate (semi-finished) products within the company. This form of organization is characterized by the decoupling of short-term decisions that are made at the departmental level.

Strategic decisions are made by the central directorate, they become its main function and to carry it out the directorate relies on a small group of experts. The emergence of this form of organization leads to the creation of multi-product companies of large size, which requires diversified investments and a well-calibrated strategy, since the company’s goals are not only the preservation and expansion of the market for existing products, but also penetration into new markets. This form of organization is characterized by high organizational costs.

Fig.5. Organizational form of the company: M-form

Principal-agent theory

Let's consider two concepts: “principal is the owner”, “agent is the trustee (manager)”.

In 1933, the book “Modern Corporation and Private Property” by A. Burley and G. Means was published.

In 1929, only 11% percent of US firms were controlled by capital owners. Reasons: consolidation of production, financing is carried out by many owners.

Separation of property from current control in large corporations it creates a conflict of interests between owners and managers.

The owner's goal is to maximize profits

The goals of managers are a quiet existence; prestige, luxury and spending on personal interests; professional interest.

The separation of ownership from control and the problem that arises means that there is actually a separation of ownership into several components: between ownership, which is exercised through the purchase and sale of shares and the receipt of dividends, and control, which is manifested in the day-to-day functioning of the company. Moreover, the owner of the company retains the function of ownership, and managers (especially the top level) have the function of disposal.

The conflict between the interests of owners and managers deepens due to information asymmetry. Because managers are closer to production, they have more information about the state of affairs of the company.

The problem of opportunistic (from the point of view of the owners) behavior of managers is solved by monitoring the activities of managers. There are several practice-tested ways to control and stimulate managerial behavior that would satisfy the interests of owners. However, none of the methods is a panacea.

Methods of monitoring the activities of managers include:

1) The activities of the board of directors (supervisory board), however, this is hampered, firstly, by the possibility of a conflict of interests within the board of directors, and secondly, by incomplete information about managers’ decisions and their consequences.

2) Decisions of the general meeting of shareholders. The general meeting of shareholders can regularly hear reports from managers and make decisions on their replacement. However, this method is not very effective when large number shareholders and irregular convening of meetings.

3) The threat of bankruptcy of the company, which may lead to a forced change of management.

4) Threat of merger or acquisition. A reduction in profits due to unfair or insufficiently effective management of the company leads to a decrease in value

Let's start our study of institutions with the etymology of the word institute.

to institute (English) - establish, establish.

An institution is a set of roles and statuses designed to satisfy a specific need.

Definitions of institutions can also be found in works of political philosophy and social psychology. For example, the category of institution is one of the central ones in John Rawls’s work “A Theory of Justice.”

Institutions mean a public system of rules that define office and position with corresponding rights and responsibilities, power and immunities, and the like.

In economic theory, the concept of institution was first included in analysis by Thorstein Veblen.

Institutions are, in fact, a common way of thinking as regards the particular relations between society and the individual and the particular functions they perform; and the system of social life, which is made up of the totality of those acting at a certain time or at any moment in the development of any society, can with psychological side be characterized in general outline as a prevailing spiritual position or a common idea of ​​a way of life in a society.

Veblen also understood institutions as:

Habitual ways of responding to stimuli;

The structure of the production or economic mechanism;

The currently accepted system of social life.

Another founder of institutionalism, John Commons, defines institution as follows:

An institution is a collective action to control, liberate and expand individual action.

Another classic of institutionalism, Wesley Mitchell, can find the following definition:

Institutions are dominant, and highly standardized, social habits.

Currently, within the framework of modern institutionalism, the most common interpretation of institutions is Douglas North’s:

Institutions are the rules, the mechanisms that enforce them, and the norms of behavior that structure repeated interactions between people.

The economic actions of an individual take place not in an isolated space, but in a certain society. And therefore has great importance how society will react to them. Thus, transactions that are acceptable and profitable in one place may not necessarily be viable even under similar conditions in another. An example of this is the restrictions imposed on human economic behavior by various religious cults.

In order to avoid the coordination of many external factors that influence success and the very possibility of making a particular decision, within the framework of economic and social orders, schemes or algorithms of behavior are developed that are the most effective under given conditions. These schemes and algorithms or matrices of individual behavior are nothing more than institutions.

“Old” institutionalism, as an economic movement, arose at the turn of the 19th and 20th centuries. He was closely connected with the historical direction in economic theory, with the so-called historical and new historical school (F. List, G. Schmoler, L. Bretano, K. Bücher). From the very beginning of its development, institutionalism was characterized by upholding the idea social control and intervention of society, mainly the state, in economic processes. This was the legacy of the historical school, whose representatives not only denied the existence of stable deterministic connections and laws in the economy, but were also supporters of the idea that the welfare of society can be achieved on the basis of strict state regulation of the nationalist economy.

The most prominent representatives of “Old Institutionalism” are: Thorstein Veblen, John Commons, Wesley Mitchell, John Galbraith. Despite the significant range of problems covered in the works of these economists, they failed to form their own unified research program. As Coase noted, the work of American institutionalists came to nothing because they lacked a theory to organize the mass of descriptive material.

Old institutionalism criticized the provisions that constitute the “hard core of neoclassicalism.” In particular, Veblen rejected the concept of rationality and the corresponding principle of maximization as fundamental in explaining the behavior of economic agents. The object of analysis is institutions, not human interactions in space with the restrictions that are set by institutions.

Also, the works of old institutionalists are distinguished by significant interdisciplinarity, being, in fact, continuations of sociological, legal, and statistical research in their application to economic problems.

The predecessors of neo-institutionalism are the economists of the Austrian School, in particular Carl Menger and Friedrich von Hayek, who introduced the evolutionary method into economic science, and also raised the question of the synthesis of many sciences studying society.

Modern neo-institutionalism has its roots in the pioneering works of Ronald Coase, The Nature of the Firm, and The Problem of Social Cost.

The neo-institutionalists attacked first of all the provisions of neoclassicism, which constitute its defensive core.

Within the framework of “modern” institutionalism, attempts are also being made to modify or even change the elements of the hard core of neoclassics. First of all, this is the neoclassical premise of rational choice. In institutional economics, classical rationality is modified by accepting assumptions about bounded rationality and opportunistic behavior.

Despite the differences, almost all representatives of neo-institutionalism view institutions through their influence on the decisions made by economic agents. The following fundamental tools related to the human model are used: methodological individualism, utility maximization, bounded rationality and opportunistic behavior.

Some representatives of modern institutionalism go even further and question the very premise of the utility-maximizing behavior of economic man, proposing its replacement by the satisficing principle. In accordance with the classification of Tran Eggertsson, representatives of this direction form their own direction in institutionalism - New Institutional Economics, the representatives of which can be considered O. Williamson and G. Simon. Thus, the distinction between neo-institutionalism and new institutional economics can be drawn depending on which premises are replaced or modified within their framework - the “hard core” or the “protective belt”.

The main representatives of neo-institutionalism are: R. Coase, O. Williamson, D. North, A. Alchian, Simon G., L. Thévenot, Menard K., Buchanan J., Olson M., R. Posner, G. Demsetz, S. Pejovic, T. Eggertsson et al.

Related information.