Transitions to Open Access Orders and Polycentricity: Exploring the Interface between Austrian Theory and Institutionalism
New Thinking in Austrian Political Economy. Vol 19. 2015.
22 Pages Posted: 8 Mar 2017
Date Written: 2015
This paper explores the interface between institutional theory and Austrian theory. We examine mainstream institutionalism as exemplified by D. C. North in his work with Wallis and Weingast on the elite compact theory of social order and of transitions to impersonal rights, and propose instead an Austrian process-oriented perspective. We argue that mainstream institutionalism does not fully account for the efficiency of impersonal rules. Their efficiency can be better explained by a market for rules, which in turn requires a stable plurality of governance providers. Since an equilibrium of plural providers requires stable power polycentricity, the implication goes against consolidating organized means for violence as a doorstep condition to successful transitions. The paper demonstrates how to employ Ostroms’ Bloomington School Institutionalism to shift, convert, and recalibrate mainstream institutionalism’s themes into an Austrian process-oriented theory.
Keywords: institutionalism; market process; polycentricity; open access orders; impersonal exchange
JEL Classification: B52, B53, D72, D74
Suggested Citation: Suggested Citation