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

See all articles by Ion Sterpan

Ion Sterpan

George Mason University - Department of Economics

Paul Dragos Aligica

George Mason University - Mercatus Center

Date Written: 2015

Abstract

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

Sterpan, Ion and Aligica, Paul Dragos, Transitions to Open Access Orders and Polycentricity: Exploring the Interface between Austrian Theory and Institutionalism (2015). New Thinking in Austrian Political Economy. Vol 19. 2015., Available at SSRN: https://ssrn.com/abstract=2928437

Ion Sterpan (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://ionsterpan.com

Paul Dragos Aligica

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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