Inside and Outside Perspectives on Legitimacy: The Implications of Incentive-Incompatibility

23 Pages Posted: 15 Jun 2018 Last revised: 27 Jul 2018

Cameron Harwick

The College at Brockport SUNY

Date Written: July 17, 2018

Abstract

This paper discusses the implications of the impossibility of constructing totally incentive-compatible institutions, whether organizationally or politically. Specifically, drawing on the theory of cooperation, the paper argues that viable social organization requires a systematic divergence between subjective preferences and the objective fitness landscape. This implies the existence of irreducible and irreconcilable “inside” and “outside” perspectives on social institutions; that is, between foundationalist and functionalist approaches, both of which have a long pedigree in political economy. The conflict between the two, and the practical impossibility of dispensing with either, poses a challenge for an ethical institutional economics.

Keywords: Game Theory, Cooperation, Institutions

JEL Classification: C73, A13

Suggested Citation

Harwick, Cameron, Inside and Outside Perspectives on Legitimacy: The Implications of Incentive-Incompatibility (July 17, 2018). Available at SSRN: https://ssrn.com/abstract=3187581 or http://dx.doi.org/10.2139/ssrn.3187581

Cameron Harwick (Contact Author)

The College at Brockport SUNY ( email )

Brockport, NY 14420
United States

HOME PAGE: http://https://cameronharwick.com

Register to save articles to
your library

Register

Paper statistics

Downloads
28
Abstract Views
184
PlumX