Institutions: A Research Program for Law, Macroeconomics, and History
23 Pages Posted: 6 May 2020
Date Written: April 17, 2020
It is a common scholarly lament that definitional imprecision leads to theoretical confusion. Such a lament seems well placed in institutional history, where two key terms—institutions and organizations—are used by many historians as essentially synonymous. Meanwhile, new institutional economists who delve deeply into economic history see the concepts as terms of art: institutions are the “rules of the game” or “equilibria” whereas organizations are agents that seek to optimize scarce resources and otherwise operate within the constraints created by these institutions.
In this Article, I argue that a new institutional synthesis in history, legal scholarship, and economics represents a challenge to both definitional approaches. It also represents an opportunity to define a new, intellectually energizing path ahead of legal scholarship on institutions. Without doing so explicitly, a new generation of legal scholars have profitably explored institutions as both organizations and rules, neither too closely wedded with a single organizational entity nor lost in the long and slow change of the rules over millennia. These scholars have begun to see how formal and informal rules that govern politics, society, and the economy change through organizations in both short bursts and over long horizons. The key insight is that the new institutional synthesis can build a theoretically robust methodology that is flexible enough to be deployed in a wide array of disciplines, including law, history, economics, sociology, and beyond.
Keywords: institutions, new institutional economics, financial regulation, economic history
JEL Classification: e02, e58, k2, k4, n00, n20
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