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Institutionalist Frontiers of Theory and Methods

Paper Session

Sunday, Jan. 7, 2018 1:00 PM - 3:00 PM

Loews Philadelphia, Congress C
Hosted By: Association for Evolutionary Economics
  • Chair: Anna Klimina, University of Saskatchewan

To trust or to control: Informal value transfer systems and computational analysis in institutional economics

Claudius Gräbner
,
Johannes Kepler University-Linz
Wolfram Elsner
,
University of Bremen

Abstract

This paper illustrates the usefulness of computational methods for the investigation of institutions. As an example, we use a computational agent-based model to study the role of general trust and social control in informal value transfer systems (ITVS). We find that, how and in which timeline general trust and social control interact in order to make ITVS work, become stable and highly effective.

The case shows how computational models may help (1) to operationalize institutional theory and to clarify the functioning of institutions, (2) to test the logical consistency of alternative hypotheses about institutions, and (3) to relate institutionalist theory with other paradigms and to practice an interested pluralism.

The Rate of Change in Evolutionary Systems and Evolutionary Economic Modeling

Torsten Heinrich
,
University of Oxford

Abstract

In the most recent decades – starting with Bush's contribution in 1987 – several models have been developed to formalize the Veblenian approach to evolutionary economics. While this literature tradition has entered a fruitful exchange with Schumpeterian evolutionary theories and other traditions, the theoretical properties of evolutionary systems in economics are not yet well-understood.
Evolutionary systems are characterized by a process of change and generation of variety, and by environmental forces guiding this process. In evolutionary biology, this is represented by mutation and variation on the one hand and by selection on the other. Successful evolutionary entities need to be well-adapted in both dimensions. Excessive or insufficient variety generation are equally disadvantageous as adverse environmental conditions. Biological systems – organisms or ecologies – can be located at different points in this continuum. Some allow high mutation rates, others include large arrays of stabilizing factors. But how do evolutionary systems in economics behave in this respect? At what position in the continuum would they be found?
Evidence points to a very high rate of change in economic systems: the absence of structured codification (say, DNA), of sexual reproduction, and of redundant encoding; furthermore, the possibility of conscious interference. Though quantifying such a system in mathematical terms is difficult, this in itself has important consequences.
The present contribution aims to assess the expected consequences of high rates of change in economic systems in evolutionary terms and the possibility of formalizing the approach using patent data is laid out.

Big Data: An Institutional Perspective on Opportunities and Challenges

Baban Hasnat
,
State University of New York-Brockport

Abstract

Big Data, a popular phrase used to describe the massive volume of data generated by people, tools, and machines, have been made possible by technological innovations in processing, storage, and information and communication technologies and by changes in our work and life styles. Big Data is an endless source of data for economic and social world. Unfortunately, institutional economists have shown very little interest in it. A review of table of contents of JEI’s 2010-2017 issues found no article on Big Data. This is surprising since it should be appealing to institutionalist as it is the result of interplay of technology, analysis, and human habit and routine.
This paper plans to examine how Big Data can be useful to understand economic and social issues, with particular focus on economic development. Using some concrete examples, it plans to show the vast opportunities, as well as challenges, for reevaluation of hypothesis of human behavior and social process. It will contend that Big Data and data analytics, if used properly, can provide real-time actionable information that can be used to identify problem/need, offer service, and provide feedback on the effectiveness of policy action.
Inspiration of the study comes from Wesley Mitchell’s work on business cycles, who believed that “acquiring the facts” (Mitchells’ word) and “detailed shifting of data outside the context of a worked out model” (Hirsch, 1976, p. 206) is the right approach to understanding economic issues. For conceptual framework, the paper draws on Melody (JEI, Vol 20 (3), 1987) and Hodgson (JEI, Vol 34 (2), 2006).

Are we forgetting something? Remarks on the connections between Douglass North’s Contributions and Original Institutional Economics

Ramon Garcia Fernandez
,
Federal University of ABC (UFABC)
Manuel Ramon de Souza Luz
,
Federal University of ABC (UFABC)

Abstract

Douglass North’s latest works have become central to the current discussion regarding the differences and similarities between the New Institutional Economics (NIE) and Original Institutional Economics (OIE). This paper seeks to contribute to this debate offering a specific analytical perspective to evaluate North’s contributions. After defining a set of philosophical and methodological principles that specifies OIE, we seek to verify if and how North’s work relates to these foundations. We believe that this methodological perspective brings to light a fundamental issue not stressed by earlier analyses: the profound difference between the institutionalisms regarding the role of market order as a mechanism of human sociability.

Revisiting the Glorious Revolution: Property Rights, Economic Institutions and the Developing World

Adqas Afzal
,
National University of Sciences & Technology (NUST), Islamabad

Abstract

The paper evaluates the merits of New Institutional Economics versus the critical institutionalist method of institutional analysis. The paper sketches how the Glorious Revolution, a seminal event in British economic and political history, has been analyzed by NIE. This paper argues that the NIE analysis, in general, and that of the Glorious Revolution, in particular, shows a considerable amount of theoretical weakness. This paper utilizes the critical institutionalist (critical-realism and original institutional economics) method to present a comprehensive institutional analysis of the Glorious Revolution. The paper underscores the changing nature of resource distribution and culture in Britain as key variables. The paper also highlights the role of the Whigs as key agents in bringing about the events associated with the Glorious Revolution.
Discussant(s)
Avraham Izhar Baranes
,
Rollins College
JEL Classifications
  • B5 - Current Heterodox Approaches
  • B4 - Economic Methodology