Comparison of three major schools of institutional economics and Analysis

 Comparison of three major schools of institutional economics and Evaluation
First, the rise and the school system by
20 century and the twenties and thirties, the Western economic theory into a protracted economic crisis, 70 years since the 19th century has been dominated by the rise of new classical economics theory of spontaneous market balance seriously out of line with economic reality, the increasing loss of explanatory power of orthodox economics. caused the main reason for this disconnect comes from two major shortcomings of neoclassical economics, a isolated individualism assumption, one perfect market assumptions. In this assumption, the use of neo-classical economics the method of deductive logic of the economic process to the organic treatment, random and causal factors were excluded from the analysis outside the system, development of economic theory makes a similar mathematics, physics discipline. Keynesian revolution introduced a certain amount of ideological uncertainty, however, the new neoclassical synthesis subsequent formal processing through the Keynesian macro-analysis, a combination of Keynesian and neo-classical thinking, but dropped the Cairns on the risks, uncertainties and other revolutionary ideas and expectations. And such a comprehensive theory of neo-classical paradigm was a long time in economics, both as to maintain and strengthen the mainstream , making the entire foundation of economic theory has not been fundamentally touched. (Note: see Bell and Kristol editor of on the basis of traditional economics to develop. its founder, a combination of Darwin's theory of evolution who Bolun, the German Historical School, early American pragmatism of the analysis, the history of capitalism and the reality of in-depth analysis, from economics, anthropology, cultural studies, biology, etc. Talking about the economic and social problems perspective, the core of the steering system of economic analysis, the formation of the research method of economic problems institutionalism .20 century, where the system of Bolun scholars in the United States attracted wide attention and controversy. have created a system where the Bolun analysis of school, get in the Commons for further development of China Everbright. twenties and thirties of the 20th century, institutional economics in economic circles in the United States sent a university, not only become a major force in economic circles, but also had an important impact of government policies. the history of economic thought the incident took place during this period was called the The rise of system, school and other non-mainstream schools was ignored until the 60's, the resurgence of institutionalism. this period, there were two economists as the representative of the people called after the school system on behalf of institutional economics, and will be represented by a system such as Coase called the New Institutional Economics School. some academics have suggested a new points system that, according to the theory of association, the former is called New Institutional Economics No. 5).. taking into account the title of the new institutional economics has been used for the most people, this is still divided by the former method, these two school systems are called reality, the assumptions of mainstream economics, research methods produce less, thus turning institutionalism analysis. The most typical is Myrdal, according to their academic belief system by the neo-classical doctrine to change the the ability to solve practical problems belong to neo-liberal ideology in one, and the early theory to institutional economics is relatively small. New Institutional Economics as the system of neoclassical economics neglected the study. In their view, the most important and neo-classical long been overlooked the reality that the existence of transaction costs and the importance of the system, and ignore the reality of the premise of economics is not viable. pioneer of the new institutional economics Coase pointedly noted that the new classical economics, but a bunch of tools, research is committed to the early institutional economics, institutional economics and new institutional economics, after all, as the opposite of the neo-classical appearance three forms of institutional economics from different perspectives and dimensions of the paradigm of neoclassical economic theory was criticized are based system as the research object, starting from the analysis of the system to establish their own doctrine, but the perspective of the system and methods and different, each theoretical characteristics, with a strong comparable. in which the early system of school and Theory after the school system there are more theoretical inheritance, and new institutional economics and the first two quite different, this article will be after the early institutional economics and institutional economics are compared on this basis, and then compare the former Both the similarities and differences with the new institutional economics.
Second, the early post-institutional economics institutional economics and comparative economic systems
School and the early post-institutional economics theory has a certain relationship between heritage, common features in theory more prominent. can be summarized as two common characteristics of the following six aspects.
(1) Culture and the overall point of view. the early system of economics, the economy as an integral part of culture, from the whole study the evolution of the economy . that society is based on the system, habits, attitudes and values of dynamic composition of the organic complex, and therefore must be comprehensive manner possible to evaluate and adjust. in the system analysis, the focus of family, national, legal, cultural, political, and other institutional arrangements as a whole, the nature, evolution and its impact on the economy. Institutional Economics Institutional Economics to the post after the development of its core is still the overall evolution from the perspective of the analysis system, and processing system as a variable to understand and grasp of human behavior and make policy recommendations accordingly. Galbraith clearly expressed their view of holism: complementary parts, or conflicting, or because of the presence of each other, the image of the common changes, the situation certainly is. 3.)
(2) process and the evolution point of view. From the early evolution of institutional economics, the evolution of the overall system perspective. early representative of one school of institutional economics where Bolun first proposed the term evolutionary economics and on this basis, the creation of school systems. This idea was later inherited by the post-school system and development. Therefore, whether early or after the system of institutional economics school of economics are affected by Darwin's theory of evolution, the evolution as is to understand the capitalist economy, technological and institutional changes in the basic method, that economics should seize the evolution of this central theme, rather than follow the neo-classical economics, the idea of static and balanced. in the evolution of the system concept, the development of things does not exist as a basis to analyze and understand the formation and evolution of the system. by the philosophy of pragmatism, they think, is in such a technology, population growth and social change dominated the world, the direction of social progress, not to any final or a predetermined arrangement direction of social and cultural development. This belief stressed that while individual behavior is on purpose, but because of the uncertainty and the existence of strange events, socio-economic development is not teleological way to start the process, evolutionary process does not need to become efficient and optimal results.
(3) more emphasis on power rather than price. in the economic system, what is the most critical factors? orthodox economics that is the price. early system advocates and post system does not negate the price to play in the economic system, the universal and important role, but do not think the price is the most important or even the only factor. In their view, the system is determined by the power structure of the decision The most basic factor in the allocation of resources. They pointed out that simple condition for stable equilibrium and optimization technology, the economy would be obscured by the choice of the basic power and features. In the real world should be concerned not with how the opportunity set to choose among, and is concerned about how the opportunity set is formed. that is, balancing optimization problem with the background in the system only makes sense that only can be solved through institutional adjustments.
(4) pragmatism orientation. pragmatism is an early system of economic After learning and a common philosophical basis of institutional economics, institutional theory in both the pragmatism has obvious color, that is, that human reason can carry out the purpose of the system, intervention, human beings can change their own preferences to the social system. Where Bolun the system is defined as a popular habit of thinking, and habits are lagging behind, technology is the forward. there is the contradiction between man's intervention provides a logical premise. Thus, despite any Bolun and vote directly show that the rational design of the system point of view, but its methodology dichotomy of human intervention in the system provided a rational logical basis. pragmatism after the color of institutional economics institutional economics should be more intense than the earlier number. After the system economics and public policy more closely linked to the institutional arrangements as the choice of variables to solve practical problems, the goal to achieve public goals. We will be back after an early system of economics and the differences in institutional economics addressed this issue more.
(5) collective methodology. According to the traditional concept of economics, economics is the study of how individuals in the face of scarce resources to choose to maximize my own desires. early system after the system of economics and economists do not deny that a personal choice, but that this choice is not isolated, but in the culture within the framework of choice. Economics is the study of the cultural framework. They will be the economic system as a an integral part of social culture, the nature of the economic system by its social and cultural environment in which the decision.
(6) beyond the concept of value beyond the market price of the so-called higher interests of mankind to study the social requirements. They believe that the value of a system made by individuals or judgments. value of the answer here is to regulate the study of ; the problem. the application of the chosen code or standard to determine whether certain types of behavior or state is the ideal objective. What kind of institutional change is beneficial? their use on this issue is not efficiency standards, but ; social value should also consider the addition of social values, Galbraith called the Both sides in this debate is not expected to have any compromise.
not just after the institutional economics school of thought on the early system of duplication, but has its own characteristics and development. there are some between differences can be analyzed from the three main areas.
(1) philosophy based on the difference. After the early institutional economics and institutional economics are based on pragmatism as a philosophy, this is their theory, there are some commonalities Origins. difference is that the philosophy of early systems based on economics, Peirce and James and others earlier pragmatism; then the philosophical basis of institutional economics is the pragmatism of John Dewey. Meanwhile, the early institutional economics and post- institutional economics are deeply evolution, historical school and the impact of socialist ideology. So in their theory of evolution can be seen profound concept of holism features. But for the former, we see more or Germany, the UK new school history, Darwinian evolution, psychological determinism. while the latter has clearly adopted the evolution concept, holism, collectivism, anthropology and methodology of economic behavior and system structure, historical and socio-cultural analysis, even class analysis.
(2) Institutional Economics after the tool has a more obvious approach of rationalism. After the system inherits the Commons Economics of intellectual tradition. stresses the role of incomplete markets, more specifically the government on the economy Intervention and the practical range of policies and proposals are the characteristics of post-institutional economics. After the system works and more economists and public goals, public policy, such as Galbraith's Bromley's pointed out that the so-called After the system of policies and proposals are part of the economic theory of the essence.
(3) and the neo-classical theory of the different relationships. neo-classical theory is based on preferences, the system of parameters on the basis of the given to the price mechanism as the core, Methodological individualism and balanced analysis as the main mode. early institutional economics paradigm of this theory conducted in-depth criticism, and the establishment of a set with all aspects of the system of neo-classical analysis of different systems, and new classical theory stands in sharp contrast. After the system of neo-classical economics, it is also the theory of intense criticism, revealing the role of the market is incomplete, stress the importance of government policies, institutional reform to regulate the economy and achieve social goals, but after system did not completely deny the new classical economics, the analysis tool. In fact, after the use of the new institutional economics is still part of classical analysis tools for public policy analysis. After the theory of institutional economics, especially public policy theory, the objective formed a complement neoclassical market theory, the two can converge to a certain extent.
Third, new institutional economics and institutional economics early, Comparative Institutional Economics after the New Institutional Economics and the early system
There is some economic theory origin. some of the new institutional economics theory and basic concepts inspired directly or indirectly from the early institutional economics, in particular the ownership of Commons earlier studies of economics and law. For example, Common Christie out that the original meaning of the real property does not mean material things, but something that the absolute use and handling of the rights, property always holds, retention, transfer, acquisition and without interference associated rights; and pointed out that the Commons system of economics in particular, the existence of a theory to be sure. But the new institutional economics and institutional economics and the early post-institutional economics and economic reality of system understanding and analysis of essential difference exists, belonging to two different theoretical systems.
(a) of the two different systems of law: the dichotomy of early and transaction cost
Institutional Economics Institutional Economics and later from a cultural point of view of the overall economic and institutional, that the economy is a cultural process. The culture is a whole category, expressed as two aspects, namely, aspects of the system and technology aspects are reflected in the philosophical sense is the ritual and tools. early institutional economics is from the system and technology, rituals and tools to look at the dichotomy to explain economic development. any economic system or economic order is constituted by the two types, one is the behavior of technical features, that tool, the constructive instinct of human technological advancement is the main factor ; the other hand, the ceremony features of behavior, that is the system. technology is characterized by the development, and features of the ceremony is static and bound to change or transformation of conflict. Where Bolun the system as a habit of thinking, then system is always the product of past experience, always lags behind the development of society, especially social development lags behind the determinants mm technology development. between the two rival constitute a pair of contradictions. social and economic process is always in the conflict between the two. the progress of the technical act of ritual is to overcome and replace.
any system, the system will have a vested interest groups formed, so the system is conservative.'m a social development technology has to overcome the system resistance to the process, society is in conflict, these two forces forward. When the system structure include the factors conducive to more technological advances, social progress has become even more obvious, otherwise restrict the economic development. All Bolun that the capitalist system and its economic system is the counterweight to the power of two components: one is to maintain the existing system of vested interests, mainly the production of material goods is not directly involved in the industrial giants, merchants and financial home; the other is required on behalf of the technological advances of technology workers, engineers and the general public. vested interests continue to strengthen in favor of their own social norms, control system response to changes in technology, it is the capitalist of all social and economic problems source.
the cost of running the system can be said to study other systems with new institutional economics school of distinction lies. almost all the economic theory of the end result of the new system are based on on. transaction costs for change of the neo-classical economics, the enterprise as a production function, market transactions and the instantaneous state of zero transaction costs, that economists to rethink the business reason for the existence of different forms of corporate organization and contracts and changes in reality. New Institutional Economics and the central theme is: as long as the presence of transaction costs and ownership structure on performance impact on production. From the beginning of the property rights of Coase's main purpose is that theory to explain the social and economic activities in which people efforts to reduce transaction costs caused by the size of the organization's decision, the choice of markets and hierarchies and the evolution of social systems and the internal mechanism change.
So, if the traditional system in the Economic Vision is an evolution of the the system as a whole, then focus on the new institutional economics is based on the transaction costs of different forms of performance and selection system. caused by the presence of transaction costs shape the existence of different systems, the existence of multiple forms of the system is saving transaction costs, a result of the efforts. in the conditions for the existence of transaction costs, different ownership structure will produce different efficiency, the pursuit of efficiency and transaction costs would make the parties to choose the smallest systems, which will be the existence of different institutional forms. North pushed it more succinctly summarized as follows: the system is important. It is based on transaction cost, the analysis of the formation of a new paradigm, the depth of economic analysis to the specific institutional structure of production, making the choice of system, system performance Study and comparison possible.
(b) the decision of human behavior: Cultural Perspectives and cost perspective
early institutional economics, post-institutional economics and New Institutional Economics Perspective on the dividing line between the system , also reflected in the analysis of human behavior. Where Bolun of the neoclassical rational habit of covering the activities of complex human ideas criticized. Where Bolun that the economic system, the individual is a product of culture, personal behavior by the social environment and co-dominant human instinct. human action is his genetic characteristics and the results of past experiences, actions can not be used to understand the effectiveness and cost calculations, but should be from the people's to find the decision to re-conduct environmental factors. Therefore, the decision of economic behavior, the behavior of people who Bolun persist with the genetic characteristics of the individual analysis of the environment, and many insist that it is a variety of factors that determine people's economic behavior. After the system is basically inherited the economic point of view.
school also recognizes that the new system neo-classical assumptions. transaction costs in a series of Williams School of representative markets and levels of study, depends on the person's cognitive ability is the premise advocated by Simon's 1979), the efficiency of information dissemination by human reason and the ability to receive information and other constraints, only at the desire of the reasonable and certain restrictions between the fall of non-rational behavior and super-reasonable middle ground between the calculated behavior. From , that is neo-classical, based on budget constraints, increase the information constraints. This transaction costs through the use of a new exposition and maintain the core of neo-classical rational choice.
(c) views on the role of the market: the two fundamental differences between the role of the market where the
issue has been an early system of economics, school of economists after the system and to Coase, Demsetz new system as the representative of the fundamental differences between the economic school of thought which economists.
Commons that the market order, not just the result of the invisible hand, but also from the collective action created a conflict of interest in the relationship between the interests of the product. Commons also believe that if Smith recognized this, he will found, not an invisible hand in guiding the individual's self-interest comes to the public welfare, but that the visible hand of the ordinary courts to take a good time and local customs, so some stubborn and unruly individuals must comply with , in line with Hume so-called analysis. The usual view is that collective action means that the force, but force does not exist in the market. The fact is that both market and limit collective action and the liberation of individuals. the market adoption of the budget constraints of individual choice, collective action through the provision of personal choice set restrictions on personal choice. that the budgetary constraints on individual choice of the acceptable range of violations than individual acts of a collective decision on the infringement of personal choice is less, it is not the difference for the difference. For example, the rich have more choice, They can choose not to sell their labor to others, while poor people have to go through constraints, such constraints are far more than the weak constraints of collective action. Therefore, Bromley suggested that the surface of the free market, or there is no mandatory, in fact, through further examination, the conditions required to solve the problem than has more.
new institutional economics is the essence of the proposal by the concept of transaction costs, the cost to the neo-classical way of m-benefit analysis to the system of unified field. In this way, systems and commodities, are all available in the voluntary market transactions optimized and balanced. and the neo-classical, as in this new field, the market still plays the role of the core role. new system of schools of thought the same as neoclassical, only to see a transaction or between them contractual relationships, and turned a blind eye to their relationship behind the force. New Institutional Economics theory of efficiency-oriented system is not out of , which were interpreted as attempts to system-driven economic benefits, the process of foreign students on the market reaction is not balanced. They tried to appear the opportunity to increase revenue from the overall economic efficiency or to explain the changes in the institutional environment. However, as the burro Bromley criticized, . in the search for cost-effective system based on the changes proposed model is circular reasoning. institutional arrangements determine what is efficient, which is generating the reason for such a circular argument. mm the theoretical basis of public policy, determined not only by the exchange of these basic processes, but also the foundation itself.
(d) the difference between methodology: collectivism and individualism
new system of school with the other two systems can also be from different schools of methodology perspective. For the analysis of human behavior, there are two basic methodology, that is, individualism and collectivism. Generally speaking, individualistic methodology is through the study of individual phenomena and processes to understand the general, methodological collectivism is through group phenomenon or process studies to understand the world. directly from Adam Smith, Marshall's methodological individualism through the classical and neoclassical economics, political economy, characterized by emphasis on the individual meaning of existence and interests of independent feature, recognized self-interest, advocated the adoption of the arrangements between individuals to solve the problem, emphasizing the individual response to external constraints, neglect and the system of interrelated and impact mechanism. the early system and post system, a striking feature is the doctrine of collectivism-based methodology . They think that the isolation of the individual is non-existent. On the contrary, it is the More importantly, but also by the following factors: social experience, the interaction between people, such as the evolution of the learning process. rational decision-making can not be independent of the personal and unique culture as a whole exists, this does not mean that no rational person but to recognize the impact of culture on individual and personal as an integral part of culture. And, personal behavior and collective behavior is not equal. They believe that society is not, nor should be understood as the simple sum of individual behavior, especially its the formation and change goals (Hodgson, 1988; Miller, 1989; Zhang Yuyan, 1994). the system and society as a whole has its own sports and cultural characteristics, can not be broken down into individual behavior and. Therefore, through the study and description of the system in order to best understand the economic behavior of individuals and personal belief that such behavior.
new system of school is also aware of the limitations of methodological individualism, which also has some of the collective tendency. This tendency, especially seen in the new economy history theory, particularly with the North on the collectivist ideology of the color. But in the end, whether the new economic history, property rights theory, transaction cost theory or other theories of new institutional economics, individual as the atomic maximize the wealth of subject is always the basis of the analysis. New Institutional Economics in the methodology relative to the neo-classical economics, and not much innovation, is still individualistic.
four, their impact and limitations < br> Early Institutional Economics, Institutional Economics and New Institutional Economics, after all the criticism on the basis of the new classical theory developed. early institutional economics reveals the static traditional economics, the characteristics of a narrow and unrealistic, with critical depth, and overall, the system analyzes the perspective of the system, to seize the system pointed out that the only neo-classical economic analysis of individual acts and conduct simple sum, while not considered the role of the system of this methodology is divorced from reality. Therefore, early system of the proposed school is the significance of methodological collectivism can not be ignored. However, the implication of early institutionalism system as a whole is difficult to quantify the evolution of thinking, more difficult to model, making the schools of thought have remained out of sight in the mainstream of the analysis.
inherited after the Institutional Economics The main idea of early institutional economics, the economics as a service function in the human sciences, research and government policies and the system closely linked, reflecting the more obvious tools to rationalism. made after the school system , institutional arrangements and other policies, to achieve social goals as the choice of variables to consider. can be said that the early post-institutional economics institutional economics is more than adhere to a clear-cut normative analysis, stick to their sense of value. This view is the economy in the post system Bromley passage scientists to get a clear expression: more lofty goals of economic system, it will be abandoned. In this post-ideological age, the only important task is to design an ordered relationship, which constitutes the economic system is running. Lee to refute the view that the so-called A new institutional economics and mainstream economics, including different values, forming a sharp contrast with mainstream economics.
new institutional economics in the original production cost of the new classical economics a constraint of the conditions of this , we introduce another constraint - transaction costs. Relying on the concept of transaction costs, new institutional economics, mainstream economics also accepted by mainstream economics, which have developed rapidly and attention. in the methodology, new institutional economics is basically individualistic methodology continues, it still recognizes the personal characteristics of economic behavior, but, ...