Economic Analysis Of Institutions And Systems (international Studies In Economics And Econometrics)

In the late 1980s, the field of comparative economics and NATO faced a similar problem: the threat of obsolescence. A predictable reaction of those who had made major investments in both comparative economics and NATO was to look for a new job. It was time to say: comparative economic systems are dead, long live comparative economic systems. The purpose of this book is to redirect study of what we called comparative economic systems toward analysis of the development of institutions and the effects of alternative institutional arrangements on economic performance. To that end, the book internalizes into a theoretical framework (1) the effects of alternative property rights on the costs of transactions and incentives structures, (2) the effects of the costs of transactions and incentives on economic behavior, and (3) the evidence for refutable implications of those effects. Analysis here focuses on the issues, propositions and conclusions that lend themselves to the only known scientific test: empirical verification. Thus, this book is not about what socialism or capitalism could have been, should have been, or should be. Nor is it an ode to capitalism. Its purpose is not to assert that capitalism is a better economic system than socialism. The history of this century and the market for institutions have done that. My purpose is to explain what is it that makes the institutions of capitalism better in terms of economic outcome than all other alternatives that have been tried since the beginning of recorded history. Front Matter....Pages i-xiii Front Matter....Pages 1-1 Important Concepts in Economics....Pages 3-7 The Coase Theorem and Transaction Costs....Pages 9-19 Front Matter....Pages 21-21 Institutions....Pages 23-38 Law and Institutions....Pages 39-55 Property Rights....Pages 57-70 Capitalism and Socialism....Pages 71-93 Front Matter....Pages 95-95 Private Property Rights, Exchange and Production....Pages 97-110 Restrictions on Ownership, Exchange, and Production....Pages 111-122 Free-Market Economies, The State, and Policy-Making....Pages 123-137 Property Rights in Socialism, Exchange and Production....Pages 139-149 Trade (Exchange) and Growth Under Different Institutional Arrangements....Pages 151-164 Front Matter....Pages 165-165 The Firm and Contracts....Pages 167-180 Capitalist Firms....Pages 181-194 Socialism: The Labor-Managed Firm....Pages 195-206 Property Rights, Business Firms, and Innovation....Pages 207-214 Back Matter....Pages 215-217 The purpose of this book is to redirect study of what are called comparative economic systems toward analysis of the development of institutions and the effects of alternative institutional arrangements on economic performance. To that end, the book internalizes into a theoretical framework the effects of alternative property rights on the costs of transactions and incentives structures, the effects of the costs of transactions and incentives on economic behavior, and the evidence for refutable implications of those effects