Table of Contents

Handbook of Economics and Ethics

Handbook of Economics and Ethics

Elgar original reference

Edited by Jan Peil and Irene van Staveren

The Handbook of Economics and Ethics portrays an understanding of economic methodology in which facts and values, though distinct, are closely interconnected in a variety of ways. From theory building to data collection, and from modelling to policy evaluation, this encyclopaedic Handbook is at the intersection of economics and ethics.

Chapter 37: Institutions

Anne Mayhew

Subjects: economics and finance, behavioural and experimental economics, history of economic thought


Anne Mayhew Institutions are regular patterns of human activity and their attendant norms, folkviews, understandings and justifications. The original institutional approach to the study of economies followed from the observation that human activity varies, not idiosyncratically but rather in regular patterns across time and space. These patterns reflect inherited norms, which are themselves generated through time and by complex interactions between active human agents with cultural inheritances facing a variety of ecological systems. Human activity, as viewed by institutionalists, cannot be explained by simple recourse to human nature. While the biological nature of humans affects human activity in a variety of important ways, it does not determine it, for if it did, and granting a high degree of biological similarity across populations, there would be little variation. Nor can variation be accounted for by variation in exogenously determined constraints and incentives, for the important constraints and incentives are themselves largely institutional and therefore not exogenous to social systems. This chapter considers how this original, and still very important, approach to the study of human institutions is related to ethics, or the science of morals. The focus is on the original institutional approach, which is closely related to the pragmatic approach in philosophy. As will be noted later, a variety of rather different approaches have come to be grouped under the rubric ‘new institutional economics’, sometimes identified as NIE as opposed to OIE or ‘original institutional economics’. While the chapter gives some attention to NIE approaches, most is devoted to OIE.1...

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