Review of innovation related typologies and models analytical framework. Introduction to innovation and patent economics at micro and macro levels. Overview of the multi-national patent system and its institutional structure.
Although widespread agreement exists on the general importance of workforce skills for economic growth and the regeneration of regional economies, much of the existing research is hobbled by imprecise measurement and the use of vague proxies for skill such as years of education. As a result, many of the existing policy recommendations on this topic consist of unhelpful exhortations to "get more education." In this chapter, the author argues that a critical need exists for research into the impact of precisely measured skills. The author further argues that in order to understand the potential and challenges of skill-related economic development policies, it is necessary to go beyond the assessment of individual skills by paying attention to both the institutions that produce skills and the interplay of supply and demand for skills. After a review of the current state of knowledge across multiple disciplines, the chapter concludes with promising avenues for future skill research.
Paul Castañeda Dower
Productivity in agriculture has been one of the main challenges to economic growth. Since climate change disproportionately affects agriculture and the rural poor, a new set of challenges is emerging. Institutions will influence the economic impact of these changes, but they themselves may be shaped in response. Therefore, institutional analysis is vital for policy design and a better understanding of these pressing global issues. Additionally, the particular nature of agriculture and agricultural organization presents an especially vibrant area to study the interaction between institutions, economic growth and climate change.
Rule of law is commonly believed to be a prerequisite for long-term sustainable growth of a modern economy, where uniform and formal rules apply to all parties in predictable and non-discriminatory ways. During its economic reforms in the past four decades, China has relied upon many alternative arrangements that have served the main function of providing incentives for different groups of economic agents, but are not in line with the spirit of rule of law. Consequently, an important topic for future research is to test the validity of this argument: will China be able to maintain its long-term growth without fundamental changes in its institutional environment? Alternatively, will substitution mechanisms continue to induce effort and promote growth effectively? Another possibility is that we may have missed the improvement of rule of law during China’s reform era, perhaps due to lack of accurate measures. Thus, how can we better measure the institutional quality of various Chinese regions? And finally, what explains evolution of economic institutions in China and how does it relate to that of political institutions? Answers to these questions will undoubtedly help shed light on our understanding of institutional evolution in general.
Given that institutions are “humanly devised” (North, 1991, p. 97), what determines which institutions are chosen? Different societies have different understandings of how the world works and consequently tend to choose different institutions even when pursuing similar purposes. Therefore, culture matters, as culture determines the mental models that people use to understand and interpret the world, including beliefs, values and preferences. Yet culture has been relatively absent from economic inquiry, even among economists that focus on institutional economics. In this chapter, I review an emerging literature that focuses on understanding the interrelationship between culture and institutions. This literature shows that not only does culture influence which institutions different societies choose and how they work, but also that institutions can subsequently feedback and affect culture. That is, culture and institutions coevolve. This literature is still in the formative stages and there are many research opportunities for the interested researcher.
Kyle J. Mayer
Transaction cost economics has led to a variety of insights into how firms govern transactions across firm boundaries. Research in this area has focused primarily on the attributes of the transaction as drivers of governance choice. Additional work is needed to better understand how cognitive and contextual factors influence governance choice and ultimately transaction and firm performance.
Though pathbreaking scholarship has placed collective action problems at the core of economic development, our knowledge is still incomplete about the sources of stable collective action. This chapter focuses on continuing questions surrounding the role of collective action in the shaping of government policy. To what extent do informal norms of cooperation allow citizens to act collectively to influence government? Organizations, particularly political parties, can solve citizen collective action problems. When do policy-based – programmatic – parties emerge that allow for collective action around policy issues? State capacity is most accurately seen as a quality of public sector organization: can public sector organizations mobilize public sector workers in the collective task of serving the public interest? However, governments take starkly different attitudes towards improving state capacity. What explains this variation? This chapter suggests that these questions should be at the core of future research on institutions and development.
Ricard Gil and Giorgio Zanarone
Given the increasing role of creation and innovation in the world economy and the pervasive informational problems that plague contractual relationships between firms and creative agents, innovative industries constitute a natural and intriguing battlefield for researchers interested in the study of organizations, institutions, and governance. This chapter draws on organizational economics to illustrate the contracting frictions and governance solutions that arise in industries and processes where innovative and creative efforts are the key inputs. We point out open questions and gaps that emerge from the existing empirical evidence and provide recommendations that we hope will inform future researchers, industry practitioners, and policymakers.
Miriam A. Golden
Corruption is common in poor and middle-income countries, but relatively infrequent in wealthy ones. How does corruption decline with modernization? In this chapter, the author considers two ways that analytical tools that derive from the New Institutional Economics may contribute to a better understanding of corruption and modernization. First, even where laws prohibit corruption, it often persists. How do cultures of corruption develop, and how can they be changed? Second, how do anti-corruption interests organize politically to change institutions that facilitate patronage and discretion, replacing them with meritocratic, formula-bound ones?