- New Thinking in Political Economy series
Chapter 7: Intra-European divergences at the time of the crumbling welfare state
Major works of traditional economic historians, as well as those representing the ‘new economic history’, such as Nobel Prize winner Douglass C. North, point out that good, that is, efficient, institutions have been a rarity in human history. Various states chose as a rule bad institutions (and, let me add, within institutions chose even more often bad policies). Answers to the question why this has been the case have concentrated on the structure of incentives. The assumption has rightly been made that it is in the interest of the ruler or a ruling elite to establish institutions (rules of the game) that benefit first of all those who rule, as well as those who are the pillars of their rule. And these choices have been made in full consciousness of the fact that other institutions could create more wealth. The problem is that, although concentration on the structure of incentives has impeccable credentials in economic theory, there is ample, if not actually overwhelming, evidence that quite often ruling politicians made choices that were actually injurious to their own important interests. More than that! The choices they made of these (bad) institutions were widely supported by both the intellectual elite and the masses.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.