Institutions, Contracts and Organizations
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Institutions, Contracts and Organizations

Perspectives from New Institutional Economics

Edited by Claude Ménard

This outstanding book presents new original contributions from some of the world’s leading economists including Ronald Coase, Douglass C. North, Masahiko Aoki, Oliver E. Williamson and Harold Demsetz. It demonstrates the extent and depth of the New Institutional Economics research programme which is having a worldwide impact on the economics profession.
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Chapter 3: Institutional evolution as punctuated equilibria

Masahiko Aoki


11 3. Institutional evolution as punctuated equilibria Masahiko Aoki* ECONOMISTS’ VIEWS OF INSTITUTIONS Where do institutions come from? What role do they play? How do they interrelate with one other within each economy and across economies? Can they be designed to change? Needless to say, these questions are impossible to answer without making explicit what is meant by institutions. However, leaving aside the old school of institutional economics, economists were largely content to leave the definition of institutions more or less vague. It is only recently that a few of them have taken up the task of conceptualizing institutions. Durkheim, a pioneer of modern sociology, once defined the discipline of sociology as the ‘science of institutions’ (1901) in contrast to that of economics as the ‘science of markets’. Mainstream economists might have thought likewise that such a task was outside the realm of economics. However, economists can make unique contributions to understanding the nature, origin, roles and consequences of institutions, but we must first make clear what we are talking about. There are at least three different (although interrelated) meanings that economists attach to the word ‘institution’. What we should be concerned with is obviously not a semantic clarification of the word as such, but a conceptualization that may be conducive to a better understanding of the workings of diverse economic systems by facilitating analytical insight. In order to clarify the differences among the three meanings, or conceptualizations, of institutions that economists use, an analogy of the...

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