- Elgar original reference
Edited by Peter G. Klein and Michael E. Sykuta
Nicolai J. Foss and Peter G. Klein Ever since its emergence in the early 1970s (for example, Williamson 1971; Alchian and Demsetz, 1972; Furubotn and Pejovich, 1972; Arrow, 1974; Jensen and Meckling, 1976), the new institutional economics (NIE) has been the subject of intense debate. As the most important constituent body of thought in the NIE, transaction cost economics (TCE) is no exception. Much of the debate on TCE has been ‘internal’, in the sense that it has been conducted between scholars generally sympathetic to the approach (for example, Hart, 1995; Kreps, 1996; Furubotn, 2002; MacLeod, 2002). However, there also is a large set of ‘external’ critiques, arising from sociologists, heterodox economists, and management scholars. For instance, early critics argued that TCE ignored the role of differential capabilities in structuring economic organization (Richardson, 1972); neglected power relations (Perrow, 1986), trust, and other forms of social embeddedness (Granovetter, 1985); and overlooked evolutionary considerations, including Knightian uncertainty and market processes (Langlois, 1984). Such critiques have been echoed and refined in numerous more contemporary contributions, and criticizing TCE remains a thriving industry. The incumbents are mainly sociologists (Freeland, 2002; Buskens, et al., 2003) and non-mainstream economists (Hodgson, 1998; Loasby, 1999; Dosi and Marengo, 2000), but new entrants are increasingly recruited from the ranks of management scholars (Kogut and Zander, 1992; Conner and Prahalad, 1996; Ghoshal and Moran, 1996). This chapter offers a brief review and assessment of this critical literature. By no means do we claim to be comprehensive; unavoidably many authors, papers,...
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.