May 26, 2022
How many undergraduate economics programs offer courses in institutions and/or organizations? That is, courses within the tradition of a broadly-defined New Institutional Economics? Not many. But I wanted to take the opportunity to highlight some of the best ones I’ve seen.
1.
Unsurprisingly, both the Ronald Coase Institute and the Society for Institutional and Organizational Economics (SIOE) provide extensive NIE reading lists.
2.
At Wesleyan University, Richard Adelstein (used?) to teach a course simply called “Institutions.”
3.
Daniel Berkowitz at Pitt teaches an NIE class very much focused on what Langlois here calls the “second strand.” As does Avner Greif at Stanford.
4.
An old course co-taught by Rob Fleck and Andy Hanssen at Montana State explored the NIE through applications to Ancient Greece. Fun.
5.
Not sure if Richard Langlois’ course on The Economics of Organization is open to undergraduates, but it’s a fantastic survey. At nearby Allegheny College, Tomas Nonnenmacher also teaches a class on “Organizations and Contracts.”
6.
From Ennio Piano, here’s an institutions syllabus, disguised as an economic history class.
7.
The most comprehensive syllabus I’ve seen is Chris Kingston’s at Amherst College. His course is called “Economics of Governance and Institutions.” His list of prior paper topics is also fantastic.
Kingston’s paper with Greif, “Institutions: Rules or Equilibria?” has been influential on my own thinking. They write:
“A growing body of recent research on institutions…endogenizes the “enforcement of the rules”, by studying ‘institutions-as equilibria’. This perspective focuses on how interactions among purposeful agents create the structure that gives each of them the motivation to act in a manner perpetuating this structure. To give a simple example: in the United States, people (nearly always) drive on the right-hand side of the road. This regularity of behavior generates expectations that motivate the behavior itself: people drive on the right because they expect others to do so, and wish to avoid accidents. Of course, it is also a “rule” that one must drive on the right. However, many alternative technologically feasible rules (for example, women drive on the right and men on the left) would generate expectations which would fail to motivate a pattern behavior consistent with the rule: that is, such patterns of behavior are not equilibria, and even if they were formally specified as a “rule” we would not expect them to emerge as institutions, because the “rule” would not be self enforcing. For everyone to drive on the right, however, is one of two potentially self-enforcing “rules” which could emerge (or be enacted) as an equilibrium.
The crucial point is that while a “rule” may serve as a coordination device, it is fundamentally the expected behavior of others, rather than the rule itself, which motivates people’s behavior. A similar logic can be used to examine economic, political, and social institutions even in situations involving specialized actors and more complex formal “rules”. From the institutions-as-equilibria perspective, it is always ultimately expectations about the behavior of the other actors (including those in specialized enforcement roles such as police, judges, etc.) that create the institutional constraints which mold people’s behavior, and all such behavior must therefore ultimately be explainable endogenously as part of the equilibrium.”
Themes that, in my view, Langlois also touched on in an old 1992 book chapter. So far as I can tell, these courses and papers all take rational choice seriously, but as if the choosers were human.
I teach a seminar in “organizational economics,” and I’ve been impressed with all aspects of my students’ work. From idea generation to execution, my students demonstrated a scholarly maturity beyond their years. Here’s a sample of some of the questions my students have examined through their research projects:
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Why schools are non-profits
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How CSA’s commit to providing high-quality produce in the absence of formal contractual stipulations
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Why violence is so prevalent in black markets
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How private parties supplied firefighting in Colonial America
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Why dower payments persist in the Islamic world
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Why German soccer leagues are owned by their fans