This book examines and
compares the two major traditions of institutionalist thinking in economics: the 'old'
institutionalism of Veblen, Mitchell, Commons, and Ayres, and the 'new'
institutionalism developed more recently from neoclassical and Austrian sources and
including the writings of Coase, Williamson, North, Schotter, and many others. The
discussion is organized around a set of key methodological, theoretical, and normative
problems that necessarily confront any attempt to incorporate institutions (defined to
include organizations, laws, and social norms) into economics. These are identified in
terms of the issues surrounding the use of formal or non-formal analytical methods,
individualist or holistic approaches, the respective roles of rational choice and
rule-following behavior, the relative importance of the spontaneous evolution and
deliberative design of institutions, and questions concerning the normative appraisal of
institutions. The old and the new institutionalism have often been paired on opposite
sides of these issues, and the issues themselves presented in a series of sharp
dichotomies. Professor Rutherford argues, however, that matters are both more complex and
more challenging. Although each tradition embodies fascinating insights into the study of
economic institutions - their functioning, evolution, and impact on human welfare -
neither has as yet provided fully satisfactory answers to the problems identified.
Reviews
'This is clearly a book
which anyone seriously interested in economic institutions should read. It is well
organized, clearly written, and short. For these reasons, it would be suitable for courses
with an institutional, organizational, or methodological focus in any of the social
sciences. Readers interested in the new institutional economics, even if they have no
acquaintance with 'old' institutionalism, are particularly likely to benefit from
Rutherford's systematic and well-informed exposition.' Canadian Journal of Economics
Contents
1. Definitions and issues; 2. Formalism and anti-formalism; 3. Individualism and
holism; 4. Rationality and rule following; 5. Evolution and design; 6. Efficiency and
reform; 7. Conflicts and complementarities.
224 pages, Paperback