Institutionalism and neoclassical economics

The concept of an institution. The role of institutions in the functioning of the economy

Let's start the study of institutions with the etymology of the word institution.

to institute (eng) - to establish, establish.

The concept of institution was borrowed by economists from the social sciences, in particular from sociology.

Institute called a set of roles and statuses, designed to meet a specific need.

Definitions of institutions can also be found in works of political philosophy and social psychology. For example, the category of institution is one of the central ones in the work of John Rawls "The Theory of Justice".

Under institutions I will understand the public system of rules that define office and position, with associated rights and duties, authority and immunity, and the like. These rules specify certain forms of action as permitted and others as forbidden, and they also punish some acts and protect others when violence occurs. As examples, or more general social practices, we can cite games, rituals, courts and parliaments, markets and property systems.

In economic theory, the concept of institution was first included in the analysis by Thorstein Veblen.

Institutes- this is, in fact, a common way of thinking with regard to individual relations between society and the individual and the individual functions performed by them; and the system of life of a society, which is composed of the totality of those active at a certain time or at any moment in the development of any society, can be psychologically characterized in general terms as the prevailing spiritual position or widespread idea of ​​\u200b\u200bthe way of life in society.

Veblen also understood institutions as:

• habitual ways of responding to stimuli;
• the structure of the production or economic mechanism;
• currently accepted system of social life.

Another founder of institutionalism, John Commons, defines an institution as follows:

Institute- collective action to control, liberate and expand individual action.

Another classic of institutionalism, Wesley Mitchell, has the following definition:

Institutions are the dominant, and highly standardized, social habits.

Currently, within the framework of modern institutionalism, the most common interpretation of the institutions of Douglas North is:

Institutions are the rules, the mechanisms that enforce them, and the norms of behavior that structure the repetitive interactions between people.

The economic actions of an individual do not take place in an isolated space, but in a certain society. And therefore it is of great importance how society will react to them. Thus, transactions that are acceptable and profitable in one place may not necessarily be viable even under similar conditions in another. An example of this is the restrictions imposed on the economic behavior of a person by various religious cults.

In order to avoid coordinating many external factors that affect success and the very possibility of making one or another decision, schemes or algorithms of behavior are developed within the framework of the economic and social orders that are most effective under given conditions. These schemes and algorithms or matrices of individual behavior are nothing but institutions.

There are several reasons why neoclassical theory (of the early 1960s) ceased to meet the requirements placed on it by economists who tried to comprehend real events in modern economic practice:

1. Neoclassical theory is based on unrealistic assumptions and limitations, and therefore it uses models that are inadequate to economic practice. Coase called this neoclassical state of affairs "chalkboard economics."
2. Economic science expands the range of phenomena (for example, such as ideology, law, norms of behavior, family) that can be successfully analyzed from the point of view of economic science. This process was called "economic imperialism". The leading representative of this trend is the Nobel laureate Harry Becker. But for the first time, Ludwig von Mises wrote about the need to create a general science that studies human action, who proposed the term “praxeology” for this.
3. Within the framework of neoclassicism, there are practically no theories that satisfactorily explain the dynamic changes in the economy, the importance of studying which became relevant against the backdrop of the historical events of the 20th century. (In general, within the framework of economic science until the 80s of the 20th century, this problem was considered almost exclusively within the framework of Marxist political economy).

Now let's dwell on the main premises of the neoclassical theory, which make up its paradigm (hard core), as well as the "protective belt", following the methodology of science put forward by Imre Lakatos:

hard core :

1. stable preferences that are endogenous;
2. rational choice (maximizing behavior);
3. equilibrium in the market and general equilibrium in all markets.

Protective belt:

1. Ownership rights remain unchanged and clearly defined;
2. The information is completely accessible and complete;
3. Individuals satisfy their needs through exchange, which occurs without cost, given the original distribution.

The research program on Lakatos, while leaving the rigid core intact, should be aimed at clarifying, developing existing ones or putting forward new auxiliary hypotheses that form a protective belt around this core.

If the hard core is modified, then the theory is replaced by a new theory with its own research program.

Let us consider how the premises of neo-institutionalism and classical old institutionalism affect the neoclassical research agenda.

The "old" institutionalism, as an economic trend, arose at the turn of the 19th and 20th centuries. He was closely associated with the historical trend in economic theory, with the so-called historical and new historical school (F. List, G. Schmoler, L. Bretano, K. Bucher). From the very beginning of its development, institutionalism was characterized by the advocacy of the idea of ​​social control and the intervention of society, mainly the state, in economic processes. This was the legacy of the historical school, whose representatives not only denied the existence of stable deterministic relationships and laws in the economy, but also supported the idea that the well-being of society can be achieved on the basis of strict state regulation of the nationalist economy.

The most prominent representatives of the "Old Institutionalism" are: Thorstein Veblen, John Commons, Wesley Mitchell, John Galbraith. Despite the significant range of problems covered in the works of these economists, they failed to form their own unified research program. As Coase noted, the work of the American institutionalists led nowhere because they lacked a theory to organize the mass of descriptive material.

The old institutionalism criticized the provisions that constitute the "hard core of neoclassicism." In particular, Veblen rejected the concept of rationality and the principle of maximization corresponding to it as fundamental in explaining the behavior of economic agents. The object of analysis is institutions, and not human interactions in space with restrictions that are set by institutions.

Also, the works of the old institutionalists are distinguished by significant interdisciplinarity, being, in fact, continuations of sociological, legal, and statistical studies in their application to economic problems.

The forerunners of neo-institutionalism are economists of the Austrian school, in particular Karl Menger and Friedrich von Hayek, who introduced the evolutionary method into economics and also raised the question of the synthesis of many sciences studying society.

Modern neo-institutionalism originates from the pioneering works of Ronald Coase, The Nature of the Firm, The Problem of Social Costs.

Neo-institutionalists attacked, first of all, the provisions of neoclassicism, which constitute its defensive core.

1. First, the premise that exchange is costless has been criticized. Criticism of this position can be found in the first works of Coase. Although, it should be noted that Menger wrote about the possibility of the existence of exchange costs and their influence on the decisions of exchanging subjects in his Foundations of Political Economy.
   Economic exchange occurs only when each of its participants, by carrying out the act of exchange, receives some increment of value to the value of the existing set of goods. This is proved by Karl Menger in his Foundations of Political Economy, based on the assumption that there are two participants in the exchange. The first has a good A, which has a value W, and the second has a good B with the same value W. As a result of the exchange that took place between them, the value of goods at the disposal of the first will be W + x, and the second - W + y. From this we can conclude that in the process of exchange the value of the good for each participant increased by a certain amount. This example shows that the activity associated with the exchange is not a waste of time and resources, but the same productive activity as the production of material goods.
   When investigating exchange, one cannot but stop at the limits of exchange. The exchange will take place as long as the value of the goods at the disposal of each participant in the exchange will, according to his estimates, be less than the value of those goods that can be obtained as a result of the exchange. This thesis is true for all counterparties of the exchange. Using the symbolism of the above example, the exchange occurs if W (A)< W + х для первого и W (B) < W + у для второго участников обмена, или если х > 0 and y > 0.
   So far, we have considered exchange as a costless process. But in a real economy, any act of exchange is associated with certain costs. Such exchange costs are called transactional. They are usually interpreted as "the costs of collecting and processing information, the costs of negotiation and decision-making, the costs of monitoring and legal protection of the performance of the contract" .
   The concept of transaction costs contradicts the thesis of the neoclassical theory that the costs of the functioning of the market mechanism are equal to zero. This assumption made it possible not to take into account the influence of various institutions in the economic analysis. Therefore, if transaction costs are positive, it is necessary to take into account the influence of economic and social institutions on the functioning of the economic system.
2. Secondly, recognizing the existence of transaction costs, there is a need to revise the thesis about the availability of information. Recognition of the thesis about the incompleteness and imperfection of information opens up new perspectives for economic analysis, for example, in the study of contracts.
3. Thirdly, the thesis about the neutrality of distribution and the specification of property rights has been revised. Research in this direction served as a starting point for the development of such areas of institutionalism as the theory of property rights and the economics of organizations. Within the framework of these areas, the subjects of economic activity "economic organizations have ceased to be considered as" black boxes ".

Within the framework of "modern" institutionalism, attempts are also being made to modify or even change the elements of the hard core of neoclassicism. First of all, this is the neoclassical premise of rational choice. In institutional economics, classical rationality is modified with assumptions about bounded rationality and opportunistic behavior.

Despite the differences, almost all representatives of neo-institutionalism consider institutions through their influence on decisions made by economic agents. This uses the following fundamental tools related to the human model: methodological individualism, utility maximization, bounded rationality and opportunistic behavior.

Some representatives of modern institutionalism go even further and question the very premise of the utility-maximizing behavior of economic man, suggesting its replacement by the principle of satisfaction. In accordance with the classification of Tran Eggertsson, representatives of this trend form their own trend in institutionalism - the New Institutional Economics, whose representatives can be considered O. Williamson and G. Simon. Thus, the differences between neo-institutionalism and the new institutional economics can be drawn depending on what prerequisites are being replaced or modified within their framework - a “hard core” or a “protective belt”.

The main representatives of neo-institutionalism are: R. Coase, O. Williamson, D. North, A. Alchian, Simon G., L. Thevenot, K. Menard, J. Buchanan, M. Olson, R. Posner, G. Demsetz, S. Pejovich, T. Eggertsson and others.

Neoclassical economic theory emerged in the 1870s. Representatives: Karl Menger, Friedrich von Wieser, Eigen von Böhm-Bawerk (Austrian school), W. S. Jevons and L. Walras (mathematical school), J. B. Clark (American school), Irving Fisher, A. Marshall and A. Pigou (Cambridge School).

Neoclassical Theory: Principles

1. absolute rationality of behavior
2. individualization;
3. conservative behavior;
4. freedom of information;
5. price and quantity - 2 ways to measure goods;
6. the proposals of the subjects of the economy are always stable.

Focusing on the result, neoclassical studies how rational individuals (households) maximize utility, firms maximize profits, and the state maximizes the welfare of the people, neoclassics studied mainly equilibrium economic models of the interaction of economic agents,

Fixing an external norm in social practice is institutionalization.

In contrast to the neoclassical theory, which showed its failure in the emergency circumstances of 1929-1933, alternative economic theories began to develop, the characteristic features of which are macroeconomic analysis, the justification for the activation of state influence on the economy. Institutional economics is associated primarily with the works of T. Veblen (1857 - 1929): "Theory of the Leisure Class". The emergence of institutionalism is associated with increased concentration of production, the assertion of the dominance of monopolies in the main sectors of the economy, and the centralization of banking capital.

Institutional Theory:

1. there is no absolute rationality (man is not a computer), people tend to act in a controlled manner, obeying a strategy.
2. there is no individualism (people were not always guided by their own interests, because there are parental instincts, instincts of imitation).

This theory is presented in two directions:

1. old
2. new.

Institutionalism is characterized by heterogeneity, the absence of a holistic, unified theoretical concept, which has led to many trends and schools within this direction. Institutionalism is characterized by heterogeneity, the absence of a holistic, unified theoretical concept, which has led to many trends and schools within this direction.

• the objects of research are "institutions", which mean both corporations, trade unions, the state, and various kinds of legal, moral, ethical and psychological phenomena (e.g. legislation, customs, family, norms of behavior ...)
• emphasis on the psychology of the team as the basis for the development of the economy
• critical attitude to the possibilities of a market economy that generates monopolies, overproduction crises and other negative phenomena
• technocracy (the power of technology) is inherent.

Predecessors of the institutionalists (critics of neoclassicism).

German Historical School

1. Friedrich List(1789-1846) as a critic of A. Smith.

Main work: "The National System of Political Economy" (1841).

The country's economy should develop taking into account national characteristics, such as historical features of development, culture, mentality, geographical characteristics, etc.

Protest against the formalism and abstractions of classical political economy.

Increased awareness of the role of the human factor in the development of the economy.

Table 1.1 Comparative characteristics of the views of F. List with the classical school. Comparison criterion A. Smith F. List Place of creation England Germany views Cosmopolitan Nationalist Central category material wealth Productive forces - both technical and social (moral, political, etc.) supreme value exchange value The ability to create wealth Source of wealth (development) Division of labor Priority of the internal market over the external one, emphasis on individuality productive activity Physical work Physical and mental labor Economic development The quantitative process of increasing the volume of material wealth Qualitative interpretation of eq. development, including in this concept the development of statehood, morality, culture, art, creative abilities of people, etc. Policy Free trading (freedom) Protectionism

2. Gustav Schmoller (1838 - 1917).

Main work: "The New Concept of the National Economy" (1874).

Brief description and analysis of scientific views.

He described the actual economic behavior, criticizing the formal norms of the classical school.

He emphasized the role of non-economic development factors and, above all, moral norms, ethics and culture in economic activity.

3. Werner Sombart (1863-1946).

Major works: "Modern Capitalism" (1902), "Jews and Economic Life" (1911), "Bourgeois" (1913), "German Socialism" (1934).

.

He analyzed the role of institutions in the formation of the economic system.

The development of capitalism is a peculiar manifestation of the life of the spirit.

Entrepreneurs are a class that was formed by former robbers, feudal lords, speculators, merchants, and statesmen.

Introduces the concept of "conjuncture", highlighting two phases of the economic cycle

- rise and fall.

4. Max Weber (1864-1920).

Major works: The Protestant Ethic and the Spirit of Capitalism (1905), Three Pure Types of Legitimate Government.

Brief description and analysis of scientific views.

He singled out three "ideal" types of state government:

◦ rational-legal - based on legally formalized rational law;

◦ traditional - based on historically established norms;

◦ charismatic - on devotion to the personality of the leader, faith in his unique abilities.

He linked the success of the development of the economy of European civilization with the Protestant mentality.

Table 1.3

Comparative characteristics of traditional and religious people.

Marxism

Karl Marx(1818-1883) as an institutional economist.

He expanded the classical theory by considering a number of social aspects and, on the basis of such a synthesis, proposed his own theory of economic development, those. he endowed his theory with features that are now characterized as institutional.

Table 1.4

The similarity of Marxism with institutionalism through the criteria of difference with

classical school.

Criterion	classical school	Marxism
Own	Private	Public
Division of labor	Source of wealth	Positive impact, but: - the worker is not aware of the role played by his labor (alienation of labor); - division of mental and physical labor; - strengthening of material and social inequality => the emergence of classes.
Classes	Society - a homogeneous set of economic entities	Society is a system of classes that have developed in it, contradicting each other, which serves as a source of social development in a given historical period of time.
Productive forces		Material and technical factors (production method)
Economic development	The quantitative process of increasing the volume of material wealth	The material foundations of production are the productive forces (basis), and production relations (superstructure) consist of those elements (state structure, form of ownership, structure of society, etc.), which are now called institutional.
Ethical Assessments	Does not contain ethical (value) assessments	Absoluteized the interests of the proletariat; concept of justice

Review questions

1) What are the common features of the historical school in Germany and American institutionalism?

2) What ideas of K. Marx can be classified as institutional?

2) Korneichuk, B. V. Institutional economics / B. V. Korneichuk. - M.: Gardariki, 2007. - 255 p.

3) Nureev, R.M. Essays on the history of institutionalism / R.M. Nureyev. - Rostov n / a: Publishing house "Assistance - XXI century"; Humanitarian Perspectives, 2010. - 415 p.

4) Rozmainsky, I. V. History of economic analysis in the West [Electronic resource] / I. V. Rozmainsky, K. A. Kholodilin. - Electron. text data. - St. Petersburg: B. ed., 2000. - Access mode: http://institutional. boom.ru/Latov_Razmainskiy/Razmainskiy_history.htm, free.

5) Frolov, D. Institutional evolution of post-Soviet institutionalism / D. Frolov // Questions of Economics. - 2008.- No. 4.- P.130-139.

1.3. General signs of institutionalism

Study Plan:

1) Basic provisions of institutional economic theory.

Institutionalism, as the subject of its analysis, puts forward both economic and non-economic problems of socio-economic development. The object of the study is formal and informal institutions that are not divided into primary and secondary.

Institute definition:

Institutes is a system of formal and informal rules that determine the relationship of people in society.

Institutes- "rules of the game" in society (D. North)

Institutes It is a habitual way of thinking, guided by which people live.

Institutes is the result of processes that have taken place in the past.

Formal "written" rules: Constitution, laws, decrees, agreements, etc.

Informal "unwritten" rules: customs, traditions, conventions, habits, etc.

Informal norms play no less a role in society than formal ones, as they have the following features: duration of evolution; many areas are regulated only by informal norms; basis for formal rules.

The problem of harmonizing old and new institutions:

Formal new and formal old;

Formal new and informal old;

Informal new and informal old.

2) Interdisciplinary nature of institutional economics. The economy develops under the influence of other disciplines. Institutional economics is a kind of synthesis of economic processes and phenomena of public life, described by the humanities.

Neoclassicism and institutionalism: commonality and differences of approaches.

Since institutional economics arose as an alternative to neoclassicism, we highlight the main fundamental differences between them.

Table 1.5

Comparative characteristics of neoclassicism and institutionalism.

Criterion	Neoclassic	institutionalism
Founding period	XVII - XIX - XX century	20-30s of the XX century
Place of development	Western Europe	USA
Epoch	Industrial	Post-industrial (informational)
Analysis Methodology	Methodological individualism - explaining institutions through the need of individuals for the existence of a framework, structuring their interactions in various fields. Individuals are primary, institutions are secondary	Holism - explaining the behavior and interests of individuals through the characteristics of institutions, that predetermine their interactions. Institutions are primary, individuals are secondary
The nature of reasoning	Deduction (from general to particular)	Induction (from particular to general)
Human Rationality	Complete	Limited
Information and knowledge	Complete, knowledge unlimited	Partial, specialized knowledge
Target	Maximization of utility, profit	Cultural education, harmonization
wishes	Self-defined	Defined by culture, community
Interaction	Commodity	interpersonal
Dependence on the impact of social factors	Complete independence	Not strictly independent
Member Behavior		Opportunistic Behavior*

* Opportunistic behavior- the pursuit of personal gain using deceit, calculated efforts to lead astray, deceit, concealment of information and other actions.

Review questions

1) Give a general definition of an institution.

2) Consider the origin and functioning of the following institutions: the handshake, private property, marriage, education, the market, the state.

3) Explain the essence of the interdisciplinary approach in institutional economics.

4) Describe the influence of institutions on your life.

5) What shortcomings of the neoclassical direction were reflected in institutional economics?

6) What are the fundamental differences between the neoclassical scenario of the transition from a command economy to a market economy and the neo-institutional one.

1) Moskovsky, A. Institutionalism: theory, decision-making basis, method of criticism / A. Moskovsky // Questions of Economics. - 2009. - No. 3. - S. 110-124.

2) Nureev, R.M. Preface to A. Oleinik's textbook. "Institutional Economics" / R. M. Nureev. - M.: INFRA-M, 2000. - 704 p.

3) Searle, J. What is an institute? [Electronic resource] / J. Searle // Questions of Economics. - 2007. - No. 8. - Access mode: http://www.vopreco.ru/rus/ archive.files/ n8_2007.html, free.

4) Skorobogatov, A. Institutions as a factor of order and as a source of chaos: neo-institutional and post-Keynesian analysis / A. Skorobogatov // Issues of Economics. - 2006. - No. 8. - P.102 - 118.

5) Frolov, D. Methodological institutionalism: a new look at the evolution of economic science / D. Frolov // Questions of Economics. - 2008. - No.

11. - S.90-101.

6) Hodgson, J. Institutions and individuals: interaction and evolution / J. Hodgson // Questions of Economics. - 2008. - No. 8. - S. 45-61.

TOPIC 2. TRADITIONAL "OLD" INSTITUTIONALISM (classical institutional theory)

2.1. The main features of the "old" institutionalism

Study Plan:

1) Characteristics of the "old" institutionalism.

"Old institutionalism" arose at the end of the 19th century and took shape as a trend in the 20-30s of the 20th century. The starting point for the emergence of the institutional direction is considered to be the date of publication of the monograph T. Veblen"The Theory of the Leisure Class" in 1899. However, given the later no less significant publications J. Commons, W. Mitchell, J. M. Clark, marked the emergence of a new trend with well-formed ideas and concepts. It was characterized by the formation of the main provisions of institutionalism and criticism of the concept of a rational economic man, on which classical analysis is based. The works of these American scientists are united by:

- antitrust orientation (“society's control over business” - J. Clark, 1926);

- the need for state regulation of the economy;

- taking into account the impact on economic growth of the totality of social relations;

- taking into account the influence of habits, instincts, customs and traditions;

- use of the methodology of other humanities (law, political science, sociology, etc.);

- inductive method of analysis, movement from law and politics to economics;

- denial of the principle of maximization (utility, profit);

- methodology of holism (institutions are primary, individuals are secondary).

- focus on collective action.

2) Identification of the negative and positive postulates of the "old" institutionalism.

Undoubtedly, the emergence at the beginning of the twentieth century of a new trend in economic thought - institutionalism significantly enriched economic theory. "Old" institutionalism emphasizes the importance of institutions for economic life and attempts to understand their role and evolution; proves the growing role of man as the main economic resource of the post-industrial society. Representatives of this direction consider the replacement of free competition by monopolization as an objective process of the modern economy, while it is important for large corporations to introduce regularity and consciousness into the spontaneous mechanism of market competition, since. it is large monopolies that are able to ensure the dynamism of the economy, since they bear the brunt of the cost of innovation and scientific and technical progress.

Despite the above advantages, institutional economics is far from flawless. The remark of S.V. Kluzina [I] : “... Institutionalism allows for the absolutization of the role of large corporations, as well as a weak formalization of the analysis". Therefore, in the development of modern economic theory, in general, we can agree with O. Inshakov and D. Frolov: “...Despite the scientific fashion, institutionalism alone can by no means become a methodological panacea for Russia or any other country. It should organically "join" the composition of evolutionary theory along with other approaches that systematically describe transformational and transactional factors.»; “... it becomes obvious that there is an urgent need for interdisciplinary integration within the framework of the humanities with the inclusion of institutional theory, the productive implementation of which should become a vector for the evolution of domestic institutionalism...».

Review questions

1) What principles of "old" institutionalism reflect your behavior? What is their influence on your decision making?

2) Consider the effect of institutions on your life and work in the modern economy.

1) Institutional Economics: Textbook / Ed. A.N. Oleinik. - M.: INFRA - M, 2005. - 704 p.

M, 2007. - 416 p.

3) Skorobogatov, A.S. Institutional Economics [Electronic resource] / A.S. Skorobogatov. - Electron. text data. - St. Petersburg: GU-HSE, 2006. - Access mode: http://ie.boom.ru/skorobogatov/skorobogatov.htm, free.

2.2. Representatives of traditional institutionalism, their theories.

Table 2.1

The first stage - 20-30s of the XX century. Representatives of this stage introduced the concept of "institutions" into economic science. Human behavior, they believed, is influenced by such institutional formations as the state, corporations, trade unions, law, ethics, the institution of the family, etc.

The basis of the development of society T. Veblen considered the psychology of the team. The behavior of an economic entity is determined not by optimizing calculations, but by instincts that determine the goals of activity, and institutions that determine the means of achieving these goals. Habits are one of the institutions that set the framework for the behavior of individuals in the market, in the political sphere, in the family. He introduced the notion of prestige consumption, known as the Veblen effect. This conspicuous consumption is a confirmation of success and forces the middle class to imitate the behavior of the rich.

W. Mitchell believed that the market economy was unstable. At the same time, business cycles are a manifestation of such instability, and their presence gives rise to the need for state intervention in the economy.

He studied the gap between the dynamics of industrial production and the dynamics of prices. W. Mitchell denied looking at a person as a "rational optimizer".

Analyzed the irrationality of spending money in family budgets. In 1923, he proposed a system of state unemployment insurance.

J. Commons paid great attention to the study of the role of corporations and trade unions and their influence on people's behavior.

"The good reputation of a business or profession is the most perfect form of competition known to the law."

Commons defined value as the result of the legal agreement of "collective institutions". He was engaged in the search for instruments of compromise between organized labor and big capital. John Commons laid the foundations for pensions, which were laid out in the Social Security Act of 1935.

J. M. Clark advocated the implementation of anti-crisis measures by the state, in particular, an increase in government spending aimed at creating "effective stable demand in order to increase the load on enterprises and employment." Clark puts forward a "revolution in the economic functions of the state" as the most important feature of the transformation of capitalism, as a result of which it began to play the role of an organizer of the economy in the interests of the general welfare. This, according to Clarke, is accompanied by "diffusion of benefits", which finds its manifestation in the fact that the results of technical and economic progress are evenly distributed among all classes of society.

The second stage - 50-70s of the XX century. Representative of this stage - John Kenneth Galbraith(1908-2006). Main work: "The New Industrial Society", 1967.

From the point of view of the most prominent representative of institutionalism, the American economist J.C. Galbraith, the place of the self-regulating market was taken by a new economic organization, represented by monopolized industries, supported by the state and controlled not by capital, but by the so-called technostructure(social stratum, including scientists, designers, managers, financiers) - knowledge organized in a certain way. Galbraith consistently tried to prove that the new economic system represented, in fact, a planned economy. That is why Galbraith's ideas were so popular in the Soviet Union. Galbraith's main point is in today's market, no one has all the information, everyone's knowledge is specialized and partial. Power has shifted from individuals to organizations with group identities.

Table 2.2

Comparative characteristics of the market system and the new industrial

J. Galbraith Society

Review questions

1) Why does T. Veblen criticize the “leisure class” and what role does he assign to him in society?

2) What role, according to T. Veblen, should be assigned to the state in the economic sphere?

3) What is common in the works of American institutionalists (T. Veblen, J. Commons, W. Mitchell, J. M. Clark.) and their modern followers?

1) Veblen, T. The Theory of the Leisure Class / T. Veblen. - M.: Progress, 1984. - S.202.

2) Commons, J. (translated by Kurysheva A.A.) Institutional Economics / J. Commons // Economic Bulletin of the Rostov State University. - 2007. - No. 4 (vol. 5). - S. 78-85.

3) Galbraith, J.K. The New Industrial Society / J.K. Galbraith. - M.: Progress, 1999. - 297 p.

4) Veblen, T. Limitedness of the theory of marginal utility / T. Veblen // Questions of Economics. - 2007. - No. 7. - S. 86-98.

5) Nureyev, R. Thorstein Veblen: a view from the 21st century / R. Nureyev // Questions of Economics. - 2007. - No. 7. - S. 73-85.

6) Samuels, W. Thorstein Veblen as a theoretical economist / W. Samuels // Questions of Economics. - 2007. - No. 7. - S. 99-117.

2.3. The human model in institutional economics.

Study Plan:

1) Models of human behavior and their role in economic development.

Table 2.3 Comparative characteristics of theoretical ideas about the individual 1 . Comparison criterion economic man hybrid man institutional man 1. Approach in economic theory Neoclassic O. Williamson institutionalism 2. Purpose Utility maximization Minimization of transaction costs cultural education 3.Knowledge and computing ability Unlimited Limited Limited 4. Desires Self-defined Defined by culture 5. Rationality Complete Limited cultural 6. Opportunism No deceit (deceit) and no coercion There is deceit (deceit), but no coercion There is deceit (deceit) and there is coercion

2) Institutional man today.

For institutionalists, the factors that determine human behavior in economic life originate in the distant past, not only of the individual himself, but of all mankind. Institutionalists view man as a biosocial being, under the cross influence of all biological nature and social institutions. In society, the attitude of scientists-economists to socio-economic assessments related to the satisfaction of people's needs has changed significantly. Today, it is becoming more and more obvious that it is illegal and socially dangerous to underestimate the importance of a thorough study of the relationship between economic growth and the satisfaction of the population's vital needs. The gradual development of market relations,

the democratization of society, new socio-economic conditions for the life of society, the emergence of opportunities for rethinking and scientific substantiation of many specific theoretical problems of the development of society and the assessment of real living standards achieved in countries with a developed market economy, required increased attention of scientists to a comprehensive and more detailed study, primarily of such interrelated categories and concepts such as livelihoods, quality of life, standard of living, cost of living, standard of living, lifestyle, lifestyle, way of life, living conditions, life expectancy. Radical transformations in Russia have fundamentally changed the forms of human attitude to the outside world, and, consequently, the forms of people's life.

Review questions

1) What is the essence of a rational person? What are its main shortcomings in modern economic theory?

2) Consider O. Williamson's analysis of the individual.

3) What is the role of introducing the concept of “institutional man” into economic analysis?

4) Describe the "institutional man" model.

1) Avtonomov, V.S. Human model in economic science [Electronic resource] / V.S. Autonomous. - Electron. text data. - St. Petersburg: School of Economics, 1998. - Access mode: http://ek-lit.narod.ru/avtosod.htm, free.

2) Malkina, M.Yu. Economic theory. Part I. Microeconomics / M. Yu. Malkina. - Nizhny Novgorod: Publishing house of UNN, 2009. - 436 p.

3) Storchevoy, M. A new model of man for economic science / M. Storchevoy // Questions of Economics. - 2011. - No. 4. - S. 78-98.

TOPIC 3. NEO-INSTITUTIONALISM

3.1. The structure of scientific theory. General characteristics and directions of neo-institutionalism.

The third stage - from the 70s of the twentieth century. Further institutionalism develops in two directions: neo-institutionalism And new institutional economics. Despite the apparent identity in the names, we are talking about fundamentally different approaches to the analysis of institutions. For the subsequent detailed analysis, we need to know structure of scientific theory. Any theory has two components: hard core and cabbage soup tnu shell. The statements that make up the rigid core of the theory must remain unchanged in the course of any modifications and refinements that accompany the development of the theory. They form those principles from which any researcher who consistently applies the theory is not entitled to refuse, no matter how sharp the criticism of opponents is. Containment theories, on the other hand, are subject to constant adjustments as the theory develops.

1) General characteristics of neo-institutionalism, its structure.

The main representatives of neo-institutional economics: R. Coase, R. Posner, J. Stiglitz, O. Williamson, D. North, J. Buchanan, G. Tulloch.

This trend was initiated in 1937 by Ronald Coase's The Nature of the Firm, but until the 1970s, neo-institutionalism remained on the fringes of economics. Initially, it developed only in the USA, but in the 1980s, Western European economists joined this process, and in the 1990s, Eastern European economists as well.

Neo-institutionalism leaves the rigid core of neoclassicism unchanged, only the protective shell is corrected. Without abandoning the traditional microeconomic tools, neo-institutionalists seek to explain factors that were external to neoclassicism - ideology, norms of behavior, laws of the family, etc.

Protective Shell Changes:

1. Considered more a wide range of forms of ownership: along with private property, collective and state property are analyzed, their comparative effectiveness in securing transactions on the market is compared.

2. The concept is introduced information costs- costs associated with searching for and obtaining information about the transaction and the situation on the market.

3. Along with production costs, allow the existence transaction costs arising from transactions.

The founder of neo-institutionalism R. Coase in a lecture dedicated to the awarding of the Nobel Prize in Economics to him, he casts a reproach to traditional theory for being isolated from life. " What is being studied, he notes, is a system that lives in the minds of economists, not in reality. I called this result chalkboard economics.". Coase sees his merit in "proving the importance for the operation of the economic system of what may be called the institutional structure of production." The study of the institutional structure of production became possible due to the development of such concepts as transaction costs, property rights, contractual relations by economic science.

Recognition of the merits of neo-institutionalists was expressed in the award of the Nobel Prize in Economics James Buchanan (1986), Ronald Coase (1991), Douglas North (1993), Joseph Stiglitz (2001), Oliver Williamson (2009).

The development of neo-institutionalism in Russia.

In Russia, representatives of neo-institutionalism: R. Kapelyushnikov, R. Nureev, A. Oleinik, V. Polterovich, A. Shastitko, E. Brendeleva.

Review questions

1) What are the main provisions of neo-institutional theory? How do they differ from the basic foundations of neoclassical theory?

2) Describe the concept of "opportunism", and what impact does such behavior have on the uncertainty of the external environment?

3) What is the basic unit of analysis in neo-institutional theory?

4) List the main directions of neo-institutionalism.

1) Kusurgasheva, L. Critical analysis of the foundations of neo-institutionalism / L. Kusurgasheva // The Economist. - 2004. - No. 6. - P. 44-48.

2) Oleinik, A.N. Institutional economics / A. N. Oleinik. - M.: INFRA

M, 2011. - 416 p.

3.2. Property Rights Theory

Study Plan:

1) Basic provisions of the theory of property rights. Property category, a bundle of property rights. Honore's list.

The system of property rights in neo-institutional theory is understood as the whole set of norms regulating access to scarce resources. Such norms can be established and protected not only by the state, but also by other social mechanisms - customs, moral principles, religious precepts. According to existing definitions, property rights cover both physical objects and incorporeal objects (say, the results of intellectual activity).

From the point of view of society, property rights act as "rules of the game" that streamline relations between individual agents. From the point of view of individual agents, they appear as "bundles of powers" to make decisions about a particular resource. Each such “bundle” can be split, so that one part of the powers begins to belong to one person, the other to another, and so on.

In 1961, British lawyer Arthur Honoré proposed a bundle of indecomposable and non-overlapping property rights. Institutionalists view any exchange of goods as an exchange of property rights to them.

Property rights according to A. Honoré

Ownership	Explanation
1. Ownership	Right to exclusive physical control over goods
2. Right of use	The right to use the beneficial properties of a good for oneself
3. Right of management	The right to decide who and under what conditions will have access to the use of the good
4. Right to income	The right to enjoy the results of the use of the good
5. The right of the sovereign	The right to alienate, consume, change or destroy a good
6. Right to security	The right to be protected from expropriation of goods and from harm from the external environment
7. Right of succession	The right to transfer wealth by inheritance or testament
8. Right to perpetuity	The right to unlimited possession of the good
9.Prohibition of harmful use	Obligation to use the benefit in a way that does not harm the property and personal rights of others
10. Right to liability in the form of recovery	The possibility of recovering a good in payment of a debt
11. Right to residual character	The right to “natural return” of powers transferred to someone after the expiration of the transfer period, the right to use institutions and mechanisms for protecting violated rights

Property rights have a behavioral meaning: they encourage some ways of doing things, they suppress others (through prohibitions or higher costs) and thus influence the choice of individuals.

Back to main elements bunch of rights property usually includes 1:

1) the right to exclude other agents from access to the resource;

2) the right to use the resource;

3) the right to receive income from it;

4) the right to transfer all previous powers.

Institutional Economics arose and developed as an oppositional doctrine - opposition, first of all, to neoclassical "economics".

Representatives of institutionalism tried to put forward an alternative concept to the main teaching, they sought to reflect in not only formal models and strict logical schemes, but also living life in all its diversity. In order to understand the causes and patterns of development of institutionalism, as well as the main directions of its criticism of the mainstream of economic thought, we briefly characterize the methodological basis -.

Old institutionalism

Formed on American soil, institutionalism absorbed many of the ideas of the German historical school, the English Fabians, and the French sociological tradition. The influence of Marxism on institutionalism cannot be denied either. The old institutionalism arose at the end of the 19th century. and took shape as a trend in 1920-1930. He tried to occupy the "middle line" between neoclassical "economics" and Marxism.

In 1898 Thorstein Veblen (1857-1929) criticized G. Schmoller, the leading representative of the German historical school, for excessive empiricism. Trying to answer the question "Why economics is not an evolutionary science", instead of a narrowly economic one, he proposes an interdisciplinary approach that would include social philosophy, anthropology and psychology. This was an attempt to turn economic theory towards social problems.

In 1918, the concept of "institutionalism" appeared. He is introduced by Wilton Hamilton. He defines an institution as "a common way of thinking or acting, imprinted in the habits of groups and the customs of a people." From his point of view, institutions fix established procedures, reflect the general agreement, the agreement that has developed in society. He understood institutions as customs, corporations, trade unions, the state, etc. This approach to understanding institutions is typical of traditional ("old") institutionalists, which include such well-known economists as Thorstein Veblen, Wesley Clare Mitchell, John Richard Commons, Karl -August Wittfogel, Gunnar Myrdal, John Kenneth Galbraith, Robert Heilbroner. Let's get acquainted with the concepts of some of them a little closer.

In The Theory of Business Enterprise (1904), T. Veblen analyzes the dichotomy of industry and business, rationality and irrationality. He contrasts behavior conditioned by real knowledge with behavior conditioned by habits of thought, considering the former as the source of change in progress, and the latter as a factor that counteracts it.

In the works written during the First World War and after it - The Instinct of Craftsmanship and the State of Industrial Skills (1914), The Place of Science in Modern Civilization (1919), Engineers and the Price System (1921) - Veblen considered important problems of scientific and technological progress, focusing on the role of "technocrats" (engineers, scientists, managers) in creating a rational industrial system. It was with them that he linked the future of capitalism.

Wesley Claire Mitchell (1874-1948) studied in Chicago, trained in Vienna and worked at Columbia University (1913 - 1948) Since 1920, he headed the National Bureau of Economic Research. His focus was on business cycles and economic research. W.K. Mitchell turned out to be the first institutionalist to analyze real processes "with numbers in hand." In his work "Business Cycles" (1927), he explores the gap between the dynamics of industrial production and the dynamics of prices.

In Art Backwardness Spending Money (1937), Mitchell criticized neoclassical "economics" based on the behavior of the rational individual. He sharply opposed the "blissful calculator" I. Bentham, showing various forms of human irrationality. He sought to statistically prove the difference between real behavior in the economy and the hedonic normotype. For Mitchell, the real economic agent is the average person. Analyzing the irrationality of spending money in family budgets, he clearly showed that in America the art of "making money" was far ahead of the ability to spend it rationally.

A great contribution to the development of the old institutionalism was made by John Richard Commons (1862-1945). His focus in The Distribution of Wealth (1893) was the search for instruments of compromise between organized labor and big capital. These include the eight-hour work day and higher wages, which increase the purchasing power of the population. He also noted the beneficial effect of the concentration of industry to improve the efficiency of the economy.

In the books "Industrial Goodwill" (1919), "Industrial Management" (1923), "Legal Foundations of Capitalism" (1924), the idea of ​​a social agreement between workers and entrepreneurs through mutual concessions is consistently promoted, it is shown how the diffusion of capitalist property contributes to a more even distribution of wealth.

In 1934, his book "Institutional Economic Theory" was published, in which the concept of a transaction (deal) was introduced. In its structure, Commons distinguishes three main elements - negotiations, acceptance of obligations and its implementation - and also characterizes various types of transactions (trade, management and rationing). From his point of view, the transactional process is the process of determining "reasonable value", which ends with a contract that implements "guarantees of expectations". In recent years, J. Commons has focused on the legal framework for collective action, and above all on the courts. This was reflected in the work published after his death - "The Economics of Collective Action" (1951).

Attention to civilization as a complex social system played a methodological role in post-war institutional concepts. In particular, this was reflected in the works of the American institutionalist historian, professor at Columbia and Washington Universities. Karl-August Wittfogel (1896-1988)- first of all, in his monograph "Oriental Despotism. A Comparative Study of Total Power". The structure-forming element in the concept of K.A. Wittfogel is despotism, which is characterized by the leading role of the state. The state relies on the bureaucratic apparatus and suppresses the development of private ownership tendencies. The wealth of the ruling class in this society is determined not by ownership of the means of production, but by a place in the hierarchical system of the state. Wittfogel believes that natural conditions and external influences determine the form of the state, and it, in turn, determines the type of social stratification.

A very important role in the development of the methodology of modern institutionalism was played by the works Carla Polanyi (1886-1964) and above all his "Great Transformation" (1944). In his work "The Economy as an Institutionalized Process", he singled out three types of exchange relations: reciprocity or mutual exchange on a natural basis, redistribution as a developed system of redistribution, and commodity exchange, which underlies the market economy.

Although each of the institutional theories is vulnerable to criticism, nevertheless, the very enumeration of the reasons for dissatisfaction with modernization shows how the views of scientists are changing. The focus is not on weak purchasing power and inefficient consumer demand, nor low levels of savings and investment, but on the importance of the value system, problems of exclusion, traditions and culture. Even if resources and technology are considered, it is in connection with the social role of knowledge and the problems of environmental protection.

The focus of the modern American institutionalist John Kenneth Galbraith (b. 1908) there are questions of technostructure. Already in "American Capitalism. The Theory of the Balancing Force" (1952), he writes about managers as the bearers of progress and considers trade unions as a balancing force along with big business and government.

However, the theme of scientific and technological progress and post-industrial society is most developed in the works "The New Industrial Society" (1967) and "Economic Theory and the Goals of Society" (1973). In modern society, - writes Galbraith, - there are two systems: planning and market. In the first, the leading role is played by the technostructure, which is based on the monopolization of knowledge. It is she who makes the main decisions in addition to the owners of capital. Such technostructures exist under both capitalism and socialism. It is their growth that brings the development of these systems together, predetermining the trends of convergence.

The Development of the Classical Tradition: Neoclassicism and Neoinstitutionalism

The concept of rationality and its development in the course of the formation of neo-institutionalism

Public choice and its main stages

constitutional choice. Back in the 1954 article “Individual Voting Choice and the Market,” James Buchanan identified two levels of public choice: 1) initial, constitutional choice (which takes place even before a constitution is adopted) and 2) post-constitutional. At the initial stage, the rights of individuals are determined, the rules for the relationship between them are established. At the post-constitutional stage, a strategy for the behavior of individuals is formed within the framework of established rules.

J. Buchanan draws a clear analogy with the game: first, the rules of the game are determined, and then, within the framework of these rules, the game itself is carried out. The constitution, from the point of view of James Buchanan, is such a set of rules for conducting a political game. The current policy is the result of playing within the constitutional rules. Therefore, the effectiveness and efficiency of policy depends to a large extent on how deep and comprehensive the original constitution was drafted; after all, according to Buchanan, the constitution is, first of all, the fundamental law not of the state, but of civil society.

However, the problem of “bad infinity” arises here: in order to adopt a constitution, it is necessary to develop pre-constitutional rules according to which it is adopted, and so on. To get out of this "hopeless methodological dilemma", Buchanan and Tulloch propose a seemingly self-evident rule of unanimity in a democratic society for the adoption of an initial constitution. Of course, this does not solve the problem, since the substantive question is replaced by a procedural one. However, there is such an example in history - the United States in 1787 showed a classic (and in many ways unique) example of a conscious choice of the rules of the political game. In the absence of universal suffrage, the US Constitution was adopted at a constitutional convention.

post-constitutional choice. The post-constitutional choice means the choice, first of all, of the "rules of the game" - legal doctrines and "working rules" (working rules), on the basis of which specific directions of economic policy aimed at production and distribution are determined.

Solving the problem of market failures, the state apparatus at the same time sought to solve two interrelated tasks: to ensure the normal operation of the market and to solve (or at least mitigate) acute socio-economic problems. Antimonopoly policy, social insurance, limitation of production with negative and expansion of production with positive external effects, production of public goods are aimed at this.

Comparative characteristics of "old" and "new" institutionalism

Although institutionalism as a special trend was formed at the beginning of the 20th century, for a long time it was on the periphery of economic thought. The explanation of the movement of economic goods only by institutional factors did not find a large number of supporters. This was partly due to the uncertainty of the very concept of "institution", by which some researchers understood mainly customs, others - trade unions, still others - the state, fourth corporations - etc., etc. Partly - with the fact that institutionalists tried to use the methods of other social sciences in economics: law, sociology, political science, etc. As a result, they lost the opportunity to speak the common language of economic science, which was considered the language of graphs and formulas. There were, of course, other objective reasons why this movement was not in demand by contemporaries.

The situation, however, changed radically in the 1960s and 1970s. To understand why, it suffices to make at least a cursory comparison of "old" and "new" institutionalism. Between the "old" institutionalists (like T. Veblen, J. Commons, J. K. Galbraith) and neo-institutionalists (like R. Coase, D. North or J. Buchanan) there are at least three fundamental differences.

Firstly, the "old" institutionalists (for example, J. Commons in "The Legal Foundations of Capitalism") went to the economy from law and politics, trying to study the problems of modern economic theory using the methods of other social sciences; neo-institutionalists go the exact opposite way - they study political science and legal problems using the methods of neoclassical economic theory, and above all, using the apparatus of modern microeconomics and game theory.

Secondly, traditional institutionalism was based mainly on the inductive method, strove to go from particular cases to generalizations, as a result of which a general institutional theory did not take shape; neo-institutionalism follows a deductive path - from the general principles of neoclassical economic theory to the explanation of specific phenomena of social life.

Fundamental differences between "old" institutionalism and neo-institutionalism

signs	Old institutionalism	Non-institutionalism
Movement	From law and politics to the economy	From economics to politics and law
Methodology	Other humanities (law, political science, sociology, etc.)	Economic neoclassical (methods of microeconomics and game theory)
Method	Inductive	Deductive
Focus of attention	collective action	Independent individual
Analysis background		Methodological individualism

Thirdly, the "old" institutionalism, as a current of radical economic thought, paid primary attention to the actions of collectives (mainly trade unions and the government) to protect the interests of the individual; Neo-institutionalism, on the other hand, puts at the forefront an independent individual who, by his own will and in accordance with his interests, decides which collectives it is more profitable for him to be a member of (see Tables 1-2).

In recent decades, there has been a growing interest in institutional studies. This is partly due to an attempt to overcome the limitations of a number of prerequisites characteristic of economics (the axioms of complete rationality, absolute awareness, perfect competition, establishing equilibrium only through the price mechanism, etc.) and consider modern economic, social and political processes more comprehensively and comprehensively; partly - with an attempt to analyze the phenomena that arose in the era of scientific and technological revolution, the application of traditional research methods to which does not yet give the desired result. Therefore, we will first show how the development of the premises of neoclassical theory took place within it.

Neoclassicism and neoinstitutionalism: unity and differences

What all neo-institutionalists have in common is, first, that social institutions matter, and second, that they are amenable to analysis using standard microeconomic tools. In the 1960s-1970s. a phenomenon called G. Becker "economic imperialism" began. It was during this period that economic concepts: maximization, equilibrium, efficiency, etc., began to be actively used in such areas related to the economy as education, family relations, healthcare, crime, politics, etc. This led to the fact that the basic economic categories of neoclassicism received deeper interpretation and wider application.

Each theory consists of a core and a protective layer. Neo-institutionalism is no exception. Among the main prerequisites, he, like neoclassicism as a whole, primarily refers to:

• methodological individualism;
• concept of economic man;
• activity as an exchange.

However, unlike neoclassicism, these principles began to be carried out more consistently.

methodological individualism. In conditions of limited resources, each of us is faced with the choice of one of the available alternatives. Methods for analyzing the market behavior of an individual are universal. They can be successfully applied to any of the areas where a person must make a choice.

The basic premise of neo-institutional theory is that people act in any area in pursuit of their own interests, and that there is no insurmountable line between business and social or politics.

The concept of economic man. The second premise of neo-institutional choice theory is the concept of "economic man" (homo oeconomicus). According to this concept, a person in a market economy identifies his preferences with a product. He seeks to make decisions that maximize the value of his utility function. His behavior is rational.

The rationality of the individual has a universal meaning in this theory. This means that all people are guided in their activities primarily by the economic principle, i.e., they compare marginal benefits and marginal costs (and, above all, benefits and costs associated with decision-making):

where MB is the marginal benefit;

MC - marginal cost.

However, unlike neoclassical theory, which considers mainly physical (rare resources) and technological limitations (lack of knowledge, practical skills, etc.), neoinstitutional theory also considers transaction costs, i.e. costs associated with the exchange of property rights. This happened because any activity is seen as an exchange.

Activity as an exchange. Proponents of neo-institutional theory consider any area by analogy with the commodity market. The state, for example, with this approach, is an arena of people's competition for influence on decision-making, for access to the distribution of resources, for places in the hierarchical ladder. However, the state is a special kind of market. Its participants have unusual property rights: voters can choose representatives to the highest bodies of the state, deputies can pass laws, officials can monitor their implementation. Voters and politicians are treated as individuals exchanging votes and campaign promises.

It is important to emphasize that neo-institutionalists are more realistic about the features of this exchange, given that people are inherently bounded rationality, and decision-making is associated with risk and uncertainty. In addition, it is not always necessary to make the best decisions. Therefore, institutionalists compare decision-making costs not with the situation considered exemplary in microeconomics (perfect competition), but with those real alternatives that exist in practice.

Such an approach can be supplemented by an analysis of collective action, which involves considering phenomena and processes from the point of view of the interaction not of one individual, but of a whole group of persons. People can be united into groups on social or property grounds, religious or party affiliation.

At the same time, institutionalists can even somewhat deviate from the principle of methodological individualism, assuming that the group can be considered as the final indivisible object of analysis, with its own utility function, limitations, etc. However, it seems more rational to consider a group as an association of several individuals with their own utility functions and interests.

The differences listed above are characterized by some institutionalists (R. Coase, O. Williamson, and others) as a genuine revolution in economic theory. Without diminishing their contribution to the development of economic theory, other economists (R. Posner and others) consider their work to be rather a further development of the mainstream of economic thought. Indeed, it is now more and more difficult to imagine the main stream without the work of neo-institutionalists. They are more and more fully included in modern textbooks on Economics. However, not all directions are equally capable of entering the neoclassical "economics". To see this, let's take a closer look at the structure of modern institutional theory.

The main directions of neo-institutional theory

Structure of institutional theory

A unified classification of institutional theories has not yet developed. First of all, the dualism of the "old" institutionalism and neo-institutional theories is still preserved. Both directions of modern institutionalism were formed either on the basis of neoclassical theory, or under its significant influence (Fig. 1-2). Thus, neo-institutionalism developed, expanding and supplementing the main direction of "economics". Invading the sphere of other social sciences (law, sociology, psychology, politics, etc.), this school used traditional microeconomic methods of analysis, trying to explore all social relations from the position of a rationally thinking "economic man" (homo oeconomicus). Therefore, any relationship between people is viewed through the prism of mutually beneficial exchange. Since the time of J. Commons, this approach has been called the contract (contractual) paradigm.

If, within the framework of the first direction (neo-institutional economics), the institutional approach only expanded and modified the traditional neoclassic, remaining within its limits and removing only some of the most unrealistic prerequisites (the axioms of complete rationality, absolute awareness, perfect competition, establishing equilibrium only through the price mechanism, etc.) , then the second direction (institutional economics) relied to a much greater extent on the "old" institutionalism (often of a very "left" persuasion).

If the first direction ultimately strengthens and expands the neoclassical paradigm, subordinating to it more and more new areas of research (family relations, ethics, political life, interracial relations, crime, the historical development of society, etc.), then the second direction comes to a complete rejection of neoclassicism. , giving rise to an institutional economy that is in opposition to the neoclassical "mainstream". This modern institutional economics rejects the methods of marginal and equilibrium analysis, adopting evolutionary sociological methods. (We are talking about such areas as the concepts of convergence, post-industrial, post-economic society, the economy of global problems). Therefore, representatives of these schools choose areas of analysis that go beyond the market economy (problems of creative labor, overcoming private property, eliminating exploitation, etc.). Relatively apart within the framework of this direction is only the French economy of agreements, which is trying to lay a new foundation for the neo-institutional economy and, above all, for its contractual paradigm. This basis, from the point of view of representatives of the economy of agreements, are norms.

Rice. 1-2. Classification of institutional concepts

The contract paradigm of the first direction arose thanks to the research of J. Commons. However, in its modern form, it received a slightly different interpretation, different from the original interpretation. The contract paradigm can be implemented both from the outside, i.e. through the institutional environment (the choice of social, legal and political "rules of the game"), and from within, that is, through the relationships underlying organizations. In the first case, constitutional law, property law, administrative law, various legislative acts, etc. can act as the rules of the game, in the second case, the internal regulations of the organizations themselves. Within this direction, the theory of property rights (R. Coase, A. Alchian, G. Demsets, R. Posner, etc.) studies the institutional environment of economic organizations in the private sector of the economy, and the theory of public choice (J. Buchanan, G. Tulloch , M. Olson, R. Tollison, etc.) - the institutional environment for the activities of individuals and organizations in the public sector. If the first direction focuses on the welfare gain that can be obtained due to a clear specification of property rights, then the second one focuses on the losses associated with the activities of the state (the economy of bureaucracy, the search for political rent, etc.).

It is important to emphasize that property rights are understood primarily as a system of rules governing access to scarce or limited resources. With this approach, property rights acquire important behavioral significance, since they can be likened to the original rules of the game that regulate relations between individual economic agents.

The theory of agents (relationships "principal-agent" - J. Stiglitz) focuses on the preliminary premises (incentives) of contracts (ex ante), and the theory of transaction costs (O. Williamson) - on already implemented agreements (ex post), generating various management structures. The theory of agents considers various mechanisms for stimulating the activities of subordinates, as well as organizational schemes that ensure the optimal distribution of risk between the principal and the agent. These problems arise in connection with the separation of capital-property from capital-function, i.e. separation of ownership and control - problems posed in the works of W. Berl and G. Minz in the 1930s. Modern researchers (W. Meckling, M. Jenson, Y. Fama, and others) are studying the measures necessary to ensure that the behavior of agents deviates to the least extent from the interests of the principals. Moreover, if they try to foresee these problems in advance, even when concluding contracts (ex ante), then the theory of transaction costs (S. Chen, Y Barzel, etc.) focuses on the behavior of economic agents after the contract is concluded (ex post) . A special direction within this theory is represented by the works of O. Williamson, whose focus is on the problem of governance structure.

Of course, the differences between theories are quite relative, and one can often observe how the same scholar works in different areas of neo-institutionalism. This is especially true for such specific areas as "law and economics" (economics of law), economics of organizations, new economic history, etc.

There are quite profound differences between American and Western European institutionalism. The American tradition of economics as a whole is far ahead of the European level, however, in the field of institutional studies, the Europeans turned out to be strong competitors of their overseas counterparts. These differences can be explained by the difference in national and cultural traditions. America is a country "without history", and therefore the approach from the standpoint of an abstract rational individual is typical for an American researcher. On the contrary, Western Europe, the cradle of modern culture, fundamentally rejects the extreme opposition of the individual and society, the reduction of interpersonal relations only to market transactions. Therefore, Americans are often stronger in the use of the mathematical apparatus, but weaker in understanding the role of traditions, cultural norms, mental stereotypes, etc. - all of which is precisely the strength of the new institutionalism. If representatives of American neo-institutionalism consider norms primarily as a result of choice, then French neo-institutionalists consider norms as a prerequisite for rational behavior. Rationality is therefore also revealed as a norm of behavior.

New institutionalism

Institutions in modern theory are understood as the "rules of the game" in society, or "man-made" restrictive framework that organizes relationships between people, as well as a system of measures that ensures their implementation (enforcement). They create a structure of incentives for human interaction, reduce uncertainty by organizing everyday life.

Institutions are divided into formal (for example, the US Constitution) and informal (for example, the Soviet "telephone law").

Under informal institutions usually understand generally accepted conventions and ethical codes of human behavior. These are customs, "laws", habits or normative rules, which are the result of the close coexistence of people. Thanks to them, people easily find out what others want from them, and understand each other well. These codes of conduct are shaped by culture.

Under formal institutions refers to the rules created and maintained by specially authorized people (government officials).

The process of formalizing restrictions is associated with increasing their impact and reducing costs through the introduction of uniform standards. The costs of protecting the rules are, in turn, associated with establishing the fact of violation, measuring the degree of violation and punishing the violator, provided that the marginal benefits exceed the marginal costs, or at least not higher than them (MB ≥ MC). Property rights are realized through a system of incentives (anti-incentives) in a set of alternatives facing economic agents. The choice of a certain course of action ends with the conclusion of a contract.

Control over compliance with contracts can be both personalized and non-personalized. The first is based on family ties, personal loyalty, shared beliefs or ideological convictions. The second is on the provision of information, the application of sanctions, the formal control exercised by a third party, and ultimately leads to the need for organizations.

The range of domestic works that touch upon issues of neo-institutional theory is already quite wide, although, as a rule, these monographs are not very accessible to most teachers and students, since they come out in a limited edition, rarely exceeding a thousand copies, which, of course, for such a large country as Russia very little. Among Russian scientists who actively apply neo-institutional concepts in the analysis of the modern Russian economy, one should single out S. Avdasheva, V. Avtonomov, O. Ananin, A. Auzan, S. Afontsev, R. Kapelyushnikov, Ya. Kuzminov, Yu. Latov, V. Mayevsky, S. Malakhov, V. Mau, V. Naishul, A. Nesterenko, R. Nureyev, A. Oleinik, V. Polterovich, V. Radaev, V. Tambovtsev, L. Timofeev, A. Shastitko, M. Yudkevich, A. Yakovleva and others. But a very serious barrier to the establishment of this paradigm in Russia is the lack of organizational unity and specialized periodicals, where the foundations of the institutional approach would be systematized.

institutionalism- the direction of social research, in particular, considering the organization of society as a complex of various associations of citizens - institutions(family, party, trade union, etc.)

institutional approach

The concept of institutionalism includes two aspects: "institutions" - norms, customs of behavior in society, and "institutions" - fixing norms and customs in the form of laws, organizations, institutions.

The meaning of the institutional approach is to include institutions in the analysis, to take into account various factors.

Within the framework of the institutional approach, society is considered as a certain institutional structure that accumulates the social experience of society and the state, a system of established laws, relationships and traditions, connections and ways of thinking.

From an institutional perspective, understanding how an institutional system functions requires taking into account the very complex relationships between society and institutions. The relationship between society and institutions is determined by a set of institutional constraints that determine the way the social system functions. Institutions are the key to understanding the relationship between society and the economy, politics, law, and the impact of these relationships on development. Ultimately, institutions are fundamental factors in the functioning of various systems in the long run.

History is of great importance for the institutional approach. It matters not just because lessons can be learned from the past, but also because the present and the future are linked to the past by the continuity of the institutions of society. The choice that is made today or tomorrow is shaped by the past. And the past can only be understood as a process of institutional development.

The institutional approach removes the question of the general and particular path of development of a particular country, since it assumes the existence of an individual institutional matrix for each country, namely, an interweaving of interrelated formal rules and informal restrictions that lead the economy of each country along its own path, different from the path of development of another country.

The commonality of borrowed rules of the game in countries with different institutional systems leads to significantly different consequences. Although the rules are the same, the mechanisms and practice of monitoring compliance with these rules, the norms of behavior and subjective models of players are different. Consequently, both the real system of incentives and the players' subjective assessment of the consequences of their decisions become different.

Within the framework of the institutional approach, for example, the market is considered as a certain institutional structure, covering laws, rules of the game and, most importantly, a certain type of behavior, relationships and connections. Everything else is an inefficient imitation of market activity, it is the inertia of development, an element that is not yet amenable to regulation by society and the state.

Institutionalists consider the social behavior of the individual as the result mainly of stable stereotypes of activities, customs and habits. As the main object of analysis, institutional theory does not take the individual, as neoclassicists do, but institutions. Institutionalism sees the individual as a product of a constantly evolving social and cultural environment. This helps to explain the creative and innovative activity of man. In this, too, the institutionalists diverge from the neoclassicals, who see the individual as a kind of slave to fixed preferences. Within the framework of the old institutionalism, an institution is defined through the category of custom. Thus, Veblen interprets institutions as "established habits of thought common to a given community of people." W. Hamilton, developing this idea, defines an institution as "a somewhat prevailing and unchanging way of thinking or acting, based on the customs of a group of people or an entire people." Thus, institutions are considered here primarily as socio-psychological phenomena, implicated in habits, customs, and instincts.

According to D. North's definition, institutions are the "rules of the game" in society, or, to put it more formally, the restrictive framework created by man that organizes relations between people. The most important properties of institutions from the point of view of this approach include the following* Institutions are the framework within which people interact with each other. * Institutions define and limit the set of alternatives that each person has. * Institutions set the structure of incentives for human interaction.

Methodological grounds

The differences between the three schools of institutionalism are manifested not only in the definition of an institution, but also in the methodological foundations, i.e. how the school answers the questions: where do institutions come from, how do they develop, and how do they institutionalize human activity.

The "old" institutionalism was based on the following logical constructions. When customs become common to a group or social culture, they grow into routines or traditions. As a rule, customs are implanted in other individuals by repeated imitations of social traditions or routines. This closes a self-reinforcing circuit: private customs spread throughout society, which leads to the emergence and strengthening of institutions; institutions nurture and reinforce private customs and transmit them to the new elements of the group. As Veblen pointed out, "selection" processes are involved: "Today's situation shapes tomorrow's institutions through selection and coercion, by influencing people's habitual beliefs or by reinforcing a point of view or mental perception brought from the past." [160, p.41].

Customs as institutions in the understanding of the old institutionalism are stable and inert, they tend to preserve their characteristics and thus "transmit them further", from the present to the future and from institution to institution. Knowledge and skills are partly rooted in customs. In this sense, habits have properties similar to the "information fidelity" of a living gene.

At the same time, institutions can change, they have nothing like the permanence of the gene. Only the relative invariance and self-reinforcing nature of institutions is emphasized. Institutions give form and social coherence to human activity, including through the continuous production and reproduction of stereotypes of thinking and activity.

By separating institutions from custom, the "new institutional economics" has formed new methodological foundations. The arrow of explanation is directed from individuals to institutions, individuals are taken for granted, they are given ontological priority. This assumes a certain initial "natural state", free from institutions. "The typical neo-institutional program is an attempt to explain the existence of institutions such as the firm or the state in terms of a model of rational individual behavior, treating unforeseen consequences in terms of interactions between people." .

The newest institutional approach rejected the methodological premises of the "new institutional economics" on the grounds that, in their opinion, the starting point of explanations cannot be free from institutions. The question of the emergence of institutions from some imaginary primary world, where there are individuals, but no institutions, is itself erroneous. The reformulated program emphasizes the evolution of institutions partly from other institutions, rather than from a hypothetical institution-free "state of nature."

According to D. North, "institutions are created by people. People develop and change institutions. At the same time, the restrictions imposed by institutions on human choice affect the individual himself." . The idea that "institutions both shape and are shaped by individuals" is reinforced by J. Hodgson. "Institutions do more than restrict and affect individuals. Along with our natural environment and our biological heredity, institutions shape us as social beings. They are our socio-economic flesh and blood." .

The "recent institutional approach" does not conceive of its research without including the historical past in institutional analysis. "Economic history relies on an unstructured set of parts and fragments of theory and statistics; it is not able to produce generalizations or analyzes that would go beyond the framework of a specific historical plot. The inclusion of institutions in history makes it possible to compose a much better presentation than without institutions, since it (history) appears before us as a continuum and sequence of institutional changes, i.e. in an evolutionary form." [94, p.167].

This approach follows from the key point of the analysis, which is as follows. .

Institutions form the basic structure from which people throughout history have created order. Institutions connect the past with the present and the future, so that history becomes a process of predominantly incremental (continuous) institutional development, and the functioning of economic systems over long historical periods becomes understandable only as part of an unfolding institutional process. Dependence on the trajectory of prior development means that history matters. It is impossible to understand the alternatives that we face today and determine their content without tracing the path of incremental development of institutions, which are characterized by a flow, usually quite complete, of the content of old institutions into new ones.

Relations between institutionalism and neoclassicism

All three directions of institutionalism had different attitudes towards the "mainstream" - the mainstream of Western economics - neoclassical theory.

There was a strong confrontation between the old institutionalism and the neoclassicism of the beginning of the century. In essence, the old institutionalism arose as "a reaction to the ahistorical and mechanistic interpretation of economic activity on the part of the orthodox doctrine." [92, p. 10 ]. This confrontation caused harsh assessments of the performance of the representatives of the "old institutionalism" by orthodox economists. Institutional economics has been called an "intellectual fiction", a "pathetic dissent from orthodox economics", "a strange mixture of excellent methodological theses and poor ad hoc analysis", producing "heaps of descriptive material waiting to be theoretically comprehended or burned", etc. .d. .

"New Institutionalism" is more in line with neoclassical theory, they are rather trying to expand its capabilities by referring to the analysis of economic institutions. The main focus of the new institutionalists is the concepts of property rights and transaction costs. This position is due to the proximity of methodological grounds. Following the tradition of orthodox theory, "new" institutionalists see the primary element of economic analysis in an abstract and individualistic subject with practically unchanged preferences, and organizations, law, etc. are derived from direct interaction between individuals. As a result of the rapprochement of neoclassicism with new institutionalism, a large field of study of economics "institutional aspects of the market economy" has emerged, which is currently being taught to students in the framework of economics. .

The "recent" institutional approach recognizes that the relationship between institutional-evolutionary theory and neoclassicism is now much more complex than in the days of the old institutionalism, the aggressiveness of which was caused by the desire to establish new principles and approaches in the scientific community. The institutional-evolutionary theory is much broader than the neoclassical one, both in terms of the object of analysis and methodology. This allows us to consider neoclassicism as a theory that gives a simplified vision of economic processes, which is far from equivalent to a distorted vision. The relationship between institutionalism and neoclassicism was even more clearly expressed by J. Hodgson: "neoclassical economics is a special case of institutional economics." .

Unlike the "new" institutionalists, the "recent" ones do not simply emphasize the importance of institutions, but regard them as full-fledged objects of economic analysis. The very fact that institutions show permanence over long periods of time and can live longer than individuals is one of the reasons for choosing institutions, rather than individuals, as the fundamental unit. According to the latest institutionalists, institutions fill a significant conceptual gap. Institutions are both "subjective" ideas in the minds of agents and "objective" structures that these agents encounter. The concept of institution links the microeconomic world of individual action, custom, and choice with the macroeconomic realm of seemingly detached and featureless structures. The choice of an institution as the unit of analysis does not necessarily imply the subordination of the role of the individual to the dominance of institutions. Individuals and institutions mutually constitute each other. [ 160, p. 64].

Results of institutionalism

In almost a hundred years, institutionalism not only managed to "reconcile" with neoclassical theory, but also formed a deep intellectual baggage.

The old institutionalism is usually criticized for the fact that "it failed to develop a unified methodology and a clear system of concepts." . At the same time, it was the representatives of this trend who put forward two key topics, without which modern economic science cannot do [ 160, p.34 ]:

* conditionality of people's actions by customs and norms; * institutions as possible bases or units of analysis.

New institutionalism has enriched economic theory with the concepts of property rights and transaction costs. In the traditional sense, property is seen as an absolute right to resources. The theory of property rights claims that it is wrong to identify property with material objects, it represents "bundles" of rights to the ratio of actions with these objects: to use them, appropriate the income received from them, change their shape and location. The main thesis of this theory is that the structure of property rights affects the distribution and use of resources. [ 119, p. 29-30].

The new institutional theory also introduces transaction costs as a key concept, which consist of the costs of searching for and acquiring information, negotiating and making decisions, verifying and ensuring their implementation. There are considerable problems with measuring these costs, but the use of this category allows us to turn to the analysis of contractual relations. In institutional economics, a person acts as a contractor. It is contractual relations that become effective means of exchanging "bundles" of property rights. .

The newest institutional approach attempts to overcome the ahistorical reasoning of the new institutionalism and sets itself the task of "development of a theoretical framework for the analysis of historically determined obstacles to economic growth." [ 119, p. 31]. The methodological program of the latest institutional approach, which has managed to synthesize everything necessary from the old and new institutionalism, shows the directions for the future development of the institutional-evolutionary theory.

The horizon of this work is seen as the resolution of "the main riddle of human history - how to explain the wide divergence (divergence) of the trajectories of historical changes. How did it happen that societies began to develop along divergent historical trajectories? Why do societies differ from each other? After all, we all, after all, descended from primitive societies of hunters and gatherers. The divergence of historical trajectories all the more confuses us when we try to view the world historical process from the standard positions of neoclassical doctrine." [94, p.21-22].

Main provisions of the institutional approach

Within the framework of the institutional approach, the main categories have been developed, which, when taken together, reflect the essence of this approach and which were actively used to develop an institutional theory of Russia's economic development. These include the following provisions. [94, p. 17.21, 112, 143, 144; 16, p.41]

An effective institutional system is such an institutional system that ensures economic growth. Institutional equilibrium (stability) is such a situation, which means that given the relative costs and gains from changing the game that the participants in contractual relations lead, it is unprofitable for them to change the game. This situation does not mean that all players are satisfied with the existing rules and contracts. The stability of institutions does not in the least contradict the fact that they undergo change. All institutions are developing. Institutional change determines how societies develop over time and thus is the key to understanding historical change. Dependence on the trajectory of the previous development arises due to the action of self-maintenance mechanisms of institutions that (mechanisms) reinforce the once chosen direction of development. Punctuated equilibrium is a representation of socio-economic development as a sequence of periods of institutional continuity, punctuated by periods of crises and more abrupt changes. Ideas and ideologies matter, and institutions crucially determine how much that matters. Ideas and ideologies form the subjective mental constructs by which individuals interpret the world around them and make choices.

The methodological and categorical tools of the latest institutional approach, in our opinion, are the most adequate for analyzing the institutional structure of Russian society, identifying the historical logic of its institutional development and the nature of modern institutional changes.

Features of the institutional approach

The institutional approach has one very important feature that characterizes this work. The essence of this property lies in the fact that within the framework of the institutional approach, theoretical work, historical research and analysis of situations on specific objects are combined simultaneously (ie, by one author). This is due to the tasks that institutionalism sets itself: "the result may be the development of a theory that will allow us to connect the micro-level of human activity with the macro-level of incentives formed by the institutional system." [94, p. 144].

All well-known institutionalists distinguished themselves by the triune characteristic ("theory - history - specific situation") of their research. Veblen studied prestigious consumption, W. Mitchell studied applied issues of economic dynamics, incl. economic cycle and monetary circulation, in the context of the activities of public and private organizations. [92, p. 12 ] Williamson explored years of experience in dealing with subcontractors of the large Japanese corporation Toyota. D. North applied an institutional approach to the US housing market.

Among the institutionalists, there was a belief that "scientists often resort to the analysis of specific situations, not because they are considered representative, but because they allow the most vivid and especially dramatic way to illustrate the problems under consideration." [ 148, p. 204].