Kevin E. Davis (ed.), Institutions and Economic Performance (Cheltenham, UK: Edward Elgar, 2010).

Martino Bianchi
Content Type
Journal Article
Central European University Political Science Journal
Issue Number
Publication Date
May 2011
Central European University
The relevance of institutions for the economic analysis is a theoretical core issue within contemporary debate. Mainstream neoclassical economics, in fact, has traditionally considered institutions as a peripheral element: they are constraints, which can interfere with market outcomes, but that nevertheless are mainly irrelevant in understanding the inner mechanisms of markets. On the contrary, within the Institutional Economics, and later the New Institutional Economics (NIE) many scholars has tried to support the idea that institutions are the crucial element which explains economic performances: moulding actors preferences and behaviour, institutions directly affect each element of economics theory. In their analyses NIE scholars draws from various scientific disciplines, like political science, cognitive theories, social psychology and sociology: they make an attempt to abandon the thrifty descriptions produced by mainstream economists, giving a much broader insight in economic dynamics. At the same time, they try to outline an empirical description of market's configuration. In the last two decades NIE has gained considerable relevance and scientific recognition: first Ronald Coase, in 1991, then Douglass C. North in 1993, and finally Oliver E. Williamson and Elinor Ostrom who, in 2009, won the Nobel Prize for Economics. Despite this, NIE is still usually referred as a heterodox scholarship.