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Institutional Competition. Notes on an Unfinished Agenda

Institutional Competition. Notes on an Unfinished Agenda Michael Wohlgemuth0 I. Introduction: Challenges ahead Institutional competition or the competition between politico-economic systems (in the following abbreviated to 1) denote phenomena neither new to history nor to social theory. However, we argue, mainstream economic paradigms in their present state are rather unprepared to cope with the very idea of "exit" in this context, implying spontaneous, individual choices of rules. Mainstream market economics and economics of politics, we argue, cannot claim to have developed a theoretical framework readily at hand for analysing the interrelated processes of 1. Mainstream market economics is only reluctantly relaxing its habitual basic assumptions of a "neutral" or "given" institutional framework. The existence of 1, however, is nothing less than another empirical proof of the non-neutrality of institutions. At the same time, it adds a new dimension to market dynamics. Competitive markets display their dynamic potential not only within a framework of given, exogenous rules. In the context of 1, phenomena like creative destruction, innovation and imitation are to be related to the rules themselves. Furthermore, they have to be regarded as unintended consequences of marketprocesses. All this illustrates the quest for an endogenization of institutions. Mainstream economics of politics or Public Choice, due http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal des Économistes et des Études Humaines de Gruyter

Institutional Competition. Notes on an Unfinished Agenda

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References (53)

Publisher
de Gruyter
Copyright
Copyright © 1995 by the
ISSN
2194-5799
eISSN
2153-1552
DOI
10.1515/jeeh-1995-2-303
Publisher site
See Article on Publisher Site

Abstract

Michael Wohlgemuth0 I. Introduction: Challenges ahead Institutional competition or the competition between politico-economic systems (in the following abbreviated to 1) denote phenomena neither new to history nor to social theory. However, we argue, mainstream economic paradigms in their present state are rather unprepared to cope with the very idea of "exit" in this context, implying spontaneous, individual choices of rules. Mainstream market economics and economics of politics, we argue, cannot claim to have developed a theoretical framework readily at hand for analysing the interrelated processes of 1. Mainstream market economics is only reluctantly relaxing its habitual basic assumptions of a "neutral" or "given" institutional framework. The existence of 1, however, is nothing less than another empirical proof of the non-neutrality of institutions. At the same time, it adds a new dimension to market dynamics. Competitive markets display their dynamic potential not only within a framework of given, exogenous rules. In the context of 1, phenomena like creative destruction, innovation and imitation are to be related to the rules themselves. Furthermore, they have to be regarded as unintended consequences of marketprocesses. All this illustrates the quest for an endogenization of institutions. Mainstream economics of politics or Public Choice, due

Journal

Journal des Économistes et des Études Humainesde Gruyter

Published: Jun 1, 1995

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