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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 des Économistes et des Études Humaines – de Gruyter
Published: Jun 1, 1995
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