The Problem with Neoclassical Institutional Economics: A Critique with Special Reference to the North/Thomas Model of Pre-1500 Europe

25 Pages Posted: 20 Mar 2008

See all articles by Alexander J. Field

Alexander J. Field

Santa Clara University - Leavey School of Business - Economics Department

Abstract

A variety of scholars with widely differing political and disciplinary orientations continue to be fascinated by the prospect of making endogenous variation or changes in institutional structures through the use of a general model. While sympathetic to the appeal of such a research program, I argue in this paper that this methodological objective is, in the following sense, not attainable. At a minimum, some subset of institutional structures or rules needs to be treated as parametric in a general equilibrium model, and granted the same explanatory status accorded tastes, technologies, and endowments in these models. This proposition is developed through a critical analysis of work representative of this research program: in particular Richard Posner's Economic Analysis of Law (Boston: Little Brown, 1973) and, more especially, Douglass North and Robert Paul Thomas' The Rise of the Western World (London/New York: Cambridge University Press, 1973).

Keywords: Institutions, legal systems, economic development

JEL Classification: B41, K00, N43, O52, P51

Suggested Citation

Field, Alexander J., The Problem with Neoclassical Institutional Economics: A Critique with Special Reference to the North/Thomas Model of Pre-1500 Europe. Explorations in Economic History, Vol. 18, No. 2, 1981, Available at SSRN: https://ssrn.com/abstract=1111423

Alexander J. Field (Contact Author)

Santa Clara University - Leavey School of Business - Economics Department ( email )

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