G9

• Institutions


  The rules of the game of a society or more formally are the humanly-devised constraints that structure human interaction
• Components of institutions

  • Formal rules (statute law, common law, regulations etc.)
  • Informal constraints (conventions, norms of behavior, and self-imposed codes of conduct etc.)
  • Enforcement characteristics of both
• Formal rules to facilitate exchange

  • Political and Judicial rules that define the hierarchical structure of the polity, determine how decision making is made and control is conducted
  • Economic rules that define property rights and the ability to alienate an asset or a resource
  • Contracts that define specific agreement in exchange
• Property rights


  The acknowledged right to use and benefit from a tangible (e.g., land) or intangible (e.g., intellectual) entity that may include owning, using, deriving income from, selling, and disposing
• Institutional framework with well-defined property rights


  • Lessens transaction costs of production and thus lead to more productive economic outcomes
• Ownership


  Possession of the residual rights of control and rights to residual returns
• Secure property rights


  They are clearly defined and contracts made to be enforceable
• Types of rights over an asset

  • Rights of Control (constitute the exclusivity of property)
  • Rights to Income (are rights to use the income generated by the property)
  • Rights of Alienation (allow the owner to sell property for money, rent it or give it as a gift)
• Principles of good governance


  • Rule of Law
  • Participation
  • Responsiveness
  • Consensus Orientation
  • Equity and Inclusiveness
  • Effectiveness and Efficiency
  • Accountability
  • Transparency
• Accountability


  Ensures that public officials and institutions are answerable for their actions and decisions
• Transparency


  Availability of information to the general public and clarity about government rules, regulations, and decisions
• Effects of good governance, accountability, and transparency on economic development

  • Reduced Corruption
  • Improved Allocation of Resources
  • Increased Foreign Direct Investment
  • Strengthened Rule of Law
  • Enhanced Public Trust
• New Institutional Economics (NIE)


  A framework that extends traditional economic analysis by incorporating the role of institutions in shaping economic behavior
• Key concepts of NIE

  • Transaction cost
  • Property rights
  • Contracts and Governance Structures
  • Institutional environment
• Ronald Coase


  • Considered one of the founding figures of NIE, introduced key concepts that have become fundamental to the field, including transaction costs and property rights, and presented the Coase Theorem
• Douglass North


  • Expanded New Institutional Economics by emphasizing the role of institutions in economic development, highlighting how institutions such as property rights, legal systems, and governance structures shape long-term economic performance and growth
• Oliver Williamson


  • Expanded the analysis to transaction cost economics and organizational theory, highlighting the importance of hierarchies and markets in reducing transaction costs
• Applications of NIE


  • Economic Development
  • Organizational theories
  • Public Policy
• Meta-Governance


  The processes, principles, and frameworks through which different forms of governance are coordinated and managed
• Key concepts of Meta-Governance


  • Coordination of Governance Modes
  • Policy Integration
  • Reflexivity
  • Steering Mechanisms
• Bob Jessop


  • Known for his work on state theory and governance, focusing on the complexity of modern governance and the need for a coordinated approach to managing various governance mechanisms
• Applications of Meta-Governance

  • Environmental Policy
  • Urban Planning
  • Public Health