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The taming of institutions in economics: the rise and methodology of the ‘new new institutionalism’

Published online by Cambridge University Press:  23 October 2009

PETER SPIEGLER  and
WILLIAM MILBERG
PETER SPIEGLER*
Affiliation:
University of Massachusetts, Boston, MA, USA
WILLIAM MILBERG
Affiliation:
New School for Social Research, New York, NY, USA
*
*Correspondence to: Peter Spiegler, University of Massachusetts-Boston, 100 Morrissey Blvd., Boston, MA 02125, USA. Email: peter.spiegler@umb.edu.
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Abstract:

We examine the origin and methodology of a ‘New New Institutional Economics’ (NNIE) – an emerging research agenda distinguished by its attempt to account for the role of institutions in complex socio-economic change by formally modeling institutions as the background conditions to parameterized cost–benefit calculations. The NNIE expands the application of economic modeling tools to new areas of inquiry, models institutional outcomes with parsimony and mathematical rigor, and introduces political and economic power, thereby allowing for consideration of institutional change that is not Pareto improving. Using a four-part analytical framework, we find that the explanatory power of NNIE analysis derives not from its formal models, but from a more vague, nuanced, and narrative version of the formal models, which we call ‘Quasi-Models’. We find that the NNIE's formal models are too parsimonious to meaningfully illuminate the complex institutions they ostensibly represent.

Type
Research Article
Information
Journal of Institutional Economics , Volume 5 , Issue 3 , December 2009 , pp. 289 - 313
Copyright
Copyright © The JOIE Foundation 2009

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