This paper is a contribution to the advancement of a naturalistic social ontology. Individuals participate in an institutionalized practice by following rules. In this perspective, I show that the nature, the stability, and the dynamics of any institution depend on how people reason about states of affairs that do not occur. That means that counterfactual reasoning is essential in the working of institutions. I present arguments for the importance of counterfactuals as well as a game-theoretic framework to account for them. Since the role of counterfactuals does not directly transpire in people's behavior, the whole discussion can be seen as a broad argument against behaviorism in philosophy and the social sciences.

This paper advances and defends the proposition that the basis for the evolution of institutions is the evolution and competition of ideas in the public sphere. This is based on a deeper proposition that institutions are ideas and ideas become institutions. We draw on the ‘Brisbane School’ of evolutionary/institutional economics and of behavioural/psychological economics to investigate the microdynamics of the competition of ideas in the public sphere, which has been studied at a macroscopic level by Isabel Almudi, Francisco Fatas-Villafranca and Jason Potts. The theory we develop gives us a new vision of institutional evolution as emerging from the microdynamics of the evolution and competition of ideas in the public sphere, and a new foundation for institutional theory. It gives us a new vision of the microdynamics of institutional evolution, the evolutionary fitness of ideas for competition in the public sphere and the likely path of institutional evolution.

Thorstein Veblen was a pioneer in recognizing the necessity of grounding social science in Darwinian biology and exploring how evolving institutions channel biological proclivities. He especially focused upon how capitalism's social institutions guided the innate need for social status into conspicuous consumption. But why do humans seek status? Surprisingly, Veblen did not pick up on Darwin's concept of sexual selection and recognize it as the driving force behind behavior intended to favorably impress others. This article adds the Darwinian depth that Veblen missed to his understanding of the biologically driven quest for status and its channeling by social institutions. It then explores the turn of most institutionalists away from Veblen's focus on innate behavioral drives in favor of viewing human behavior as more exclusively determined by social conditions. It concludes with reflections on the implications of sexual selection and biological grounding more generally for a theory of institutional economics.

The article provides an overview on the emergence of dispute resolution institutions in society and market, their pivotal role and their impact on the human activities. It introduces then recent researches conducted by a pool of scholars in order to advance the understanding of modern judicial institutions which represent the aims of this journal issue.

In the present paper we contribute to the previous literature on de facto enforcing mechanisms, by focusing on the role of judicial institutions and their performance and measurement. We propose both theoretical and empirical evidence supporting the necessity of a clear distinction between two measures of judicial performance, efficiency and efficacy, which have often been confused in previous literature. Not only might economic actors not be affected to the same extent by these two indicators, but we show that these measures do not even correlate significantly with each other. We also bring evidence against the alleged trade-off between the quality of justice and judicial performance in its quantitative dimension, showing that this relationship is much more complicated than is claimed by some legal scholars.

The prosecution of criminal suspects is an integral part of a country's justice system. While substantial scholarly attention has been devoted to the study of the police and judges and their relevance to the rule of law, surprisingly little is known about prosecutors. The aim of this paper is to contribute towards filling this knowledge gap. We first demonstrate the rising importance of prosecutors in criminal justice systems around the world. We identify the independence of prosecution agencies from the other two branches of government as a centrally important characteristic and then proceed to analyse the determinants of de facto prosecutorial independence from a political economy perspective. We find that press freedom, the immunity of parliamentarians and belonging to the common law tradition are positively associated with higher de facto independence.

This paper aims to evaluate the impact of Italy's unification on its economic growth from 1861 to the outbreak of World War II. This historical analysis attempts to prove that the process of legislative harmonization intrinsic to the unification had a positive effect on Italy's GDP because legislative uniformity facilitates economic transactions. Moreover a uniform and more effective legislation would have caused less litigation and therefore favoured economic growth, thanks to smoother relations between economic agents.

Because verdicts are typically the more costly resolution of legal disputes, most governments are interested in high settlement rates. In this paper, we use a unique dataset of 860 case records from a German trial court to explore which institutional factors have a significant impact on the decision to settle in civil law litigation. We find that procedural aspects and individual characteristics of the involved judge have a significant impact on in-court settlement probability. We also find that judge-specific aspects such as the judge's gender may have an impact on settlement probabilities in certain subfields of law. Based on our empirical results, we derive some conclusions for legal policies that aim at increasing settlement rates.

Are judges biased in their decisions? If so, what are the consequences? We propose a conceptual model that estimates the effects of judicial bias and insecurity on the trustworthiness of courts. Additionally, we empirically assess evidence of bias among justices at the Superior Court (STJ). For this purpose, we analyzed 1,412 decisions from 1998 to 2008. Results do not show consistent strong bias toward either the debtor or the creditor. We test a second hypothesis: that Brazilian courts are unpredictable, creating high levels of judicial insecurity. Empirical results corroborate this idea. Finally, we relate the empirical results found in this paper with the conceptual model initially developed, and provide evidence measured by a nationwide survey on the trustworthiness of the judiciary. As our model predicted, preliminary results indicate that citizens have lower levels of trust in the judicial system if courts and judges are biased and unpredictable.