Formal Approaches to Socio-economic Analysis—Past and Perspectives

Abstract

This paper is motivated by the observation that (1) socio-economic analysis uses significantly less formalisms than mainstream economics and (2) that there exist numerous situations in which socio-economics could benefit from a more formal analysis. This is particularly the case when institutions play an important role in the system to be investigated. Starting with a broad conception of formalism, this paper introduces and discusses five different formal approaches regarding their adequateness for socio-economic analysis: The Social Fabric Matrix Approach, the Institutional Analysis and Development Framework, System Dynamics, (Evolutionary) Game Theory and Agent Based Computational Modelling. Every formalism entails implicit ontological and epistemological tendencies that have to be reflected on if the formalism should contribute to a better understanding of the system under investigation. The above-mentioned formalisms are no exception. Therefore, this paper pays particular attention to these tendencies. In the end, antagonisms and possible convergences among the formalisms are discussed.

Economics and Political economy textbooks: 28 years of interaction

“…Socio-economic analysis uses significantly less formalism than Mainstream. Five different formal approaches are discussed regarding their adequacy for socio-economic analysis: matrix approach to social structure, institutional analysis and development structure, system dynamics, (evolutionary) game theory, and agent-based computational modeling [54].…”

Evolution-Based Approaches in Economics and Evolutionary Loss of Information

“…While many of the analytical tools were not available at the time, both evolutionary biology and a slowly developing field of evolutionary and dynamic economics (Nelson and Winter (1982), Hayden (1982), Bush (1987), Silverberg et al (1988), Elsner (2012), Gräbner (2015)) have made tremendous progress.…”