New Institutional Economics and Economic Development

Abstract

In recent years, the concept of “institutions” has become central in scientific and political discourse. This reflects an increasing awareness of the role of institutions in the functioning of economies and in economic development more generally. Many of the catchphrases articulated within new institutional economics such as “institutions,” “organisations,” “transaction costs,” “property rights,” and “contracts” have become very common in orthodox economics discourse. This development is intellectually stimulating and interesting because it raises some fundamental issues with regard to the role and functioning of institutions. These concepts are seated on Smith's idea of the “harmony of interests.” However, Smith sees power as dominant in the formation of institutional framework. This chapter aims to provide a Smithian critique based on the notion of power, arguing that the formation of institutions and institutional framework cannot be considered apart from the intrinsic power relations which are vested in society.

An Integrated Framework for Sustainable Development in Agri-Food SMEs

“…Systems of innovation have been recognised as beneficial analytical tools for better understanding innovation processes, as well as the creation and dissemination of information and knowledge in the economy [68]. Sustainable development is dependent on organisations, institutions, and policies that strive to generate and improve wealth in ways that ensure long-term environmental, social, and economic well-being [69,70].…”

History, Knowledge, and Sustainable Economic Development: The Contribution of John Stuart Mill’s Grand Stage Theory

“…According to the aforementioned analysis, Mill's (pluralistic) view of human progress impelled him to form an interesting typology of stages theory. We believe that his theoretical contribution can be used-along with the great legacy of classical political economy [14]-as a grand theory to understand the study of problems and phenomena of today's societal development. More specifically, Mill utilized a variety of elements that are transforming as society is moving from one stage to the next.…”

“…The former refers to the size of the economy, notably measured by the GDP indicator, whereas the latter indicates the general qualitative characteristics (i.e., social and environmental factors) involved and affected by economic activity [10,11]. In this regard, sustainable economic development is contingent upon the organizations, institutions, and policies that aim to increase and enhance the wealth in ways that guarantee environmental, social, and economic well-being over time [12][13][14]. For instance, policies for more stringent environmental rules, control of corruption, and lower corporate taxes encourage and facilitate environmental innovations by enhancing the technical efficiency of firms and paving the way to sustainable economic development [15].…”