Institutional Economics: A Crucial
Tool
for Understanding Economic Development
Continuing the tradition of Bratislava Economic Open Lecture Series we are pleased to announce four mini-lectures on
Institutional Economics: A Crucial Tool for Understanding Economic Development
which will be delivered by John V. C. Nye (George Mason University), Mary M. Shirley (The Ronald Coase Institute), Lee Benham (Washington University in St. Louis and The Ronald Coase Institute), and Alexandra Benham (The Ronald Coase Institute).
The patronage over the lectures has been kindly adopted by the U.S. Embassy in the Slovak Republic.
Date: May 18, 2009 at 10:00
Venue: Faculty of National Economy, University of Economics in Bratislava (meeting room of the old building), Dolnozemská 1
The participation is open to academics, students, and general public.
Program
|
10:00–10:30 |
How the New Institutional Economics Changed Economics:
Institutions and the Problem of Economic Development John V. C. Nye, George Mason University |
The economy is not a machine. Yet it was commonplace for academics and policymakers to treat the problem of growth as a matter of judicious planning, as if a few more machines, or a larger injection of capital would turn impoverished nations into prosperous centers of production. The New Institutional Economics forced Economics to focus on institutions even as the profession struggles to deal with newer crises throughout the world. Mainstream economics has evolved at the same time as economists have grown more influential in the world at large. Yet much of the growth debate was mechanical and completely ignored the incentives of policy makers and the difficulties of establishing market-supporting rules in very different societies. The deeper questions regarding the importance of the institutional prerequisites of growth, such as well-functioning legal systems, secure property rights, and low cost transacting were largely ignored because they were difficult to model and hard to measure. As the awareness of institutional rules has grown we are all being forced to grapple with the problem of developing adaptive systems in nations with poorly developed structures, dysfunctional elites, and top-heavy bureaucracies that benefit from pre-existing flaws. Yet easy solutions that ignore the incentives of those implementing the reforms continue to dominate the debate.
|
10:30–11:00 |
Can Foreign Aid Promote the Institutions Poor Countries Need to Develop? Mary M. Shirley, Ronald Coase Institute |
Both economic research and the history of foreign aid suggest that the largest barriers to development arise from a society’s institutions – its norms and rules. Fundamental changes in deeply rooted norms and rules do not happen because of outsiders’ money, advice, pressures, or even physical force; which explains why foreign aid has not, and can not, improve institutions. To the contrary, the realities of foreign aid and the nature of aid-giving organizations are at odds with what we know about institutional change: that it is often gradual, path dependent, context specific, and contrary to notions of best practice in Western countries. The impetus for changing institutions must come from within a society. Often a threat or crises can create a political opportunity for fundamental change, but such changes are rare. Where such changes have occurred, groups of local scholars have provided an important impetus towards institutional change and development.
|
11:00–11:15 |
Obstacles to Research on Institutions: The Ronald Coase Institute Perspective Lee Benham, Washington University in St. Louis and The Ronald Coase Institute |
Institutional innovations usually fail. The rare successes are often overlooked. Why? Young scholars are the ones most likely to bring new insights, observations, and paradigms for institutional innovation, because they are not yet embedded in status quo incentives. However, getting the right scholars with the right skills to the right place and time is difficult. To begin with, the number of scholars with appropriate training, knowledge, and motivation is small. Even the best graduate programs are often weak in the requisite skills for institutional analysis. Second, serious research on institutions usually requires long-term investment by researchers with specific local knowledge. However, incentives within the academic community, government agencies, private funding sources, and NGO's are usually short-term and do not support the long-term specific investments needed. There is also brain drain. Skill in institutional analysis makes scholars attractive to employers outside their research arena. Capable local scholars are often swept up by major international organizations and private firms and taken away from where they have local knowledge. We see our role as working to overcome these obstacles.
|
11:15–11:30 |
Addressing Institutional Issues: The Role of the RonaldCoase Institute Alexandra Benham, The Ronald Coase Institute |
Knowledge about institutions – their creation, development, and outcomes – is limited. We in the Ronald Coase Institute believe that ideas matter and that good research concerning institutions can make a difference for development. Our goals are to build young scholars' capacity to analyze institutions, to support and encourage their research over time, and to involve them in a long-lasting community of excellent scholars. We already have built a network that has 264 scholars across 55 countries. Illustrations of excellent institutional research by scholars in the network will be discussed.
|
11:30–12:00 |
Discussion |
Short bios of the speakers
Alexandra Benham
Alexandra Benham is a founder and the Secretary of the Ronald Coase Institute. She has an M.S. in mathematics and did doctoral studies in political science (ABD) at Stanford University. Her areas of research include costs of exchange across countries, institutional reform, international relations, and the economics of information. She is a frequent lecturer on institutional analysis and research design. She co-organized the inaugural conference of the International Society for New Institutional Economics. She has served as editor of The Newsletter of the International Society for New Institutional Economics, 1997-2004.
Lee Benham
Lee Benham is Professor of Economics at Washington University in St. Louis. He has a Ph.D. in economics from Stanford University. His areas of research include the determinants and consequence of costs of exchange across countries and industrial organization. He currently teaches comparative systems, health economics, industrial organization, and institutional analysis. He has published in, among others, Journal of Political Economy, Review of Economics and Statistic, Journal of Law and Economics, Journal of Health Economics, and Economic Inquiry. He co-organized the inaugural conference of the International Society for New Institutional Economics and served on the board. He is a founder and board member of the Ronald Coase Institute.
John Nye
John Nye is Professor of Economics and holds the Frederic Bastiat Chair in Political Economy at George Mason University. He has a B.S. in physics from Caltech, and an M.A. and Ph.D. in economics from Northwestern University. He is a specialist in European economic history and the new institutional economics. He was a founding member of the International Society for the New Institutional Economics and has been on the editorial board of the Journal of Economic History. With John Drobak, he was co-editor of Frontiers in the New Institutional Economics. He has been a National Fellow at the Hoover Institution and a visiting professor at Stanford University. He was a regular visiting professor at the Institut d’Etudes Politiques de Paris. His book, War, Wine, and Taxes: the Political Economy of Anglo-French Trade 1689-1900, was published by Princeton University Press in 2007.
Mary Shirley
Mary Shirley is a founder and the President of the Ronald Coase Institute. Mary Shirley has a PhD in economics and has worked for over 30 years in development, including over 20 years as a research manager in the World Bank. She is the author of numerous scholarly articles and books on institutional issues in economic development, including a new book, Institutions and Development (Edward Elgar, UK, 2008) and co-editor of the Handbook for New Institutional Economics, recently republished in paperback (Springer, 2008). She has published in, among others, Journal of Banking and Finance, Journal of Comparative Economics, Journal of Law, Economics and Organization, World Bank Economic Review, World Bank Research Observer, World Development. She is a founder, board member, and past President of the International Society for New Institutional Economics (ISNIE).
Organized by: Ronald Coase Institute, University of Economics in Bratislava, and Virtual Scientific Laboratories
Supported by: U.S. Embassy and Tatra Banka Foundation
Organizing Committee: Urban Kováč (Virtual Scientific Laboratories and University of Economics), Jana Peliová (University of Economics), Andrea Šalingová (Tatra Banka Foundation), Maroš Servátka (University of Canterbury and Virtual Scientific Laboratories), Rudolf Sivák (Rector of University of Economics), Radovan Vadovič (ITAM and Virtual Scientific Laboratories)
