Summary Hybrid and microschools have expanded rapidly in the United States. These models do not fit neatly within existing governance categories, raising questions about how authority, accountability, and decision-making are organised in American education. This paper applies Ostrom’s Institutional Analysis and Development framework, widely used in natural resource and infrastructure governance but rarely applied to education, to compare institutional arrangements in conventional public schools and hybrid schools, where education is co-produced by families and providers. The comparison generates five propositions about how differences in physical arrangements, actors, rule systems, action situations, and accountability mechanisms shape governance outcomes. Hybrid schools exhibit characteristics of polycentric governance that conventional schools largely lack. A section on economic implications examines demand, supply, and information-cost dynamics. The paper concludes that Ostrom’s framework reframes education reform not as a contest between markets and governments but as an evolving search for effective rule systems in a polycentric public economy.
Abstract Institutional economics holds that informal institutions shape which formal rules communities adopt and how those rules work, yet it has not specified which informal institutions govern which outcomes. This paper identifies one, cultural reintegration architecture: the mechanism by which a community judges the failure of an economic actor and opens or closes the path to commercial standing. Its four observable elements, narrative scripts, moral attribution, ceremonial pathways, and community acceptance, locate a community on a spectrum from stigmatising to reintegrative. Six historical cases spanning eight centuries, Venice, the Hanseatic League, Meiji Japan, the Nattukottai Chettiar, the nineteenth-century United States, and Silicon Valley, ground three claims: the architecture is a structural variable separable from formal institutions, it conditions long-run entrepreneurial dynamism, and it shifts over time. The account specifies a mechanism within the informal-institutional space that North, Greif, and Putnam jointly occupy, grounded in the older institutionalism of Veblen and Commons.
Abstract Populists claim to empower ‘the people’, but do they help or hinder one of the foremost arenas in which people voluntarily engage with others – civil society? We study this question using a global panel of 79 countries (1970–2019) that combines party-level populism scores with legislative ideology and six indicators of the civil-society environment. We reduce the indicators using factor analysis to two outcomes: civil-society freedom and civil-society structure. We estimate country- and year-fixed-effects models and use lagged specifications and election-year interactions as timing diagnostics to assess whether the estimates are likely to be driven by contemporaneous electoral feedback. We find that greater right-wing populist representation is consistently associated with subsequent declines in both civil-society freedom and structure, while average associations for left-wing populism are small and often indistinguishable from zero. The right-populist association is conditioned by partisan balance, being strongest where right-wing parties dominate.
Summary Mongolia is often cited as a post-communist democratic success, yet its mineral wealth has not produced broad-based development. This article explains the paradox through the limited-access order framework of North, Wallis, and Weingast, arguing that a formally open polity coexists with an economy in which rents remain captured by a dominant coalition. Tracing the extractive sector across three stages – privatization (1990–1997), resource-nationalist contestation (1998–2012), and investor-protection rebalancing (2013–present) – it shows how three external mechanisms operating in sequence – international financial institutions, foreign direct investment, and transnational legal ordering – successively reshaped the rent structure and the coalition. Following the capacity of non-elite actors to contest rent distribution, substantive openness peaked in the 2000s and then narrowed sharply as economic policy was insulated from democratic pressure. Mongolia thus shows how mineral rents and external actors entrench limited-access logic rather than dissolving it.
Blockchain is frequently proposed as a solution to tenure insecurity, administrative inefficiencies, and corruption, where conventional land reforms have fallen short. However, evidence of its institutional effectiveness remains limited. Drawing on Williamsonian transaction cost economics and an analytical autoethnographic research design, we undertake a comparative analysis of blockchain's ability to curb opportunism and safeguard the interests of land-transacting parties relative to Ghana's customary and statutory land-governance structures. Our findings show that while blockchain performs well at some ex ante safeguards, it offers no clear advantage over existing governance structures at the ex post stage. Of the seven identified forms of post-transaction opportunism that buyers often face, blockchain was superior only in minimising hold-up risks. We conclude with implications for policymakers and technologists considering blockchain adoption.
Abstract What motivates small-and medium-sized enterprises (SMEs) to engage in environmental practices? Existing studies mainly distinguish between internal and external economic drivers of firms’ green behaviour. However, economic factors alone may provide only a partial explanation, as firms’ environmental decisions are also shaped by the broader social context in which they operate. In this paper, we examine how three key contextual actors – state, market, and community – influence SMEs’ provision of green products and services, and whether their interaction reflects the existence of a Green Social Contract between firms and society from a neo-institutionalist perspective. Using Eurobarometer survey data on SMEs combined with datasets on citizens’ eco-social attitudes and countries’ institutional and economic characteristics, the analysis shows that SMEs’ green behaviour is strongly shaped by contextual factors. Formal institutional quality has a positive and significant effect, while peer market pressure and community engagement promote firms’ green behaviour and can also partially compensate for weaker formal institutions. These findings highlight the importance of policies that encourage competition and transparency among firms and strengthen citizens’ environmental and social awareness to promote the provision of green products and services by SMEs.
This symposium grew out of dissatisfaction with the existing theories of institutions. Notwithstanding significant progress in the analysis of the macro-institutions through which systemic rules and norms are established and the micro-institutions through which actors decide and implement transactions within the playing field thus defined, researchers working along one or the other dimension faced a critical and largely unanswered question: how to bridge the gap between these two institutional layers? The selected articles assembled in this issue came out of efforts to identify and understand within a unified theoretical framework the arrangements through which these layers interact. Building on contributions in economics and other social sciences as well as from in-depth empirical studies, these articles explore the relevance of the concept of ‘meso-institutions’ to designate and characterize the devices (e.g. regulatory agencies) and mechanisms (e.g. guidelines) that connect the macro- and micro-institutional layers.
This Comment assesses the legacy of the 2015 JOIE debate, critiquing the economic conflation of de jure ‘property’ and de facto ‘possession’. Citation analysis confirms the debate’s sustained intellectual footprint, but this did not translate into the lexical shift advocated by its proponents. A text-mining analysis of 58 economics journals finds negligible adoption of the specific term ‘possession’. A broader test for a conceptual basket of related de facto terms also fails to find robust evidence; a fragile signal in one dataset, not replicated in a second. We conclude that no significant, profession-wide lexical adoption occurred.
Abstract This study examines how political constraints influence happiness using entropy balancing on data from 125 countries over the period 2006–2021. The findings reveal a positive and statistically significant relationship. A one-standard-deviation increase in political constraints (0.233) is associated with an approximate 0.10-unit increase in happiness, corresponding to a standardised effect of 0.092 standard deviations. While this absolute effect size is modest, as is typical for macro-institutional variables, it carries population-level relevance when contextualised within the subjective well-being literature. These results remain robust across alternative measures of political constraints, diverse model specifications, heterogeneity analyses, and alternative estimation methods. Finally, we identify political and economic freedom, control of corruption, the rule of law, income redistribution, and employment as the main channels through which political constraints affect citizens’ happiness.
Corruption persists because feedback between individual behaviour, social norms, and institutional rules creates self-reinforcing dynamics. Although laboratory experiments provide growing evidence on anti-corruption interventions, this literature remains fragmented, failing to explain why enforcement succeeds in some contexts and fails in others. To address this gap, this paper develops a Dynamic Corruption Equilibrium (DCE) Framework. Drawing on a Bibliometric-Systematic Review of 132 experimental studies, it identifies six intervention classes across institutional, social, and individual levels, with behavioural dispositions acting as cross-cutting moderators. While existing studies examine these interventions in isolation, overlooking cross-level interactions and behavioural heterogeneity, the DCE Framework integrates insights from complex adaptive systems theory and institutional economics to conceptualise corruption as a dynamic, multi-level system. By specifying three mechanisms: cross-level feedback loops, conditional pathways, and system bistability, the framework explains how corruption equilibria become self-reinforcing or shift, offering a diagnostic lens for analysing intervention effectiveness within complex institutional environments.
This paper elucidates the firm and corporation's institutional coevolution via the firm-corporation linkage debate between legal institutionalism (LI) and world power system theory (WPS). To drive a sustainability transition, it proposes 'regenerative characteristics' - extending multidomain, multitemporal, and ecosystem characteristics. Employing a transdisciplinary approach, the study synthesises LI's 'emergentist' and WPS's 'separation' views through comparative institutional analysis (CIA). Integrating corporate actor theory with an Ostromian perspective, it extends CIA to identify position as the generative mechanism linking micro-level actions to macro-level institutions. Theoretically, law structures coevolutionary governance, joint production demands an agreement of joint responsibility, and 'negotiated governance' emphasises capability evolution. Rejecting shareholder primacy, policies must tie legal recognition to external responsibilities, foster education for moral judgement, and incentivise regenerative characteristics. Ultimately, negotiated governance transforms the firm-corporation linkage into a responsible constituent of the global commons.
This study examines how institutional trust and governance quality shape citizens' evaluations of water services. Drawing on psychological and institutional theories, we develop a multilevel framework linking individual trust in public authorities to regional governance performance. Using multilevel logistic models and pooled data from the Italian National Institute of Statistics (ISTAT) Multipurpose Household Survey (2014-2019), combined with a regional Institutional Quality Index, we show that trust in local institutions is the strongest predictor of perceived service quality. At the contextual level, higher government effectiveness and control of corruption are associated with more favourable perceptions. These findings suggest that institutional trust operates as a heuristic under limited observability, while governance conditions shape the context in which such evaluations are formed.
The blockchain economics literature often models consensus participants as anonymous, interchangeable agents operating without institutional context. This paper argues that this 'permissionless' assumption describes open admission but abstracts from governance over rule change. Once governance is restored, mutable blockchain systems face a standard commitment problem: rule-changing coalitions may revise protocol rules after participants make chain-specific investments. The paper develops this claim through a comparative-institutional analysis of eight public blockchain systems and two illustrative cases: the BTC Core governance episode and the Ethereum DAO intervention. TCP/IP provides the institutional comparator: technical systems can evolve extensively while preserving base-layer semantic fixedness. Once governance is included, blockchain security is constrained not only by consensus costs but also by institutional commitment conditions: base-layer fixedness, coalition concentration, coordination thresholds, and identity-linked accountability.
Michael Jensen's late-career work on integrity is often interpreted as a departure from agency theory or as an attempt to introduce ethical considerations into a positive framework. This paper argues instead that integrity can be reconstructed as an extension internal to agency theory itself. Drawing on the Jensen and Meckling decomposition of agency costs, integrity is modelled as a bonding cost; a self-imposed constraint that raises the private cost of opportunistic behaviour and thereby economises on monitoring and reduces residual loss. Incorporating Buchanan's constitutional-stage logic, the analysis shows that integrity relocates rational optimisation to the choice of rules rather than to particular transactions. Integrity is further classified as an informal institution whose effectiveness depends on decentralised enforcement and institutional context. The paper concludes that integrity is neither an ethical supplement nor a scalable substitute for formal governance, but a bounded informal bonding mechanism whose effectiveness attenuates with organisational scale.
This study examines whether centralisation of environmental regulatory authority improves air quality by addressing governance failures in decentralised systems. Exploiting the staggered provincial implementation of China's environmental regulatory centralisation reform as a quasi-natural experiment, we employ a difference-in-differences framework with granular grassroots-level data to identify causal effects. Results demonstrate that centralisation substantially reduces particulatematter concentrations through three mechanisms: reducing elite capture by insulating decisions from local networks and corruption, correcting incentive-driven data manipulation as evidenced by convergence between satellite and official measurements, and internalising cross-jurisdictional externalities by aligning regulatory scope with pollution diffusion. Heterogeneity analysis reveals that pollution reductions are concentrated in regions with greater pollution severity and deeper corruption, whereas differences in economic development and industrial structure play a comparatively modest role. These findings advance institutional economics by providing causal evidence that governance structure reforms addressing elite capture and principal-agent problems can generate marked environmental improvements, with implications for regulatory design in developing economies facing weak local institutional capacity.
This paper provides a new theoretical framework and a criterion to model the choice between democratic, hybrid, and epistocratic modes of political governance. From a normative perspective, we claim that the specificity of information should guide the choice between these modes of political governance because of its impact on costs of political governance. Any issue has a degree of information specificity that determines costs of political governance, which are combined in a Social Costs Function. Therefore, the model helps to assess the relative efficiency between democratic, hybrid, and epistocratic decision-making procedures to reach collective choices. The last section proposes extensions of the model by discussing how political, cultural, and epistemic institutions as well as polycentric governance modify the parameters of the model.
Contested commodities such as kidneys, surrogate pregnancies, or sex work raise questions about whether these exchanges improve people's lives or cause harm. We address this issue by examining how U.S. participants perceive changes in buyers' and sellers' welfare resulting from contested-commodity transactions. Across both contested and non-contested commodities, respondents predominantly evaluated exchanges through a zero-sum lens - assuming that one party gains at the other's expense. Despite normative debates emphasizing the vulnerability of sellers in contested markets, participants frequently viewed sellers as the beneficiaries, though less strongly than in non-contested exchanges. These findings have implications for the institutional analysis of contested commodity markets. Because the perceived legitimacy of market institutions partly depends on public beliefs, our results help illuminate the moral and policy disputes that shape debates over commodification.
The modern business corporation emerged from the medieval and chartered corporations. The medieval tradition of legal pluralism was replaced by two 'pure' disciplines - Law and Economics - that left no conceptual space to understand its hybrid nature, decentralizing law-making and centralizing market transactions, or to frame its person-thing duality. Under intellectual monopoly capitalism, this hybrid nature has degenerated: corporations have monopolized knowledge, outsourced production to dependent peripheral firms, and become deeply intertwined with financial markets and geopolitical rivalries - lending substance to notions of techno-feudalism, while marking a profound break with the medieval tradition of open science that first made competitive markets possible.
This paper examines relationships between AI occupational exposure and workforce patterns in U.S. federal agencies from 2019-2024. Using administrative employment data, we document systematic associations between agencies' concentrations of AI-exposed occupations and employment dynamics. Agencies with higher AI exposure exhibit declining routine employment shares, expanding expert roles, and wage compression effects. We develop a theoretical framework incorporating institutional constraints distinguishing public organisations: employment protections, standardised compensation systems, and political oversight. The model features strategic interactions between budget-maximising directors and electoral-sensitive overseers, predicting workforce evolution under institutional constraints. Our identification exploits fixed occupational exposure scores, so observed changes in agency-level exposure reflect workforce composition shifts rather than measurement artefacts. Patterns suggest agencies with greater AI-susceptible occupations experience reallocation rather than displacement, providing insights for understanding technological change in institutionally constrained environments and informing governance frameworks balancing modernisation with democratic accountability.
John Rawls proposed a theory of justice for the basic structure of society. Surprisingly, his suggestions for tax institutions were not well articulated. Rawls's principles of justice do not prescribe a unique set of tax recommendations, but his remarks on tax matters reflect his vision of society as a cooperative venture in which everyone must work. This paper makes two contributions. First, it offers a chronological, systematic, and contextual analysis of what Rawls wrote on taxation. Rawls's comments on taxation reveal his lifelong concern for preserving market incentives and his rejection of ability-to-pay as a principle of taxation. Second, the paper argues that some of Rawls's tax proposals belong to nonideal theory because they depend on a conception of individuals in tension with the conception of moral persons developed in his theory.
