A Research Agenda for New Institutional Economics
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A Research Agenda for New Institutional Economics

Edited by Claude Ménard and Mary M. Shirley

Consisting of 30 concise chapters written by top scholars, this Research Agenda probes the knowledge frontiers of issues long at the forefront of New Institutional Economics (NIE), including government, contracts and property rights. It examines pressing research questions surrounding norms, culture, and beliefs. It is designed to inform and inspire students and those starting their careers in economics, law and political science. Well-established scholars will also find the book invaluable in updating their understanding of crucial research questions and seeking new areas to explore.
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Chapter 16: Internal institutions: the major unknowns in institutional economics

Stefan Voigt


The crucial role of institutions for economic development is not challenged by anybody in the New Institutional Economics. Yet, to be empirically convincing – and to keep the NIE on its growth path – reliable measures for both external and internal institutions are needed. Internal institutions are those rules whose non-compliance is sanctioned by members of society – not by representatives of the state. This chapter argues that some important questions in the NIE can only be answered if good measures for institutions are made available. This is true in particular for internal institutions. These questions include: (1) What role do internal institutions play for economic development? (2) What are the fundamental determinants of internal institutions? (3) What are the effects for economic development when external and internal institutions are in conflict? (4) Under what conditions will internal institutions be replaced by external ones? (5) Are conflicts between internal and external institutions an important reason for the incomplete implementation of external ones? (6) Are internal institutions likely to change if two groups following different sets of internal institutions interact frequently?

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