Framing Institutional Choice, 1937–1973: New Institutional Economics and the Neglect of the Commons

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Desmarais-Tremblay, Maxime and Stojanović, Aleksandar. 2022. Framing Institutional Choice, 1937–1973: New Institutional Economics and the Neglect of the Commons. Review of Political Economy, 34(4), pp. 665-691. ISSN 0953-8259 [Article]

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Official URL: https://doi.org/10.1080/09538259.2022.2096284

Abstract or Description

Progressives the world over cherish high hopes in the development of institutions for collective actions. Among these institutions, commons have a long history in western Europe. While a new institutional economics emerged in the 1960s, commons were not taken seriously in postwar economics before the seminal work of Elinor Ostrom in the late 1980s. How can we explain this belated integration of commons in economics? In this paper, we trace some of the origins of the neoclassical comparative institutional analysis. By advocating an institutional comparison in terms of the costs or the value of production under alternative allocations of property rights, Ronald Coase contributed to the narrow theoretical approach taken by new institutional economists. In the late 1960s, neoclassical economists who came to be interested in environmental questions dismissed commons as inefficient solutions to allocation problems. Within this narrow framework, the private enterprise system more often than not was hailed as the best alternative.

Item Type:

Article

Identification Number (DOI):

https://doi.org/10.1080/09538259.2022.2096284

Additional Information:

JEL Codes: B25; B52; D23; K00; N01; Q20

Keywords:

Commons, externalities, New institutional economics, Ronald Coase, transaction costs, property rights

Departments, Centres and Research Units:

Institute of Management Studies
Politics > Political Economy Research Centre

Dates: