This paper proposes an analytical-cum-conceptual framework for understanding the nature of institutions as well as their changes. First, it proposes a new definition of institution based on the notion of common knowledge regarding self-sustaining features of social interactions with a hope to integrate various disciplinary approaches to institutions and their changes. Second, it specifies some generic mechanisms of institutional coherence and change – overlapping social embeddedness, Schumpeterian innovation in bundling games, and dynamic institutional complementarities – useful for understanding the dynamic interactions of economic, political, social, organizational, and cognitive factors.

Does limited social knowledge inhibit government intervention or, conversely, demand it? This article confronts these two positions, as they are respectively advocated by Hayek and Popper, and sets out to substantiate the belief that Popper's view is the more coherent one.

This paper develops an organizational economics explanation for agricultural cooperatives by building upon the transaction cost theory of family farms. According to this theory, the importance of family farms in Western agriculture is a result of the low feasibility of hierarchical organization in agricultural production due to supervision and monitoring difficulties. This paper argues that the transaction cost-economizing effect of family farms has a price in the form of their limited ability to realize economies of scale and to develop market power comparable to that of their up- and downstream trading partners. The role of agricultural cooperatives is shown to help overcome these limitations in order to take advantage of the transaction-cost economizing properties of family farms. This explanation of agricultural cooperatives is sector-specific in the sense that it traces the benefits of cooperative organization back to the organizational attributes of agricultural production.

This essay presents a cross-sectoral analysis of innovation in some types of services, namely air traffic control, retail banking, and health care. The provision of such services is organized in network structures whose development relies on competences and activities that cut across traditional sectoral and industrial boundaries. The conceptual background provided by the recent synthesis approach explains these features by elaborating a new concept of system of innovation. In so doing, this approach paves the way for new understanding of innovation in services as the endogenous outcome of knowledge growth within and across technologies, organizations, and institutions.

Economic sociology was a core concern of early political economists like Smith, Marx, Pareto, and Marshall. The new economic sociology has sought to revive the neglected subdiscipline using the construct of interpersonal networks. Richard Swedberg has assembled 42 substantial papers in this collection. This article, reviewing his selection, proceeds in three stages. First, it provides a general framework for the debate. Second, it discusses the papers specifically linked to networks. Third, it analyses the contributions that go beyond the concept of social processes as personal relationships.