In the population, the knowledge of the law is at best fragmentary. It takes law students years to handle the law properly. How is the law nonetheless able to govern people's lives? To find an explanation, this paper draws on neurobiology, developmental psychology, and the psychology of learning.

Typically, the law reaches its addressees indirectly. The law is not followed, it is learned. There are two learning objects. In childhood, individuals acquire normative proficiency, i.e. the ability to handle normative expectations. This procedural knowledge is gradually filled with the declarative knowledge of individual normative expectations of legal origin.

If the law changes, through secondary learning, individuals must acquire new normative expectations. To that end, some intermediary must translate the new rule into a more contextualized social mirror rule. If changes are fundamental, as after the fall of the iron curtain, individuals must also learn new ways to handle normative expectations.

Hernando de Soto attributes the poor economic performance of developing countries to insecure property rights. When property rights are not well-defined individuals do not have the incentives to invest in capital, and assets cannot be used as collateral, hindering capital formation and economic growth. This paper tests de Soto's hypothesis empirically by examining how the security of property rights impacts wealth, collateral, and capital formation across nations. Using several different measures and model specifications, we find support for de Soto's conjecture. Our results suggest that better defined property rights would result in substantial improvements in capital formation and economic growth in developing countries.

This paper aims at analyzing the interaction between both economic and sociological notions of convention. To this end, it starts by distinguishing conceptually between specific convention, i.e. an arbitrary but stable social regularity, and general convention, i.e. a principle of action prescribing how to behave in a certain class of situations. A game theoretical framework to represent the interrelation between both concepts is then introduced. Finally, this relation is studied experimentally. The main results of the experiment are: (1) general conventions have to be commonly known and adopted among subjects in order to work as guides to coordinate on specific conventions; (2) once subjects follow a general convention they are highly consistent with it in a repeated environment; (3) efficiency concerns are focal in the class of games studied in this paper.

The article discusses institutional theories in economics and sociology. The discussion adopts W. Richard Scott's classification into regulative, normative, and discursive theories. A fourth alternative, habitual institutionalism, is also presented because of the problems encountered with the other theories. Pragmatically inclined habitual institutionalism presents a consistent theory of action wherein conscious action is derived from habitual action, which is also the basis of institutionalization. In addition, habitual institutionalism portrays human rationality more extensively than economists and sociologists have traditionally done. For these reasons, the difficulties associated with other institutional theories can be avoided.

Taking water institutions as an illustrative context, this paper attempts a quantitative analysis of the structural and functional linkages within institutional structure and indicates their performance implications and strategic importance for promoting institutional reforms. Against an overview of existing empirical works on institutions in general and water institutions in particular, the paper develops an analytical framework for specifying alternative models of institution–performance interaction within the water sector under different assumptions concerning institutional linkages and their structural properties. These models are, then, empirically estimated using the perception-based information provided by an international panel of 127 water experts from 43 countries and regions around the world. Based on the model results, the paper offers quantitative evidences for institutional linkages and their performance implications, and concludes by indicating their policy roles, especially in developing some reform design and implementation principles useful to overcome the technical and political economy constraints for institutional reforms.

Nasir ad-Din Tusi's (born 1201 in Tus in northeastern Persia; died 1274 in Baghdad), has been far more influential for his various contributions to astronomy and mathematics, including founding the Maraghah observatory (in Iranian Azerbaijan) and his brilliant reformulations of the Ptolemaic planetary model, which served as an important inspiration for Nicolaus Copernicus (1473–1543) revolutionary work than for anything else. Nonetheless, he also stands as one major figure in the medieval Islamic philosophical ethics and a profound thinker on socio-economic matters, as is attested by his masterpiece Akhlāq-i Nāsirī (The Nasirean Ethics – titled after his first name), from which the following Fragment is taken. He may be deservingly credited as an important pioneer of the science of political economy.