This paper argues that technological advance is a necessary condition for sustained economic growth. Technologies and institutions co-evolve in a system of mutual causation. Although some institutions inhibit growth while others encourage it, no single institution is either necessary or sufficient to produce sustained growth. However, some non-unique bundle of encouraging institutions is necessary. Sustained growth began with the Industrial Revolutions that did not just ‘fall out of the blue’ but were instead the culmination of three trajectories of technological advance in steam power, electric power, and the mechanization of textile manufacturing. These stretched over several centuries. Growth then became sustained when the West ‘invented how to invent’. A necessary condition for the Industrial Revolutions was Western science whose roots lie as far back as the scholastic philosophers and the medieval universities. Its absence elsewhere is a sufficient reason why no other place developed its own indigenous industrial revolution.

We examine the origin and methodology of a ‘New New Institutional Economics’ (NNIE) – an emerging research agenda distinguished by its attempt to account for the role of institutions in complex socio-economic change by formally modeling institutions as the background conditions to parameterized cost–benefit calculations. The NNIE expands the application of economic modeling tools to new areas of inquiry, models institutional outcomes with parsimony and mathematical rigor, and introduces political and economic power, thereby allowing for consideration of institutional change that is not Pareto improving. Using a four-part analytical framework, we find that the explanatory power of NNIE analysis derives not from its formal models, but from a more vague, nuanced, and narrative version of the formal models, which we call ‘Quasi-Models’. We find that the NNIE's formal models are too parsimonious to meaningfully illuminate the complex institutions they ostensibly represent.

This paper aims to contribute to a better understanding of cooperation in productive ventures, conceived of as collective action endeavours that require cooperation rather than mere coordination. It is argued that cooperative behaviour is grounded on three kinds of ‘common goods’, defined as goods that are shared and recognized as beneficial by the workers. These comprise common goals, relational satisfaction, and moral norms and values. The commonly held goods are associated with motives and behavioural rules which constitute both the reasons for cooperating and the means through which the dilemmatic nature of cooperation is overcome. It is further argued that the binding character of these rules is closely linked to humans’ ability and opportunity to communicate. Normative guidelines relative to management practices and directions for future research are also derived.

In Douglass C. North's works on institutional change, his focus shifted from formal institutions and highly rational actors to the links between culture, cognition, and the evolution of institutions. This has led to a corresponding shift in his basic explanation of institutional change: In his earlier works, institutional change is mainly caused by actions of highly rational utility-maximizing political actors. In his later works, the evolution of a society's institutions is above all a function of changes in the dominant belief system. The paper tries to contribute to the obvious task of bringing these two explanations of institutional change together. My synthetic approach rests basically on a Northian framework supplemented with three further elements: firstly, with the idea of the transfer of institutions; secondly, with the concept of functional differentiation; and, thirdly, and decisively, with an understanding of culture as a toolkit, leaving room for interest, choice, and strategic action.

This paper offers a critique of the ‘ontology of evolutionary realism’ proposed in Kurt Dopfer and Jason Potts’ recent General Theory of Economic Evolution, concentrating particularly on their treatment of social rules.

One hundred years ago, Thorstein Veblen (1909b) published what is one of his most important journal articles. In ‘The Limitations of Marginal Utility’, he not only developed his critique of neoclassical economics, but also expanded his own methodological outlook.