Scholars across the social sciences have debated whether resource dependence curses or blesses national development prospects, with a growing consensus on mixed outcomes and the centrality of institutions. Mainstream literature, however, falls short in depicting what the resource curse entails: the claim that “institutions matter” usually has a narrow meaning that largely overlooks the significance of place. A review of the paved road in research reveals a need to critically integrate approaches to studying the curse, as well as more insightful research on which institutions matter, how, and where. Expounding six governance challenges and thirteen development traps, I set out a simple yet crucial lesson: resource-based development presents both blessings and curses for any given resource-rich country in any given time period, and institutions are likely to be part of the explanation. I sketch how a “context matters” framework could guide future research, with illustrations from the Latin American experience.

Hodgson's (2015) critique of extra-legal ‘property rights’ – in this case, so-called ‘economic property rights’ – is right on target. This Comment contributes two further points to his critique. First, the notion of ‘economic property rights’ is based on what Gilbert Ryle (1949) referred to as a ‘category mistake’, conflating physical possession, which is a brute fact about the world, with the right or entitlement to possession, which is a social or institutional fact that cannot exist in the absence of some social contract, convention, covenant, or agreement. The very notion of a non-institutional ‘right’ is oxymoronic. Second, the fact that property is an institutional fact does not mean it must exist with the structure of a ‘state’ (as Bentham suggested). Rather, institutions like ‘property rights’ only require some community, however large or small, operating with what Searle (1995; 2005) calls collective intentionality and collective acceptance, according to shared ‘rules of recognition’ (Hart, 1997).

Laying the foundations of property rights economics stands out among Ronald Coase's many seminal contributions. This approach had an impact on a number of fields in economics in, particularly, the 1960s and 1970s. The modern body of property rights economics mainly originates in the work Oliver Hart and is quite different in style, scope, and implications from the original property rights economics of Coase, Demsetz, Alchian, Cheung, Umbeck, Barzel, etc. Based on our earlier work on the subject (Foss and Foss, 2001), we argue that the change from Mark I to Mark II property rights economics led to a substantial narrowing of the scope of property rights economics, somewhat akin to a Kuhnian loss of content. In particular, Mark II property rights economics make strong assumptions concerning the definition and enforcement of ownership rights made which lead to many real life institutions and governance arrangements being excluded from consideration, and a much more narrow focus than that of the rich institutional research program initiated by Coase and his followers.

What do regulations in the developing world tell us about the internet economy? In this paper, we argue that the ways in which developing nation states adjust to and legislate the internet depends upon whether they possess a national planning strategy for international data traffic. Focusing our attention on the global trade of intangible goods in Iran, we aim to demonstrate that digital protectionism causes, to varying degrees, suppression, censorship, and the violation of freedom of speech and other civil rights on the internet. Our results show that digital protectionism generated an emergence of domestic start-ups, with companies, such as Facenema and Soroush, operating in the Iranian market in the absence of global rivals such as Facebook and WhatsApp. Yet, digital protectionism and sanction-induced barriers have triggered social problems, besides the emergence of parastatals, securing the economy to an inefficient social and economic path towards digital development.

Nobel Laureate in Economic Sciences Elinor Ostrom's authoritative book Governing the Commons, published in 1990, and almost every other text she has published on the subject of the commons, strongly criticized Garrett Hardin's much-cited 1968 Science article “The Tragedy of the Commons.” Hardin's “tragedy” refers metaphorically to the eventual destruction of a commons as a result of collective overuse. Hardin claimed that statist solutions and privatization provisions are the only two policy means for addressing the tragedy. Ostrom explored user self-governance as a third alternative to avert the tragedy. Ostrom's exploration and her critical stance, however, have caused the misperception of her work as anti-Hardin, anti-tragedy, or more specifically, anti-statist and anti-privatization. This paper argues that despite Ostrom's clear criticism of Hardin's claim and her regard for user self-governance or community-based management, her work was not anti-statist or anti-privatization.

Citizens' tax compliance should not only respond to the quality of formal institutions, but might also be culturally driven. We contribute to this literature by investigating whether tax morale, an individual's intrinsic non-pecuniary motivation to comply with taxes, is associated with the cultural values (following Hofstede's typology) held by this individual. The analysis exploits four waves of the European Values Survey (1981–2010) across 48 countries. The cultural dimensions are constructed through a polychoric principal component analysis on a set of relevant survey items consistent with Hofstede's definitions. Ordered logit estimations suggest that although values of individualism and femininity are associated with higher individual's tax morale, power distance and uncertainty avoidance are associated with lower tax morale. These results remain consistent as we increase the level of granularity of our investigation through within-region analyses and, subsequently, within-cohort analyses. We argue that these results inevitably enrich the emerging debate about cultural values and citizens' compliance with formal institutions. They also indicate that societal culture as well as individual values should be considered when designing policies aiming to improve tax compliance.

Copyright laws traditionally attempt to incentivize expression and minimize free rider problems through legal restrictions, at the expense of closing off access to cultural history. However, entrepreneurial changes to institutions and the creation of alternative governance structures can allow for spaces that facilitate expression without resorting to the copyright approach. Wikipedia, the free online encyclopedia, stands as a highly visible example of such institutional entrepreneurship, leveraging copyright law against its intended purpose. This paper uses the Bloomington School's IAD framework to explain the success of Wikipedia's alternative model of managing a common resource of free encyclopedia articles, and suggests a roadmap for understanding the role of institutional entrepreneurship in crafting alternative governance structures to foster expression.

This paper advances and defends the proposition that the basis for the evolution of institutions is the evolution and competition of ideas in the public sphere. This is based on a deeper proposition that institutions are ideas and ideas become institutions. We draw on the ‘Brisbane School’ of evolutionary/institutional economics and of behavioural/psychological economics to investigate the microdynamics of the competition of ideas in the public sphere, which has been studied at a macroscopic level by Isabel Almudi, Francisco Fatas-Villafranca and Jason Potts. The theory we develop gives us a new vision of institutional evolution as emerging from the microdynamics of the evolution and competition of ideas in the public sphere, and a new foundation for institutional theory. It gives us a new vision of the microdynamics of institutional evolution, the evolutionary fitness of ideas for competition in the public sphere and the likely path of institutional evolution.

In his seminal 1921 book, Risk, Uncertainty, and Profit, Frank Knight distinguished uncertainty and risk. This paper applies Knight's concept of uncertainty to knowledge generated in incumbent organizations to explain the inherent difficulty in assessing potential innovations along with the key role played by knowledge spillover entrepreneurship as a conduit for transforming new knowledge created by an incumbent organization but ultimately commercialized through the creation of a new firm and innovation. Knowledge is inherently uncertain and constitutes what is characterized as the knowledge filter impeding innovative activity in the context of incumbent firms and organizations. The organizational and institutional context and market uncertainty can either facilitate or impede the spillover of knowledge from the firm where it was created to the entrepreneurial startup where it is transformed into innovation. The empirical evidence based on a large, unbalanced panel of 9,126 UK firms constructed from six consecutive waves of a community innovation survey and annual business registry survey during 2002–2014. Implications for managers, scholars, and policymakers are provided.

A main instrument for better understanding the formation of institutions, and explaining the differences in their long-run development between periods and societies, would be to use history as a laboratory, allowing us to test the hypotheses developed in the social sciences. This paper discusses the study by Douglas Allen, The Institutional Revolution, in that context, in order to identify some of the pitfalls in the current attempts by economists to use historical analysis. Next, the paper places his English case into a comparative perspective, helped by the recent insights gained by economic and social history, to see how these pitfalls can be avoided. Based on this, I argue for comparisons at the regional, national and global levels, and for a multidimensional view which includes social contextualization, combined with an open eye for discontinuity in long-run patterns, in order to avoid one-dimensional and teleological approaches to institutional change.

This paper develops an account of the normative basis of priority setting in health care as combining the values which a given society holds for the common good of its members, with the universal provided by a principle of common humanity. We discuss national differences in health basket in Europe and argue that health care decision-making in complex social and moral frameworks is best thought of as anchored in such a principle by drawing on the philosophy of need. We show that health care needs are ethically ‘thick’ needs whose psychological and social construction can best be understood in terms of David Wiggins's notion of vital need: a person's need is vital when failure to meet it leads to their harm and suffering. The moral dimension of priority setting which operates across different societies’ health care systems is located in the demands both of and on any society to avoid harm to its members.

I use matched county pairs on either side of US state borders to investigate the causal effects of the Economic Freedom of North America index (EFNA) on local outcomes. This method is similar to Dube et al. (2010). I construct a panel of county pairs running from 1981–2012 and four measures of outcomes, logged real incomes, logged real per capita incomes, employment, and logged real wages, employing single year and five year differences-in-differences. I find small, but precisely estimated, effects on incomes but mixed effects on wages and employment. All regressions show low R 2. This supports the hypothesis that state-level economic freedom improves capital income or that it attracts capital income across state borders.

The exploitation of radio-electric spectrum bands for wireless transmission purposes has some features of the commons: it is subject to congestion and conflict without rules governing its use. The Coasean approach is to assign private property rights to overcome the tragedy of the spectrum commons. The process of assigning these rights is still centralized, with governments assigning property rights through agencies such as the Federal Communications Commission and National Telecommunications and Information Administration in the USA. We consider the possibility of self-governance of the spectrum. We use insights from the study of common pool resources governance to analyze the emergence of property rights to spectrum in a ‘government-less’ environment in which norms, rules, and enforcement mechanisms are solely the product of the repeated interactions among participants in the network. Our case study considers the spectrum-sharing arrangement in the 1,695–1,710 MHz band. Using agent-based modeling (ABM), we show that self-governance of the spectrum can work and under what conditions it is likely to improve the efficiency of the allocation of property rights.

Entrepreneurial action takes place in a context of Knightian uncertainty. In order to overcome this uncertainty, entrepreneurs engage in a process of judgment resulting in a decision about the course of action. Institutions arise mainly to reduce economic friction by providing structure to human interaction and thus reducing uncertainty. However, institutions may also introduce further uncertainty and thus disrupt the judgment process preceding entrepreneurial action. The present paper builds upon recent efforts to integrate the concepts of uncertainty and institutions within the entrepreneurial context. Drawing on Frank H. Knight's seminal insight, the judgment-based view of entrepreneurship, and relevant concepts of entrepreneurial outcomes, the main contribution of the paper lies in the development of a model offering a coherent description of the way institutions affect uncertainty and the entrepreneurial process.

We test the effect of institutional quality on capital structure in the microfinance setting. In doing this, we rely on data from 532 microfinance institutions (MFIs) located in 73 countries dotted across the six microfinance regions in the world. We observe that institutional quality exhibits a robust negative and statistically significant relationship with capital structure in both the short and long run, implying that MFIs in countries with a better institutional environment are less likely to utilize more debt. Our moderation analysis furnishes us with evidence that the presence of women on the board of an MFI significantly moderates the relationship between institutional quality and its capital structure. We show that in the presence of more female representation on the boards of MFIs, the tendency of MFIs using less debt is higher.

The literature on the determinants of cross-country variation in financial system development identifies historical institutional factors, mostly rooted in colonial effects, as key causes. Using a sample of 39 African former European colonies for 2006–11, this paper investigates the extent to which the historical institutional determinants identified by legal origins, disease endowment, religion-based and ethnic fractionalisation theories explain current differences in financial system development across Africa. While most existing research focuses only on one financial system development dimension, namely financial system depth, this article considers also financial system access. The results do not support any of the above theories when depth measures are used, while three of them (legal origins, disease endowment and ethnic fractionalisation theories) are validated when using access measures. This suggests that in Africa financial system depth and access do not have common historical institutional determinants, pointing to the need for greater fine tuning of prevalent theories and empirical measures.

The decline of agriculture in Taiwan has adversely affected the incentives of farmers and the government to engage in irrigation management. Despite that, Taiwan's irrigation systems have shown a high degree of robustness. This study seeks to understand how institutions have contributed to the robustness of Taiwanese irrigation. Conceptualizing an irrigation system as a social-ecological system (SES), this study examines the development and design of Taiwanese irrigation institutions, and how these institutions have enabled farmers and irrigation managers to cope with the dynamics in the SES, and hence contributed to the system's robustness.

The study has found that the robust systems are built upon institutions that allow effective coordination of the activities of a multitude of farmers, enhance the development and sustenance of a repertoire of ideas, and nest the problem-solving efforts of various scopes and scales in a complementary manner. The institutions enable individuals and organizations at different levels to engage in continuous learning and adaptation that, in turn, facilitates the systems' adaptation to the changing environment.

Ex-ante impact assessment of agricultural, environmental, and rural policies has become an integral part of political decision-making processes in the European Union. While a variety of agri-environmental modelling tools exists, ex-ante policy assessment tools capturing the institutional dimension are rare and need to be improved. In this paper, we introduce a standardized procedure for ex-ante modelling institutional aspects for policy implementation: the ‘Procedure for Institutional Compatibility Assessment’ (PICA). PICA has been designed as an explorative and flexible, yet formalized methodology that enables policy-makers to identify, at an early stage, potential institutional incompatibilities. After relating PICA to relevant approaches for policy assessment, we elaborate on its four distinct steps, use a core element of the EU Nitrate Directive to illustrate its function, and then provide model validation by means of a test case.

Roughly 50 years ago, the eminent German philosopher and social scientist Hans Albert presented a critique of ‘Model-Platonism’ in economics to describe essential elements of the ‘neoclassical style of economic reasoning’. Specifically, Albert advanced a series of epistemological arguments to illustrate conceptual shortcomings in neoclassical theory, which may be utilized to immunize the latter against conflicting empirical evidence. This article summarizes Albert's main arguments and illustrates his most important insights by using simple propositional logic. Based on these findings, a clarification and definition of ‘Model-Platonism’ is offered and the applicability of the Model-Platonism-critique to current developments in mainstream economics is assessed. Finally, two possible extensions of Albert's argument, the concepts of oscillating informational content and axiomatic variation, are illustrated with respect to their potential for immunization against critique.

In this article, we look into the question whether the Dutch waterboards can still be considered resilient institutions, effectively adapting to changing circumstances as often described in literature. We argue that current waterboards resemble the CPR management form of old only in name. Their institutional nature has changed considerably, thus providing a challenge to the future of CPR water management in the Netherlands. We examine not only the implications for the institutional performance and future of the waterboard system but also discuss possible ways to regenerate the system. With respect to the latter (changes in), the system of governance and community base character of waterboards are examined.