This contribution commemorates Oliver Williamson, who recently passed away, as one of the founding fathers of Transaction Cost Economics (TCE). It does so by touching on some of the details of his personal life and connecting these with his professional career. The latter was devoted to putting the study of institutions on the economic agenda. Closer scrutiny reveals that three phases may be identified. Williamson first developed an interest in analysing vertical integration. During the second phase, he elaborated this interest in TCE, and during the third, he positioned his contributions within the area of institutional economics. Furthermore, the article considers the various influences of institutional and organizational economists on Williamson. Finally, the article considers the reception, criticism, and further elaborations of Williamson's contributions.

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.

Yoram Barzel was always aware that competition is ubiquitous and takes many forms, and he was among the first to analyze settings where individuals compete on the basis of time, rather than price. This paper applies his insights to study the Oklahoma land rushes, where thousands of individuals raced to establish property rights to land. A simple modification of Barzel's analysis generates a model of rationing by racing, and we test its predictions using new data on the timing and location of over 73,000 homestead claims within the five distinct land rushes and one lottery. We find that increases in land quality or decreases in the cost of racing generate corresponding increases in the equilibrium speed, implying that potential rents are dissipated by investments in speed. The analysis highlights the lasting significance of Barzel's insights regarding non-price competition.

To be effective, an army must contain the extent of desertion among its ranks. This phenomenon rose to particular prominence in Europe during the 18th and 19th centuries, with the appearance of the figure of the “citizen-soldier” on the battlefield. This paper offers the first theoretical treatment of the issue of desertion from an economic perspective. Building on the work of Yoram Barzel on the “economic analysis of property rights,” we develop a “desertion as theft” framework. We then test the empirical implications of the framework against qualitative and quantitative evidence from Napoleonic France.

For two decades, economic agents have been investing in the personal data-driven industry on the assumption that courts, the keepers of the legal systems, would have backed their claims, turning their technological control of personal data into legally protected property rights. Courts' backing has proved only temporary as they are now revising early solutions by constraining collection, use, and trade of personal data to protect the hierarchically superior rights. The theory of ‘legal bubbles’ rationalizes the economics underlying the legal shockwaves affecting the personal data-driven economy. ‘Legal bubbles’ tend to arise when economic agents invest in the economic exploitation of a new resource in a context of uncertainty and ignorance about the legal implications of innovative activities. These legal foundations may eventually turn out to be unstable as a result of courts' ex-post attempt to re-adapt them to the previously ignored implications of unconstrained commodification, with disruptive economic consequences.

Alfred Marshall was elected to the Chair of Political Economy at the University of Cambridge in December 1884. He gave his inaugural lecture on ‘The present position of economics’ on 24 February 1885 (Groenewegen, 1995: ch. 10). An abridged version of this lecture is presented below.

This is the second of two companion papers that discuss accidents caused by robots. In the first paper (Guerra et al., 2021), we presented the novel problems posed by robot accidents, and assessed the related legal approaches and institutional opportunities. In this paper, we build on the previous analysis to consider a novel liability regime, which we refer to as ‘manufacturer residual liability’ rule. This makes operators and victims liable for accidents due to their negligence – hence, incentivizing them to act diligently; and makes manufacturers residually liable for non-negligent accidents – hence, incentivizing them to make optimal investments in R&D for robots' safety. In turn, this rule will bring down the price of safer robots, driving unsafe technology out of the market. Thanks to the percolation effect of residual liability, operators will also be incentivized to adopt optimal activity levels in robots' usage.

This introduction considers the overall character and impact of the work of Elinor Ostrom (1933–2012). Her work is not only inter-disciplinary in character; it also bridges ‘original’ and ‘new’ traditions within institutional economics. Her studies of the governance of common-pool resources inspired multiple lines of enquiry in economics and other social sciences. It also carves out a policy approach that surpasses the market–state dichotomy. This broad impact is evidenced in the seven essays collected and introduced here.

This paper supports the effort by Hindriks and Guala (2014) to integrate the prevailing accounts of institutions. I illustrate with traffic narratives how we can think of their concept of rules-in-equilibrium as evolving from universal elementary forms. These conceptions resonate fully with Smith (1759) who saw rule-following conduct as the basis of human sociality and action.

The major contribution of Oliver Williamson, who was a 2009 Nobel Prize co-Laureate in economics, consists of proposing a heuristic analysis of governance structures, namely, the firm, the market, and what he will later call the ‘hybrid forms’. This cardinal issue in organizational economics has made it possible to propose rigorous arbitration tools for the famous ‘make or buy’ decisions in modern market economies based on asset specificity and quasi-rents. However, Williamson's work goes far beyond these contributions alone. His contribution is based on a multidisciplinary theoretical background in building the science of organization. This is the important but sometimes neglected aspect of Williamson's work that I wish to highlight in this paper in memory of Williamson in regard to three major pieces on atmosphere (and informal organization), private ordering, and industrial pluralism. In doing so, I also propose reconsidering the different stages of Williamson's evolving science of organization from recent neo-institutional works.

This paper is about the mind of the embedded individual in heterodox economics. Beginning from Margaret Archer's analysis of modes of reflexivity and following the respective contributions of Geoff Hodgson and John Davis, the paper seeks to integrate into Archer's approach a place for habitual beliefs and an analysis of the ‘relative autonomy’ of the embedded individual. Archer's identification of modes of reflexivity is endorsed but her avoidance of any dispositional place for habit in the mind is questioned. It is argued that by excluding habits in this way, Archer, unlike Davis, implausibly assumes most individuals have achieved relative autonomy in their group associations. The essay develops an approach to the mind that articulates underlying relationships between habits and internal conversation, potentially enriching Archer's explanation of modes of reflexivity while locating Davis's notion of relative autonomy within that framework. Specific economic implications are then briefly considered.

The development of the American economy was accompanied by significant spatial income inequalities between the northern and southern regions. While many factors contributed to northern industrialization and southern stagnation, an important factor was differences in the region's institutions. In the North, a democratic institution fostered growth whereas in the South, oligarchic institutions favored status quo. To gain insights on the nature and causes of this divergence, this paper examines the development of political and legal institutions in Massachusetts and Virginia, the two leading states in the North and the South.

Antony (Tony) M. Honoré was born in London in 1921 but was brought up in South Africa. He served in the British Army during the Second World War and was severely wounded in the Battle of El Alamein in 1942. After the war, he continued his studies at New College, Oxford, and he has lived and taught in Oxford for well over half a century, holding fellowships at several Oxford colleges. From 1971 to 1988, he was Regius Professor of Civil Law and a Fellow of All Souls College in Oxford. He is internationally known for his work on ownership, legal causation, and Roman law.

That governance within the firm is deliberate, conscious and hierarchical, based on authority is considered almost axiomatic. Chester Barnard is cited as an early theorist of this view. In this short article we review Barnard's original theory of authority, his later work and his private correspondence with F. A. Hayek, Michael Polanyi, Bertrand de Jouvenal and others. We show that Barnard focused in his later thinking less on authority and more on ‘responsibility’ and on the spontaneous nature of coordination within the firm, argued for ‘invisible hand’ explanations of coordination within the firm and compared coordination within the firm to market coordination. We use this information to produce novel insights into the work of Chester Barnard and also to demonstrate that his insights into the inner workings of firms is still not completely understood or reflected in the literature on the firm.

We can all agree that institutions matter, though as to which institutions matter most, and how much any of them matter, the matter is, paraphrasing Douglass North's words at the Nobel podium, unresolved after seven decades of immense effort. We suggest that the obstacle to progress is the paradigm of the New Institutional Economics itself. In this paper, we propose a new theory that is: grounded in institutions as coevolving sources of economic growth rather than as rules constraining growth; and deployed in dynamical systems theory rather than game theory. We show that with our approach some long-standing problems are resolved, in particular, the paradoxical and perplexingly pervasive influence of informal constraints on the long-run character of economies.

The Covid-19 pandemic in 2020 led to extensive new government regulations and lockdown policies that, according to some prominent definitions, severely reduced economic freedom. However, many of these new pandemic-related regulatory restrictions on economic freedom are largely missed by the Economic Freedom of the World Report (EFW). This paper first adjusts the Our World in Data Covid-19 Stringency Index into a measure of lockdown regulatory freedom and then merges it into the EFW index to better measure countries' 2020 cross-sectional relative economic freedom. We find significant differences in the relative ranking of economic freedom between countries once we adjust for lockdown regulatory restrictions.

Posner considers purposeful organisations. Legal persons are fictitious non-mortal species whose evolution has played a major role in economic development. In what sense can they be said to have a purpose? Thanks to several important mutations, the status of legal persons was transferred from public bodies to business corporations. This evolutionary journey is complementary to the Coasian view, which, moving in the opposite direction, explains the firm as a centralization of market transactions. If the corporation emerged also from a process of decentralization of public attributes, some features of public legal persons, are lacking in its business mutation. Also some ways of motivating people are only available to the original species.

Trust is an important component of all successful commercial exchanges. Indeed, there is now a considerable literature on the economic importance of trust as well as the relationship between trust and institutions. Although there is now a sizeable literature on the economic importance of trust, and on the institutions that are associated with higher levels of trust, this literature remains relatively silent on the potential of markets to generate trust and, more specifically, how market actors discover whom to trust and, perhaps more importantly, whom not to trust. In this paper, we build on research by market process theorists that understands the market as a discovery process. We argue that the market is also a discovery process through which market participants acquire knowledge about their trading partners' dispositions, moral priorities, and personalities. Specifically, we argue that the market facilitates the identification of trustworthy and untrustworthy individuals and is, thus, a process for the discovery of whom to trust and whom not to trust. Additionally, we report experimental evidence that suggests that although market participants are trusting of strangers (at least in our experimental setting), they are less trusting of trading partners who have proven to be untrustworthy in past dealings.

The new institutional economics has emphasized the importance of ideology in determining the content and direction of institutional change. Ideology can also determine when interest groups succeed in achieving legislative favor. The case of the regulation of in-kind wages in Britain shows that factors highlighted in mainstream political economy (such as interest group strength and organization, self-interest of legislators, and coalitional partners) were important. However, the interaction between relative price changes and social ideology was also significant in explaining the shape and timing of legislative changes. Changes in relative prices gave labor groups the incentive to seek legal protection from non-monetary wages, but they obtained protection only if they met certain criteria established by the prevailing ideology. Changes to that ideology resulted in further legislative changes granting cash wages to most industrial workers.

Pablo Paniagua and Veeshan Rayamajhee (2021) propose an Ostromian polycentric view on coronavirus disease-2019 (COVID-19) preventative measures co-produced by the state and citizens. I argue that we should also use another Ostromian approach – ‘crafting of institutions.’ Focusing on the crafting of cognitive institutions allows us to understand the co-production of virus containment in all its complexity. Combining the ‘crafting cognitive institutions’ and ‘boosting’ approaches will allow for the creation of institutionally and behaviorally informed anti-COVID policy interventions in line with polycentric pandemic governance.