Orthodox economic theorising on ancient societies emphasises the absence of market institutions, in contrast to advanced contemporary economies. However, this may downplay the influence of non-economic interests in the generation of wealth. Consequently, this paper examines an ancient civilisation identified as economically successful namely, the Mauryan Empire (322 to 85 BCE) centred on the Indo-Gangetic plains. Drawing on translations of books collectively known as the Arthasastra (lit. the science of wealth) as well as contemporaneous Greek and Roman texts, this paper examines the role of institutions in generating wealth within societal norms of income distribution and the preservation of social order. Given the importance of trade to this society, comparisons are made with medieval European institutions in terms of market coordination and the maintenance of generalised trust in trading markets. As a consequence, the role of institutions in addressing social and economic uncertainty affecting an ancient society is highlighted.

While confidence in the business sector is crucial for well-functioning markets, there is surprisingly little empirical work on its sources. Available research recognizes generalized social trust and macroeconomic performance (especially unemployment and economic growth) as major forces explaining confidence in institutions and organizations in general. By assuming that confidence in companies hinges on rules, formal procedures, and practices that shape how organizations function, economic regulation is frequently advocated to foster confidence in companies, not least as it is supposed to reduce the scope for opportunistic behavior. Based on individual-level data from World Values Survey/European Values studies and economic regulation data from the Economic Freedom of the World project we investigate statistical associations of confidence in major companies with generalized social trust and macroeconomic performance as well as the intensity and quality of business regulation. From an economic policy perspective our findings suggest that confidence in the business sector can be facilitated by an implicit guarantee from governments of fair and impartial treatment.

The literature on collective action has poorly addressed processes of incremental institutional changes within organizations. This paper helps fill this gap by shedding light on how the community-based management of an organic label has changed following its formal recognition as a ‘participatory guarantee system’ (PGS). Ostrom and Basurto's (2011) analytical tool is useful to describe the changes in collective rules to address collective action problems that take place in standard-setting and labeling activities. Using original data collected from the Ecovida Agroecology Network – the oldest and largest PGS in Brazil –, we study the multi-scale changes in governance rules from the 1970s until today. We pay particular attention to the links between the institutional consolidation of PGS, its recognition by public authorities, and its adaptation to legal rules. We detail analytical operators indicating whether the introduction of the PGS rules at the national level was bottom-up or top-down. Our findings emphasize how local communities have been able to both adapt their governance system in response to the official arrangements concerning organic regulations, and influence national public arenas where these arrangements are defined. This form of co-management has been accompanied by a significant increase in the number of PGS-certified farmers.

We analyse how institutional complementarities between employee representation laws and dismissal restrictions influence aggregate innovation outcomes. We argue that greater employee voice, due to improved employee representation legislations, may spur innovative effort by employees only when shareholders cannot renegotiate ex-ante agreements with workers over revenue sharing, by threatening dismissal. We perform a panel regression analysis, exploiting country-sector panel data over the 1977–2005 period, and find that stronger employee representation laws in the presence of stricter firing restrictions are in fact associated with higher patenting activity. Consistently with our theoretical argument, the magnitude of this empirical relationship is seen to be relatively larger in those sectors where the human capital contribution to production is higher. Implications for the analysis of economic institutions and for legal policy making are proposed.

The discussion about the role of institutions in economic development should revolve around the relative performance of institutions and not around the alleged superiority of one system over the other.

Professor Hodgson in his review of my A Culture of Growth (Princeton University Press, 2016) raises a number of important issues. One of them is the usefulness of the concept of a ‘market for ideas’ as an analytical tool in discussing the way cultural change affects economic change. Even though there is no price mechanism that clears the market, many basic components of the economic analysis of markets carry through and enriched by evolutionary concepts. A second question is the importance of cultural entrepreneurs, who play an important role in my book. It should be stressed that such ‘Vital Few’ were rarely indispensable, yet their influence on subsequent events may have imparted a direction on events and accelerated them. In any event, the success of such entrepreneurs was an indication of an intellectual environment sufficiently open to new ideas to be consistent with major new ideas such as the possibility and desirability of sustained economic progress.

The administration of the forensic science process falls into the hands of supervisors, local administrators, and prosecution attorneys and police agencies. In the current structure, the police and prosecution are the principal and the forensic scientists the agent. I identify changes that must be made in that relationship to eliminate biases and to determine the major obstacles that stand in the way of creating the necessary changes. I focus on the ‘middle managers’ – the supervisors and laboratory directors – as the cultural key masters. I recommend: mechanism design principles to enable laboratories to report to a board of directors, rather than the prosecutor and police; for the development of compensation plans for middle managers to build a culture of learning based on error tolerance rather than error punishment; and for the use of intrinsic and extrinsic motivations to facilitate the identity changes of cultural key masters.

Judge Posner (2010) offers a substantial agenda for organization economics. He advises us on how organization economics can shed substantial light on some of the most pressing social problems of the day. I comment on two of the areas he selects for discussion and offer some comments on the relationship of organization economics to new institutional economics. Judge Posner surely is right to argue that organization economics can help us understand the failures of corporate governance in regulating executive pay. Moreover, with additional and more institutionally nuanced theorizing, organizational economics should further our understanding of the work of judiciaries in the civilian and common law traditions. Judge Posner tells us that organization economics and new institutional economics are related fields. I make a plea for economic holism. Organizations are institutions. While getting clear on disciplinary boundaries and the differing kinds and concepts of institutions is important, logical differences in concepts like ‘organization’ and ‘institution’ may be less important than what to emphasize in theory construction and what to test for with those theories. The success of organization economics will be in whether the different emphases produce new insights. Judge Posner is right to tell us that new insights are coming and will continue to come from organization economics. This is true however we conceptualize the field as a school of thought.

Intrapreneurs, entrepreneurial employees, constitute an important force behind innovations in the economy. Yet, what factors that promote intrapreneurship at the country level are an underdeveloped research area. This paper provides an important contribution regarding the methodological approach and the broad set of potential explanatory factors studied. Based on machine-learning techniques (Least Absolute Shrinkage and Selection Operator (LASSO) and Extreme Bounds Analysis (EBA)), we investigate the influence of over 60 factors capturing institutional, demographic, cultural, and developmental factors. We find that the quality of government measured as impartiality, i.e. that the public institutions treat the citizens in a non-discriminatory fashion and do not favor some groups or individuals, and the level of human capital, measured as the average years of schooling, are the most important factors predicting the level of intrapreneurship across countries. Instrumental variable results support a causal interpretation. The findings emphasize the importance of policy to establish well-functioning and impartial institutions as well as to promote higher education.

In this paper, we take a Public Choice perspective to identify and categorise barriers to efficient public climate adaptation. Specifically, we distinguish three dimensions of public adaptation: extent, structure (form and timing) and organisation (coordination across territorial authorities and policy fields). Within each of these dimensions, we investigate how the self-interest of voters, pressure groups, bureaucrats and politicians may bias adaptation decisions. Thus, we indicate specific barriers to efficient public adaptation. Based on this framework, we illustrate how Germany's response to major flood disasters reflects the incentive structure of concerned stakeholders and their political interaction. The ad hoc character of some public adaptation measures implies a clear bias from the efficient benchmark. In conclusion, we argue that the propositions of Public Choice theory shed some light on how empirical public adaptation processes unfold.

While most scholars emphasize the role of prosocial motivations of contributors in building open online communities, we show that mere users also adhere to their norms of behaviour to some extent. To this end we designed an original experimentation protocol. With the help of the French Wikimédia Foundation, we questioned a large sample (n = 13,000) of Wikipedia users (whether contributors or not). They were invited, after having expressing their feelings about Wikipédia, to play a Dictator Game. A large proportion of respondents, including those who were merely users, chose an equal split (66% of the sample). This surprising result suggests that they have adhered to a social norm of sharing. Investigating the determinants of this result, we prove that an involvement measured by usage (intensity and variety), as well as by attachment to, and time spent, on Wikipedia, is correlated with the choice of the 50/50 split in the dictator game (DG). Furthermore, the method of instrumental variables gives an indication that adherence to the social norm of sharing may be endogenously determined by involvement in the open online community. Our result highlights the importance of interactions with the institutional and technical frameworks of the community.

This paper evaluates the contribution of Risk, Uncertainty, and Profit to the development of economic theory in the 20th century. Our argument in this paper is twofold. First, we contend that this book embodied what had been the common knowledge of early neoclassical economics prior to World War II (WWII). Second, we also argue that embryonic to Knight's account of economics were two divergent approaches to economic thought that emerged after WWII. The first approach, what has come to be known as microeconomics, is characterized by utility maximization under fixed price, income, and institutional parameters that approximate equilibrium. This first approach is distinct from a second approach, referred to as price theory, in which prices are not sufficient statistics, as in microeconomics, but operate as guides to consumption and production decisions under alternative institutional arrangements. This second approach not only represented the continuation of the mainline1 of economic thought from its classical and early neoclassical roots. It also embodies the basis for Knight's understanding of uncertainty, profit and entrepreneurship, as well as its implications for economic organization and social progress.

This comment concurs with Skarbek's paper that much more room should be made for qualitative evidence in economics. However, it raises questions about the modalities through which case studies could carry general lessons when it comes to broad institutional issues. It also suggests the need to extend the set of qualitative evidence beyond case studies and to complement them with formal approaches as well as with quantitative analysis. Persuading economists to open windows to alternative methods is at stake

Economics has changed enormously since Professor Ha-Joon Chang burst onto the scene in the early 1990s. His critiques of mainstream economics are far more applicable to the discipline at that time than they are now. Whatever the shortcomings of the current literature on institutions and development, progress is not being held back by conceptual blinders imposed by economic orthodoxy. Game theory and behavioral economics have enriched the menu of models acceptable in the professional journals. More important, empirical standards have greatly advanced. Behavioral models are being confronted with computerized games and even with in-the-field experiments, especially in poor countries where recruiting experimental subjects is cheaper. The recent literature does not merely undermine traditional assumptions; it offers parsimonious interpretations that help us to understand the economy and the polity better than before.

The purpose of this special topic forum is to call for research on the topic of minds and institutions. I briefly discuss three specific research opportunities: (1) bounded rationality versus mind, (2) many minds and the interfaces of institutions, (3) the affordances of institutions and arbitrage. I then briefly introduce the two special topic forum papers and highlight how they link to the topic of minds and institutions.

We analyze how Costa Rican coffee farmer's behavior in an experimental public good game depends on the institutional structure of the farmers buying point (cooperative vs. privately owned mills), and on the background of their game partners (partners selling to the same type of mill or not). We find that cooperative farmers do not display more public good orientation than private market farmers when playing with partners from the same type of mill. However, though farmers selling to private mills make no difference with respect to the background of partners, farmers selling to cooperatives significantly decrease contributions when paired with non-cooperative members. Finally, we study how self-selection into a mechanism that punishes the lowest contributors effects contributions both inside the group and with partners of the opposite background, and we show that it increases contributions by cooperative farmers interacting with non-cooperative farmers by more than 100%.

Institutions matter for economic growth. Thus, the leaders who help to develop institutions, and their ideas and beliefs, must play a central role in any narrative that seeks to explain such growth. This leads to the appearance of institutional entrepreneurs, who act in a given cultural and political environment. We focus on the problem of state building, where formal institutions designed by leaders must be consistent with a given society's existing informal institutions. We consider an analytical narrative focusing on the Chilean experience in the 19th century. This serves as an interesting quasi-natural experiment on the role of ideas, leaders, and institutions in the problem of economic growth and development.

Markets without Limits defends the claim that there are no inherent limits to markets, in the sense that if something may permissibly be given away or exchanged outside of market or for free, then there is some realistic and plausible way of structuring a market that makes it morally permissible to exchange it for money. This paper reviews the basic strategy of the book, and then responds to criticisms from Geoffrey Hodgson's recent review. Hodgson claims to have identified counterexamples to our main thesis, which we dispute.

In response to climate change, many national governments are shifting their focus from ‘safety’ to ‘spatial-planning’ measures in flood governance. Rather than providing full protection against floods, spatial-planning measures aim to reduce the impacts of floods by encouraging damage mitigation in local-level spatial-planning and building choices. This turn to spatial-planning measures has important implications for how costs and responsibilities are divided in flood governance. This paper examines the role of experts in shaping the distributive aspects of this shift. Using a theoretical framework on institutional change, the role of experts is analyzed in two case studies. The first focuses on the United States, where a turn to spatial-planning measures was made in the 1960s. The second case study looks at this turn Dutch flood governance, which has always been characterized by a strong safety paradigm. The paper draws conclusions about the effects of expert-influence on distributive decision-making underlying institutional changes in both cases.

Since the 1990s, most European countries have adopted detailed corporate governance codes regulating listed companies. Even though the initial codes were designed against the backdrop of a particular jurisdiction, best practice standards have become remarkably similar across legal traditions. This raises the question whether the codes are sufficiently responsive to local conditions, or standard setters are mainly motivated by the concern not to fall behind internationally accepted benchmark standards. The article quantifies central corporate governance provisions and maps their international diffusion. Controlling for differences in legal families and ownership structure, the article shows that the diffusion of best practice standards leads to a statistically significant increase in the likelihood that a foreign standard setter will adopt a broadly similar provision. The findings indicate that codes are often seen as signaling devices, irrespective of whether or not the adopted standards are well aligned with the domestic economic and legal environment.