[this is a free translation by Hugo Pena – to read the original post in Portuguese, click here]
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A few months ago, Hugo Pena and Marcio Valadares published a paper titled “Contemporary legal instances in the institutionalist literature on development” (available in Portuguese only – link here). The work is a contribution by two researchers of the LESG in which they explore the issue of how to intellectually frame relations between law and economics given the present context of fierce contestation of economic “orthodoxy’.
In the past, “old-institutionalist” discussions by Veblen, Commons and Mitchell, and also concerns typical of the “Historical School” and G.F. List, have stirred debates about economic issues and institutions. However, in the first decades of the 20th century the interest in institutions waned among scholars leading the trend towards the formation of the so-called “science” of economics and its typical “neo-classical” orientation. The set of notions about economic matters presented by the “neo-classical” approach became hegemonic both in the academic and professionals spheres, stemming from a process that evolved steadily since Alfred Marshall founded the school of the “Cambridge Neo-Classicals”.
Curiously enough, since the 1950s and 1960s, the focus on “institutions”, historically understood, gained ground in economic studies, though initially relying heavily on a combination of neo-classical price theory with statistics and econometrics, as proposed by Cliometrics. It was from this point onwards that the contrast between the “old” and the “new” institutionalisms became relevant in the study of economic issues. Moreover, “new” institutionalism itself was later split in two perspectives: one being more historical in character (a field that was largely developed – and became dominated – by the works of D. North and his collaborators); another, which has developed its research around the notion of “transaction costs” (and here the works of O. Williamson, who has proposed to overcome what he sees as limitations of R. Coase’s approach, have been used to frame much of the debate).
Recently, many other authors, including E. Reinert, Ha-Joon Chang and D. Acemoglu, out of a variety of influences, have also brought the concern with institutions to the center of debates about economic issues. To these developments may be added ideas of political scientists working on the boundary between their discipline and economics, while adopting diverse assumptions.
This is certainly the larger background of the discussions, analyses and interpretations offered by
Hugo and Marcio in their paper. The abstract of the paper is the following:
The paper focuses certain contemporary legal instances in the development debate and aims at situating these within the scope of two streams of the institutionalist literature, namely those of institutional environments, on the one hand, and institutional arrangements, on the other hand. The text begins by distinguishing market and institutional approaches to development. Next, it describes the main contours of the institutional environments approach (flowing from Douglass North’s ideas) and of the institutional arrangements approach (as represented by contributions by Ha-Joon Chang and Peter Evans). Following, the paper proceeds to outline aspects of contemporary legal and institutionalist approaches such as Law and Economics, New Law and Development and Legal Analysis of Economic Policy. Given that development is a many-sided issue, the contribution intended in this paper is that of establishing links among debates that occur in different literature areas and, particular, putting in touch economic and legal perspectives that assign institutions a role in development.
The paper by Hugo and Marcio will certainly be of interest to other members of LESG, as well as to those who take on the challenge of coming to grips with old relations (or the lack thereof) – while also being concerned with the creation of new ones – between the law as an institutionalist endeavor and the economy, especially the contemporary market economy.
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Connected post: Dissertation on ‘Law and Development’… – published on Apr 16, 2013