Economic activity and institutions: Taking stock

Saeed Parto, MERIT, Maastricht , the Netherlands

This paper is an attempt to streamline the multiple meanings of the word “institution”. Related notions discussed include institutional economics, both the “new” and “old” variants, evolutionary economics, institutional change, and institutionalization. Three broad categories of institutions are identified, each comprising a set of “levels”. First there are form-based descriptions primarily concerned with the physical structure and/or appearance of an institution. Second, there are behaviour-based descriptions whose focus is firmly on action or activity. Third, there are context-based descriptions of institutions concerned mainly with the presence/absence of, or interactions among, institutions. Focus in this third group is explicitly on the evolutionary aspects of the institutional context. Using these three broad categories five “types” of institution are defined to provide a loose but necessary structure on which to develop a framework for institutional analysis. The paper concludes with suggestions for cases that could be studied using this framework. Particular attention is paid to the implications of the framework for studying technological “transitions”.

Date: 13 May-00 0000