 |
Module 2, 2000/01 Professor: Judith Shapiro Syllabus in brief: Economists usualy define institutions as the formal and informal “rules of the game”. In ordinary language, institutions are thought of as the organizational structures and arrangements, for which institutions provide the framework. This course analyzes both. Particular attention is paid to problems of institutional change in the transition to a market-based economy. These problems have, in fact, been one powerful factor in the increasing attention paid by economists to institutions. Procedures: Each stream will meet twice a week. The meetings combine lectures with some class discussion. 70% of the mark is based on the final examination. Students write two essays, each worth 15 per cent. Guidelines and topics will be explained. The first essay must be submitted by Monday, 27 November, that is at. the start of week 5. The second essay is due on Friday, 15 December. There will be an optional mid-module exam. This will not receive any credit, but will be marked promptly for students who want this feedback. In addition to the usual office hours, there can also be optional extended consultations in small groups, to discuss a set question for which students prepare. There are no sections as such. The selection of reading which should be done before the lecture is not normally extensive. There is, however, a fairly substantial set of “other reading.” The entire list of available materials is in this package. For each lecture, items which are particularly relevant are listed in abbreviated form. If you do the sums, you will see that it is not realistically proposed that you go through it all at. this time period. One of the skills you will improve during the course is greater selectivity in reading. The rest of this handout is organized this way.
A separate handout gives more detailed notes on preparation for discussion in the first four meetings, including a short reading for the second meeting. I. A more concrete addition to the short description of the syllabus Specific topics include: case studies of the development of banking institutions in reforming Vietnam, and in Russia during the Soviet period; problems of change and corruption in key market institutions in Russia., often using a number of studies by NES-associated researchers. of capital markets and welfare regimes vary markedly between different capitalist models, and how this might be related to late industrialization and/or trade openness. are said to differ in different capitalist models, and at the recent development of specific markets in Russia. We will also look at a select group of social, cognitive and. political topics, examining, for example, the relationship of values to institutions, and asking to what degree we should consider values endogenous. Then we will apply this somewhat item on the research agenda, briefly, to the implications of this for drug prohibition, and for “family values” and gender differences In the case studies, we want to learn how present or past institutions actually functioned, and how they changed == or failed to change -- through time. Another aspect of the course, the basic introduction to institutional economics, looks, for example, at how a firm functions, and the institutional answer to why it exists as it does. This answer has long been to stress the importance of transaction costs, and we will also look at these costs in other situations. This stress on transactions costs has long been a feature of the study of institutions in a market economy. There are other, parallel, concepts which have now become more central to modern microeconomics: the best examples are problems of information and uncertainty. They are covered well in Nicholson, for example, used in Micro, so we will not go over the same ground. A now-classic argument in the field is about the “Tragedy of the Commons”. In addition to studying the original argument, we will examine some recent institutional case studies which have proposed happier endings, supportive of some game-theoretic solutions. How, in short, can institutions be changed, particularly when there is so much endogeneity?
Week, day = w.d For example, Week 1, meeting 2 is 11.2 DUE DATES are in Part B A. Topics
B. Readings in summary form. DUE DATES
Each item is also listed in short form, just above, the appropriate place on the schedule. Review remarks above and below about the highly selective nature of your reading. Armen Alchian and William R. Allen, Exchange and Production: Theory in Use or University Economics, 3 editions. 1957 – 1969. {Large number of copies in library} Annelise Anderson, “The Red Mafia: A Legacy of Communism”, which can be downloaded from the OECD website on corruption in transition, with many other materials. (http://www.oecd.org/daf/nocorruptionweb/ceebibhtm# Arthur Z. Arnold, Banks, Credit and Money in Soviet Russia, Columbia University Press, New York, 1937, especially selections from Summary and Conclusions and Chapter XI, “The Evolution of a System of Specialized Banks”. Kenneth Arrow, “Some ordinalist-utilitarian notes on Rawls’ Theory of Justice”, pp. 270-283 in Baker and Elliott (see below). Originally Journal of Philosophy, May 1973. Samuel Baker and Catherine Eliott, Readings in Public Sector Economics, D.C. Heath, 1990, especially selections throughout this list. Avner Ben-Ner and Louis Putterman, (editors), Economics, Values and Organization CUP 1998. The editors long overview is the best single selection to choose, “Values and institutions in economic analysis”. Samuel Bowles, “Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions”, Journal of Economic Literature, March 1998, pp. 75-111. Serguey Braguinsky and Grigory Yavlinski, Incentives and Institutions: The Transition to a Market Economy in Russia, 2000, selections for discussion. Judith Chubb, “The Mafia, the market and the state in Italy and Russia”, Journal of Modern Italian Studies, 1996 Simon Clarke, The Russian Enterprise in Transition: Case Studies, Edward Elgar Publishers, Cheltenham UK. Management and Industry in Russia Series, S. Clarke, “The Enterprise in the Era of Transition”, pp. 1-59, select in V. Kabalina, G. Mounosova and V. Vedeneeva, “Lenkon: Capitalism and Scientology, and Samara Research Group, “Two Military -Industrial Giants”. Ronald Coase, “The Problem of Social Cost” is selection 9 in Baker and Elliott. Coase’ classic on the firm (1937) is taken up by Alchian and Allen in Chapter 15, and Eggertsson, Chapter 6. David Coates, Models of Capitalism, 2000. Paul Dalziel, “On the Evolution of Money and its Implications for Price Stability”, Journal of Economic Surveys Volume 14, No 4. EERC conference report, “Institutional development and economic growth in Russia” proceedings of December 1999. (inter alia, Guriev and Ickes, Ofer). Nancy Folbre (see below, under World Bank) Thráinn Eggertsson, Economic Behavior and Institutions, 1990, Chapter.1, sections 1-13, G[p and Chapter 6, The contractual nature of the firm, pp. 157-185. Maxwell Fry, Money Interest and Banking in Economic Development, 2nd edition, 1995, Section III, Microeconomic and institutional aspects of financial development, pp. 293-372. Timothy Frye, Brokers and Bureaucrats, 2000. (See also T. Frye and E. Zhuravskaya, “Rackets, regulation, and the rule of law”, Journal of Law, Economics and Organization, Vol 16, No. 2, pp. 478/502./ Erik G. Furborts and Rudolf Richter, Institutions and Economic Theory, The University of Michigan Press, Ann Arbor, 1997, Introductory Observations, starting with “The Strange World of Costless Transactions” and 1.13 which is a short history of institutionalism. Garitt Hardin, “The Tragedy of the Commons”, in Kuenne, 2000b, pp. 151-162, originally in Science (1968), also in Baker and Elliott, pp. 111-123. Geoffrey Hodgson, “The Approach of Institutional Economics”, Journal of Economic Literature, Vol. XXXVI (March1998), pp. 166-192. Elizabeth Hoffman and Matthew L. Spitzer, “Experimental Tests of the Coase Theorem with Large Bargaining Groups”, pp. 145-164 in Baker and Elliott (reference above). It was not Coase himself, of course, who coined the phrase. Mark Blaug argues in Economic Theory in Retrospect that it was not only George Stigler who first used the term, but Stigler who first saw the significance of the 1960 Coase article, which is arguably the start of new institutionalism. Journal of Economic Perspectives, Winter 1995, Symposium on the Economics of Voting, concluding with summary by Amartya Sen, “How to Judge Voting Schemes” pp 91-8. For a swift introduction to the broader background on the “Arrow impossibility theorem”, you can also read Alan Feldman, “Manipulating Voting Procedures”, in Baker and Eliott (reference above), pp. 316-330. Robert Kuenne (ed), Readings in Applied Microeconomic Theory: Market Forces and Solutions, Blackwell Publishers, 2000a. (individual items listed throughout list( Robert Kuenne (ed), Readings in Social Welfare: Theory and Policy, Blackwell Publishers, 2000b. (individual items listed) Alena Ledeneva, Russia’s Economy of Favours, CUP 1998. Michael McFaul, “Uncertainty, Path Dependency and Institututional Design During Transitions” Cases from Russia” Harvard PONARS Working Paper No. 7, May 1998 Jeffrey Miron and Jeffrey Zweibel, “The Economic Case Against Drug Prohibition” in Kuenne, 200b, pp. 225-241, originally in Journal of Economic Perspectives, 1995. Douglass C. North, Institutions, Institutional Change, and Economic Performance, 1990 Douglass C. North, “Where have we been and where are we going?” in Ben-Ner and Putterman, 1998 (reference above) chapter 19. Jeffrey Nugent, “Institutions, markets and development outcomes” in World Bank, 1998, edited bz R. Piccioto anf E. Weisner, Evaluation and development: the institutional dimension.
Mancur Olson, “The Logic” in Baker and Elliott (reference above), pp. 193/207, originally in The Rise and Decline of Nations, 1982. Victor Polterovich, “Faktory Korruptsii”, Ekonomika i Matematicheskiye Metody, 34 (3) 1998). R.A. Radford, “The Economic Organization of a P.O.W. Camp”in Kuenne, 2000a. pp.394-404. This was once a classic to introduce the basics of neoclassical micro. Consider it in a fresh light, for the institutional questions it poses. John Rawls, “Some Reasons for the Maximin Criterion”, pp. 284-290 in Baker and Elliott. , originally AER May 1974. Dani Rodrik, “What are high quality institutions and how do you get them?” website. Lisa Roman, Institutions in Transition: Vietnamese State Bank Reforms, 1998. Kurt Schuler, “Should Developing Countries have central banks: Currency quality in 155 countries”, IEA Research Monograph 52, 1995 Herbert Simon, “Theories of Decision-Making in Economics and Behavioral Science” in Kuenne, 2000a, pp. 17-42, originally AER 1959. Joseph Stiglitz, Whither Socialism?, MIT 1995, chapter 12, Reform of Capital Markets also in C. Clague.and G. Rausser (eds), The Emergence of Market Economies in Eastern Europe, 1992. Vito Tanzi ,Corruption Around the World - Causes, Consequences, Scope, and Cures, IMF Working Paper WP/98/63, www.imf.org Cecilia
Ugaz, “A Public Goods Approach to Regulation”, WIDER Mimeo, Helsinki,
2000. World Bank, Proceedings of the Annual World Bank Conference on Development Economics (ABCDE), 1995, E. Ostrom, “Incentives, rules of the game and development” and comments by Klitgaard, Levi and floor discussion, pp. 207-248. In this volume see also N. Folbre, “Engendering Economics: New Perspectives on Women, Work and Demographic Change”, and comments by Berquô, Haddad.and floor discussion, pages 154-166.. See separate set of handouts for 1.2, 1.2, 2.2 |
|
Economics
of Transition Elements
of the Economics History
of Economic
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
