Economicinstitutional

Economic-institutional is an approach in economics and social science that emphasizes how formal institutions (laws, property rights, contracts, regulatory bodies) and informal institutions (customs, norms, networks) shape economic behavior and outcomes. It treats institutions as endogenous elements that influence efficiency, distribution, and growth.

Spanning old institutionalism and the New Institutional Economics, it analyzes how transaction costs, asset specificity, governance structures, and enforcement mechanisms affect market performance, firm design, and policy effectiveness.

Key concepts include property rights, contract enforcement, and transaction costs; path dependence and cultural norms; institutional change and reform; and the design of institutions to reduce costs and information asymmetries.

Methodology combines historical analysis, comparative case studies, and quantitative indicators of institutions, and it informs policy on rule of law, regulation, and governance. It is used to study development, growth, financial stability, and political economy.

Critiques concern measurement challenges, endogeneity, and the risk of overstating institutional determinants relative to technology, natural resources, or economic structure.

See also: institutional economics, new institutional economics, property rights, transaction cost economics.