The New Institutionalism
Political Science 317
Spring 2005
Professor Michael Munger
|
Monday
Office
Hours: Wednesday 1-3, and by appt. |
Click
for Duke Academic Calendar munger@duke.edu office phone:
660-4301 home phone: 844-0154 |
INTRODUCTION:
This course is a survey of recent developments
in transactions cost and collective action theory, especially as these
techniques have been applied to the study of classic questions in political
science. This is not an economics course, though many of the readings in
the first portion of the course derive from the economics literature.
GRADES: Grades derive from the
following...
1. A paper on
a topic to be decided in consultation with the instructors. Possibilities
include an analysis of the strengths and weaknesses of a body of research,
identification of a research program that would advance the state of literature
in some area, or a report on some related supplementary reading that goes
beyond class materials. The due date for the paper is not later than the end
of exams. No incompletes will be awarded, except in documented medical
emergencies. A rough draft is due right after fall
break (no rough draft, no paper; no paper, no grade!), so you should begin
consulting with us soon about topics.Paper:
40% of Grade
2. A final designed
to help you prepare for prelims. This will be a take-home, open
book exam during the exam period. We will pass out a list of ten possible
questions right after fall break. The exam will take place in the
assigned exam room, and you will be asked to write answers in a blue book to
the three questions that will be selected randomly.Final:
40% of Grade
3. Participation in
class discussions of assigned readings. You are expected to come to class
prepared to discuss the readings in depth, and to answer questions posed by the
instructors.Participation: 20% of
Grade
THEMES:
I.
Institutions as exogenously defined
You may find it useful to think of institutions in the context of what is known
as Plott's fundamental equation:
(Preferences)x
(Institutions) = (Outcomes)
In the simplest conception, the causal arrows are going one way, with preferences and institutions both being taken as fixed and exogenous. The “comparative statics” of this approach are then obvious: change preferences, or change institutions, holding the other parameter fixed, and see what happens to outcomes. We will consider at least the possibility of a feedback loop from outcomes to both preferences and institutions, but not that much is known about this phenomenon. As for the nonindependence between the parameters (preferences causing institutions, and institutions forming preferences) we will say more, but frankly it will still seem rather unsatisfactory.
II. Definitions: Just what are
"institutions"?
Douglass North, in his seminal work Institutions, Institutional Change, and
Economic Performance, defined institutions as "the humanly devised
constraints that shape human interaction." We will want to think about
what this leaves out, and what it includes. In particular, North distinguishes
between “institutions” and “organizations.” The latter
he defines as the endogenous, optimizing responses of humans to their
institutional environment.
III. Institutions as endogenous: What are the goals of
institutional choice?
The study of is an invitation to raise questions about the design of
institutions. For example, as The Federalist No. 1 points out, the
American constitution is one of the first systems of government to result from
"reflection and choice" rather than "accident and
force." Normally, the design of institutions is justified in
terms of broad public purposes, such as preserving liberty and avoiding
"the mischiefs of
faction." But other purposes may be disguised by the
language of the general welfare. For example, institutions may be
designed to enhance the power of a particular group of people. In
fact, this was the contention of Charles Beard about the framers, as expressed
in his Economic Interpretation of the Constitution of the United States.
IV. Paradigms.
The field of institutions is in an unusual period of change and growth, and
heightened consciousness of theory. One set of perspectives is sometimes
called the new institutionalism. To some people, such as Kenneth Shepsle, this means an effort to apply economic reasoning
and rational choice models to the analysis of institutions. To
others, such as James March, the new institutionalism is a much more diffuse,
but also highly theoretical and abstract subject. Another set of
perspectives on institutions is called American political
development. This involves sensitivity to historical change, and to
detailed description. Your instructors are not agnostic, but an
attempt will be made to consider a variety of alternatives and present them
fairly. You are encouraged to raise fundamental questions.
V.
Expectations about readings for this course.
You are expected to read all of the books and articles listed on
this syllabus, and do it before the class for which they are assigned.
Most of the reading assignments for this course are in books you are expected
to purchase, on reserve, or are available electronically by clicking on the
appropriate part of the syllabus.
TEXTS:
The following books are on sale at the Book Store:
1. Buchanan, James, and
Gordon Tullock. 1962. The Calculus
of Consent: Logical Foundations of Constitutional Democracy.
2. Coase, Ronald H. 1990. The
Firm, The Market, and The Law.
3.
4. Ensminger, Jean. 1992. Making a Market:
The Institutional Transformation of an African Society.
5. Knight, Jack.
1992. Institutions and Social Conflict.
6. North, Douglass.
1990. Institutions, Institutional Change, and Economic Performance.
7. Zakaria, Fareed. 2000. The Future
of Freedom.
READING SCHEDULE:
1. A.A. Alchian, “Uncertainty, Evolution, and Economic
Theory,” Journal of Political Economy (1950). (Link)
2. A. Denzau
and D. North, "Shared Mental Models: Ideologies and Institutions," Kyklos 47(1) (1994), 3-31 (Link)
3. C. Sartorius,
“The Relevance of the Group for the Evolution of Social Norms and
Values,” Constitutional Political Economy, 13 (2002):149-172. (Link)
4. G. Hodgson, “The
Evolution of Institutions: An Agenda for Future Theoretical Research,” Constitutional
Political Economy, 13 (2002):111-128 (Link)
1. F.
Hayek, “The Use of Knowledge in Society,” American Economic Review,
1945. (Link)
2. R. Heiner, “The Origin of Predictable Behavior,”
American Economic Review, 1983. (Link)
3. G. Mackie,
“Ending Footbinding and Infibulation:
A Convention Account, American Sociological Review, December 1996,
61:999-1017) (Link).
4. D. North, Insitutions, Institutional Change, and Economic
Performance
Week 3 (2/7) Institutions and Organizing Society
1. J. Knight, Institutions and Social Conflict
(1992)
2. J. Landa, “Bioeconomics
of some nonhuman and human societies: new institutional economics approach,” Journal of BioEconomics,
1999. (Link)
3. J. Vromen, “Stone
Age Minds and Group Selection: What Difference Do They Make?” Constitutional
Political Economy, 13 (2002):173-198. (Link)
Week
4 (2/14): Spontaneous Order:
1. R.H. Coase, “The Nature of the Firm,” Economica (1937). (Link)
2. R.A.
Radford, “The Economic Organization of a P.O.W. Camp”, Economica (1945). (Link)
3. A.A. Alchian and H. Demsetz,
“Production, Information Costs, and Economic Organization,” American
Economic Review (1972). (Link)
4. Demsetz, Harold, "Toward a Theory of Property Rights," American Economic Review, (May
1967) (Link)
5. J. Ensminger,
Making a Market: The Institutional Transformation of an African Society.
Weeks
5 & 6 (2/21 and 2/28): Transactions Cost Economics
Reading:
1. R.H. Coase, “The
Problem of Social Cost,” Journal of Law and Economics (1960). (In The
Firm, The Market, and The Law)
2. O. Williamson, “Transactions Cost
Economics: The Governance of Contractual Relations,” Journal of
Law and Economics (1979). (e-reserves)
3.
O. Williamson, “Credible Commitments,” American Economic
Review, 1983. (Link)
4. B.
Klein, Crawford and Alchian, “Vertical
Integration, Appropriable Rents, and the competitive Contracting
Process”, Journal of Law and Economics (1978). (e-reserves)
5. B. Klein K. Leffler, "The Role of Market
Forces in Assuring Contractual Performance," Journal of Political
Economy, August 1981. (Link)
6. G. Akerlof,
“The Market for Lemons: Quality Uncertainty and the Market
Mechanism,” Quarterly Journal of Economics (1970). (Link)
Institutions that are not spontaneous:
Reading:
1.J. Buchanan and G. Tullock, The Calculus of Consent (1962)
2.D. North and B. Weingast, "Constitutions and Commitment: The Evolution
of Institutions Governing Public Choice in 17th Century
3.B. Weingast,
“Political Foundations of Democracy and the Rule of Law.” American Political Science Review. (1997). (Link)
4.M. Olson, “Dictatorship,
Democracy, and Development,” American Political Science Review,
Vol. 87, No. 3. (Sep., 1993), pp. 567-576. (Link)
5.M. McGuire, M. Olson. “The Economics of Autocracy and Majority Rule: The Invisible
Hand and the Use of Force,” Journal of Economic Literature,
Vol. 34, No. 1. (Mar., 1996), pp. 72-96. (Link)
Reading:
1. J. Ensminger,
Making a Market: The Institutional Transformation of an African Society.
Week
9 (3/28): An Economic Anthropology
of Markets and Institutions
1.
2. J. March and J. Olsen. “The New
Institutionalism: Organizational Factors in Political Life.” American Political Science Review (1984). (Link)
Week
10 (4/4): Hierarchy and Organization
1. F. Zakaria, The
Future of Freedom.
2. McCubbins
and Schwartz, “Congressional Oversight Overlooked: Police Patrols vs.
Fire Alarms", AJPS (1984) (Link)
1. J. Aldrich, Why
Parties? The Origin and Transformation of Party Politics in
2. B. Weingast
and
3.
J. Jenkins and M. Munger. “Investigating the
Incidence of Killer Amendments in Congress.” Journal of Politics. 2003. (Link)
4. D.M. Kreps,
“Corporate Culture and Economic Theory,” in Alt and Shepsle (eds)
Perspectives on Positive Political Economy (1990). (e-reserves)
5. M. Hinich
and M. Munger, Ideology and the Theory of Political Choice (1994),
Chapter 4. (e-reserves)
6. K. Shepsle and B. Weingast,
“Structure-Induced Equilibrium and Legislative Choice,” Public
Choice (1981). (e-reserves)
Final Exam: This is a take-home, open book final. It is due in Mike Munger’s
mailbox, in a sealed envelope, in hard copy, no later than