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The Institutionalist Theory of Institutional Change Revisited: The Institutional Dichotomy in a More Formal Perspective

The Institutionalist Theory of Institutional Change Revisited: The Institutional Dichotomy in a More Formal Perspective

Journal of Institutional Studies, , Vol. 9 (no. 2),

The Theory of Institutional Change as elaborated by Paul D. Bush (1983, 1987) in the tradition of Thorstein Veblen, Clarence Ayres, and John F. Foster (“VAFB paradigm”) provided a central device for institutional analysis, both theoretical and empirical, with its clarification of the value bases and of different forms and dynamics of behaviors and value-behavior patterns (V-Bs). Particularly Bush’s 1987 paper pushed Institutionalism to a certain limit by elaborating the logical V-B relations and their change, which had been underexplored for long. Coming from a different “galaxy”, a critical formal approach, such as game theory (GT) – often applied only bluntly in the economics mainstream – has been applied by institutional and evolutionary economists in an evolutionary-institutional perspective in the last three decades, in order to close methodological gaps and to further operationalize, formalize, and develop Institutionalism. This paper strives to demonstrate that a proper interpretation allows bridging the institutionalist theory of institutional change and an evolutionary-institutional interpretation of GT (EIGT). It reveals surprising equivalences and complementarities with potential future synergies. It allows for a deeper analysis of institutions, revealing the value base in EIGT, and a deeper analysis of the instrumental-ceremonial asymmetry and of related ceremonial dominance and encapsulation. So Institutionalism might cut across traditional boundaries with respect to deeper analyses.

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Economic Modelling in Institutional Economic Theory

Economic Modelling in Institutional Economic Theory

Journal of Institutional Studies, , Vol. 9 (no. 2),

Our paper is centered around the formation of theory of institutional modelling that includes principles and ideas reflecting the laws of societal development within the framework of institutional economic theory. We scrutinize and discuss the scientific principles of this institutional modelling that are increasingly postulated by the classics of institutional theory and find their way into the basics of the institutional economics.
 
We propose scientific ideas concerning the new innovative approaches to institutional modelling. These ideas have been devised and developed on the basis of the results of our own original design, as well as on the formalisation and measurements of economic institutions, their functioning and evolution. Moreover, we consider the applied aspects of the institutional theory of modelling and employ them in our research for formalizing our results and maximising the practical outcome of our paper.
 
Our results and findings might be useful for the researchers and stakeholders searching for the systematic and comprehensive description of institutional level modelling, the principles involved in this process and the main provisions of the institutional theory of economic modelling.

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Institutional Theory of M. Olson: «The Principle of Expansion»

Institutional Theory of M. Olson: «The Principle of Expansion»

Journal of Institutional Studies, , Vol. 9 (no. 2),

The article explores the basic concepts of Mancur Olson's special interest groups theory, which demonstrates the «logic of collective action», elaborated using John Commons’ «extension principle». Such a perspective allows us to make some clarifications on the wording of this theory, provided that the criterion (rule) according to which agents behave in the group, when comparing individual and collective (group) benefits, is changing. If superiority of the individual benefit over the collective benefit is chosen as the target function, then for the maximum value of this criterion the relative change in the ratio between the individual benefits and total costs will be equal to the difference of relative change in the average values of the units of the public good produced and unit costs. Striving for the greatest individual benefit may impair the well-being of the economic system that is seen in the «prisoner's dilemma». However, the growth of the group does not always lead to reduced efficiency, which depends on input criteria. In other words, the assessment of the situation in the economy is determined by the «institutional function» of economic science, which gives a criterion for the implementation of the verdict. The «extension principle» is useful in the interpretation of economic policy, especially in the aspect of modification of the principle of «objectives and instruments». However, there is a limitation on the use of the principle associated with the «cobra effect» and the «expectations trap». In addition, there is a conflict of the «principle оf the theory presumption» according to which the power of the economic theory is determined by the solution of a larger number of tasks with less tools, and the «extension principle», requiring expansion of facilities and concentration of power. With regard to economic policy, this means the selection of tools from a wide set of measures of impacts with the rationale for their effectiveness (efficiency), is addressed not only to the parameters of influence, but also to the broader characteristics of the economic system.

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Rationality, morality and Economic Coordination: The Contours of Interaction

Rationality, morality and Economic Coordination: The Contours of Interaction

Journal of Institutional Studies, , Vol. 9 (no. 2),

The article represents an overview of general tendencies in interaction between the notions of rationality and morality, and their influence on the foundations of economic coordination. Firstly, two main directions of evolution of rationality model are considered: the theory of perspectives of D. Kahneman and A. Tverski (the empirical restriction) and economic imperialism of G. Becker (the conceptual widening), the role of the modern institutionalism being emphasized. The theoretical evolution of economic rationality had mainly instrumental character and didn’t change its ethical core – the central idea of welfare in economic motivation. In this regard, the two main ways of integration of rationality and morality in modern discussion are considered: conceptions of “multiple preferences” (1) and “moral obligations” (2). The first conception assumes the existence of stable beliefs or “meta-preferences”, which range ordinal desires or preferences. According to the second approach, a distinction of a qualitative nature is drawn between rational behavior, motivated by personal benefit or “sympathy”, and exclusively moral behavior, underlain by “obligation”. An approach according to which a distinction between rational and moral arguments is drawn, directly determines the principles of economic coordination, including the foundations of social justice. Among the latter, there are two ethical grounds – mutual benefit, based on the “sympathy” principle, and impartiality, grounded on the “obligation of power”. These conceptions imply the corresponding types of economic coordination: market-evolutional (focused on effectiveness) and constructivist (focused on redistribution).

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Dacha in Post-Soviet Russia: Institutional Analysis

Dacha in Post-Soviet Russia: Institutional Analysis

Journal of Institutional Studies, , Vol. 9 (no. 2),

This paper tries to analyze the phenomenon of «dacha» according to D. North's approach to institutions. The authors explore how dacha has become mass phenomenon in the late USSR, and how social and economic role of dacha increased in the Post-Soviet period. The specific features of the Post-Soviet Russia’s deurbanization has been studied. In particular, these features include large engagements of citizens in the rural way of life associated with dacha. It is shown how «dacha-ization» attributed to the crony capitalism. The economic role of dacha in Post-Soviet Russia is confirmed by comprehensive statistics, in particular. These data show that in Russia dacha serves rather as the source of food production than as place for leisure and recreation. The paper concludes that explicit priority of the model of organic agriculture in the dacha can be a kind of the solution of the problem of decreasing goods’ quality in the market economy (earlier described by one of the authors of the current paper). Moreover, this priority was fundamentally argued by D. I. Mendeleev. The authors believe that dacha will remain as an important institution for the Russians in coming years.

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Valuation of Human Resource During the Implementation of Resource Strategy of Sport Club

Valuation of Human Resource During the Implementation of Resource Strategy of Sport Club

Journal of Institutional Studies, , Vol. 9 (no. 2),

This study deals with the practice of human resource valuation in the professional command football during the implementation of sport club resource strategy. The choice of the direction of research is not random. Resource view in the analysis of strategy and strategy shaping (Barney, 1991) is an effective long term success tool. There are many costs in the process of resource allocation, in particular during resource valuation, in the market economy in connection, e.g. costs related to information collection and negotiating. Costs rise with the globalization of the economy. Therefore, it is important to create and maintain various institutions to control the level of costs and to study the most common practice of the resource strategy implementation. Particularly, it is important to study resource valuation in the context of institutional environment given the heterogeneity of markets. Human resource is the most important strategic resource on the market of professional command sport. At the same time, solving the problem of human resource allocation on this market leads to serious practical problems. Specifics of economic component of command sport results in the inevitability of labor market failure (Downward, Dawson, 2002) for sustainable development of the sector. Therefore, the need for institution which is to regulate the labor market occurs. Institute of transfer plays this role in some kinds of command sport, such as football. It is the system of concepts and rules, which regulate the transfer of athlete from one sport club to another prior to the expiration of the contract. The number of requirements exist due to the institute of transfer to the practice of athlete’s valuation, which determine the sum and the order of payment of compensation for prior sporting club management. The latter should correlate with the value of the athletes, which they are interest in, with the existing restrictions, which is the reason of the strongly pronounced heterogeneity of markets. Formalization of existing practices of pricing in different segments of professional athletes’ labor market is important for the support of decisions to invest in staff during resource strategy implementation. The current research deals with this problem. The model of linear regression with variable structure is used in the paper as the main instrument of formalization. The structure of the model reflects the structure of professional athletes’ labor market.

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Quality of Institutions and Import Substitution of Capital: Cross-country Research on the Corporate Bond Markets

Quality of Institutions and Import Substitution of Capital: Cross-country Research on the Corporate Bond Markets

Journal of Institutional Studies, , Vol. 9 (no. 2),

We have analyzed the institutional determinants of local currency (LCY) corporate bond markets development during the period of 2010–2016 on a cross–country sample. We have considered a wide range of indicators of the quality of the institutional environment including the Heritage Foundation's Index of Economic Freedom, the World Bank’s indicators of the development of political and legal institutions, the World Economic Forum’s indicators of corporate culture, the development and regulation of financial markets. Unlike most previous studies, we have tested not only static regression models (multifactor linear regressions) but also dynamic models based on the generalized method of moments (GMM), which allows to solve the problem of endogeneity of variables. The sample consists of 420 quarterly observations on 15 emerging markets, which were the leaders by the issuance volume of corporate bonds in the pre–crisis 2013.
 
The results show that the low quality of institutional environment as well as macroeconomic and financial instability stimulate the growth of the share of LCY corporate bonds in the total issuance volume. In the periods of instability, local currency corporate bonds become less attractive for foreign investors, therefore, issuers are forced to raise capital in the domestic market, i.e. to realize the import substitution of capital. We rank factors by the significance of their influence on the explained variable. The most significant factors in both static and dynamic model specifications are the World Bank’s indicators of regulatory quality and rule of law. A decline in sovereign credit ratings also gives impetus to the development of LCY corporate bond markets.
 
The results of our research show that more developed stock markets suppress the growth of LCY corporate bond markets: equity corporate bonds are competing financing sources for companies from developing countries. On the contrary, a developed banking sector contributes to the growth of the LCY corporate bond market: banks act as dealers and market makers. The devaluation of the national currency has the most significant positive influence on the explained variable among other macroeconomic factors, that is due to an increase in the cost of debt denominated in foreign currency.

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Measuring Institutional Change: The Case of the Russian Banking Industry

Measuring Institutional Change: The Case of the Russian Banking Industry

Journal of Institutional Studies, , Vol. 9 (no. 2),

The paper attempts to measure the institutional change using the example of Russian banking industry during the period of 1991–2016. I put forward a set of metrics featuring the actors and the relevance of banking for the economy. The metrics include the number of banks of each type, the share of state-controlled banks in total assets, loans and deposits, bank propensity to lend to the real economy, bank profitability, contribution to investment in fixed assets by nonfinancial companies, etc. At the first stage, the communist-era credit system fell apart as well as coordination mechanisms between monetary and real sectors of the economy. After the Russian economic crisis of 1998, evolution goes in the direction of greater government involvement in banking and centralized allocation of financial resources. The structural change has not yet led to a fully different modus operandi of the banking industry. The contribution of this paper is that it tackles the interplay between structural and institutional change in a particular economic sector.

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The Professional Identity of Urban Teachers in the Context of Educational Modernization

The Professional Identity of Urban Teachers in the Context of Educational Modernization

Journal of Institutional Studies, , Vol. 9 (no. 2),

The paper deals with the research findings of the empirical study in secondary schools in Moscow and Rostov-on-Don in 2017. A survey of more than 1,500 respondents was aimed at analyzing the perception of their social and economic situation by the teachers; studying the teacher’s social identity structure; identifying the labor motivation and estimate the degree of precaritization of the Russian teachers.
 
The survey findings have shown that the state social policy and salary level affect professional well-being of teachers. Teachers in the provincial city, compared with those who live in the capital (considering significant pay gap), are more critical about the prestige of their profession, quality of life and material prosperity, they are more sensitive to increased workload, without any noticeable increase in wage. At the same time, there are noticeably fewer Moscow teachers who are satisfied with the pedagogical profession itself. They are also concerned about the risks of job loss, wage cuts and increased workload.
 
In the structure of teacher's group identity in Moscow and Rostov schools, professional groups are inferior to primordial and abstract-symbolic communities. At the same time, a comparative analysis of the survey data in different years indicates that teachers in Russia traditionally maintain high level of corporate professional identity, i.e. their commitment and loyalty to their place of work and their colleagues.
 
In general, the excessive administrative burdens imposed on the teaching staff, as well as the societal demand for the results of teachers’ work in the context of the deteriorating economic situation in the country, create risks for maintaining positive professional identity of teachers, and largely limits the capacity of the reforms in school.

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Social control of the quality of public services: Theory, methodology and results of empirical research

Social control of the quality of public services: Theory, methodology and results of empirical research

Journal of Institutional Studies, , Vol. 9 (no. 2),

The article reveals the theoretical and methodological aspect of the problem of social control in relation to the possibility of its implementation in the production of public services. The interdisciplinary nature of the discourse on the nature of social control is presented, the evolution of ideas about it in the framework of social science concepts is presented, and the relationship with related categories is revealed, in particular, "public control", "civil control". The evolution of essence is also traced the category "institutionalization", it is shown the lack of unambiguousness in its interpretation. The normative value of the institutionalization of social practices in the implementation of institutional design is presented, in particular, with regard to the improvement of the provision of public services. The barriers of institutionalization of social control (resource, information, institutional) for quality of public services are characterized. The results of a mass survey of consumers of public services conducted in December 2016 in the Multifunctional Center (MFC) of city Omsk are presented. Unlike other surveys and publications that only assess the level of customer satisfaction and do not give a detailed explanation of the attitude of consumers to the ongoing institutional changes, this paper presents an analysis of consumer attitudes and beliefs to meaningful attributes of the quality of public services on the one hand, and for various institutional alternatives of influence on the quality of public services on the other. According to the results of the mass survey, the low readiness for social action was established due to high transaction costs, the rational ignorance and a free-rider problem. The possibility of institutionalizing the practice of social action and setting up consumers for the creation of a specialized organization for the protection of consumer rights in the production of public services was discussed.

Views: 653

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