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Mesoeconomics and Complexity Economics: Going Beyond the Limits of Economic Orthodoxy

Mesoeconomics and Complexity Economics: Going Beyond the Limits of Economic Orthodoxy

Journal of Institutional Studies, , Vol. 10 (no. 3),

The main goal of the article is to show how such new approaches as Mesoeconomics (ME) and Complexity Economics (CE) in economic analysis meet the challenges facing modern economic science. It is shown that the development of these approaches has been brought about by both practical needs and shifts in the system of paradigmatic scientific knowledge. Also shown are the differences between the initial assumptions of CE and ME, and the set of initial postulates of neoclassical mainstream economics. It is emphasized that CE and ME are based on modern ideas of self-organization of complex systems. At the same time, they restore the traditions of classical Political Economy, since they also consider the organic nature of the economy, evolutionism and historical conditioning. Both approaches explore the logic of the formation of economic mechanisms that create patterns of economic life and the spread of change. Along with the commonality of the approach from the ME perspective and the approach from the point of view of CE, their distinctive characteristics are identified, which allows them to complement each other. Comparison of ME and CE makes it possible to carry out a more in-depth analysis of the methodological features of mesoeconomic analysis, in comparison with the author's earlier works on this subject (Kirdina-Chandler, Maevsky, 2017; Kirdina-Chandler, 2018 – both in Russian).

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Mesolevel and Hierarchical Structure of the Economy

Mesolevel and Hierarchical Structure of the Economy

Journal of Institutional Studies, , Vol. 10 (no. 3),

The thesis is grounded that any market economy, on the one hand, has a system of horizontal links between economic agents and is capable of self-organization. On the other hand, contrary to the opinion of the liberal economists, is endowed with signs of a hierarchically organized system, i.e. a system consisting of several levels, where each level is governed by a higher level. In the case of a hierarchical organization, macro-level entities are not statistical aggregates of the GDP type, but quite specific macroeconomic organizations such as the Central Bank, The Federal Tax Service, the Ministry of Economic Development, etc. Since macroeconomic organizations, as a rule, do not directly influence the behavior of micro-level entities, one can assert that the existence of the meso-economic organizations (banks, securities markets, insurance companies, etc.) is an objective given to be studied by meso-economic theory. In this context, the problem of the modeling the transmission mechanism of monetary policy is topical: within the framework of a hierarchically organized economy, this mechanism must also be hierarchically organized. At present, the Bank of Russia has a set of transmission mechanism models that consider the hierarchy principle.

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Methodological Bases of the Mesoeconomics as a Complex System

Methodological Bases of the Mesoeconomics as a Complex System

Journal of Institutional Studies, , Vol. 10 (no. 3),

The article gives theoretical and methodological explanation of the meso-level of the economics as a complex self-developed system, the directions of mesoeconomic analysis are substantiated. The development of theoretical approaches to meso-level problems is shown, as well as the meso-level interpretation in the framework of the evolutionary-synergetic theoretical paradigm. The meso-level is methodologically described as a development "from the microscopic level to the macroscopic level" (H. Haken). The reason for the allocation of the meso level is that the structures as the main characteristic of the system are formed at this level. The types of self-organization structures of the socio-economic system are considered. The spatial, temporal and functional structures are described. It is shown that the meso-level structure of the system is much more complicated than only the institutional space, and it is closely related. It is concluded that the evolutionary-synergetic theoretical aspect of mesoanalysis can be useful in the search for a new model of Russia's socio-economic development.

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The Mesolevel Objects Identification: Russian-Language Publications Analysis

The Mesolevel Objects Identification: Russian-Language Publications Analysis

Journal of Institutional Studies, , Vol. 10 (no. 3),

The history of mesoeconomic research has more than a decade. It can be argued that in the plane of theoretical understanding of the problem by researchers, including Russian-speaking authors, a certain basic understanding of what the meso level is and what is the subject area of the mesoeconomic research. According to the dominant concept, the meso level is the space where the institutions are formed. But there is a problem of the practical application of the developments in mesoeconomic theory, and the problem of identifying meso- economic objects. The most common is the principle of spatial-branch identification: the objects of mesoeconomics in this case are called regional and branch economic complexes. However, it seems to contradict the evolutionary-institutional understanding of mesoeconomics. The spatial-branch principle, following the neoclassical logic of using microeconomic foundations and aggregating larger economic objects (individual group) by simply summarizing the qualities and properties of microobjects, excludes the institutions formation emergent effects. The article gives an overview of the ways of identifying mesoeconomic objects offered by Russian-speaking authors: clusters, hierarchies, platform markets, the most promising of which is the idea to identify the platform markets as meso-level objects.

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Claude Menard’s Meso-Institution Theory and It’s Application in the Institutional Design

Claude Menard’s Meso-Institution Theory and It’s Application in the Institutional Design

Journal of Institutional Studies, , Vol. 10 (no. 3),

As the analysis of the publication activity of economists shows, despite the aversion from a significant part of the economic mainstream representatives, the idea of the need to allocate the meso level of the economy finds more and more supporters among the heterodox lines of economic thought, primarily among evolutionists and institutionalists. The article shows that the meso-level interpretation, which is relatively popular among the latter, as a space for the formation of institutions, can be extended beyond the limits of theoretical institutionalism. Claude Menard's theory of the meso-institutions as organizational structures of an intermediate level can be an example. It is noted that the theory of meso-institutions shifts the traditional view of meso-economists from consideration of upward processes of institutionalization of rules and informal norms towards consideration of top-down processes of introducing and adapting formal institutional norms developed at the macro level into a complex institutional environment. Moreover, meso-institutions can be considered as backbone structures on which the oncoming descending and ascending movement of formal and informal norms is integrated, which determines their significance in the processes of designing strategies for institutional transformations. Are shown the prospects of using the theory of meso-institutions of Claude Menard for such areas as institutional design and reform theory.

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Transaction Costs in the Public Procurement in Russia: Macrolevel Assessment Based on Microdata

Transaction Costs in the Public Procurement in Russia: Macrolevel Assessment Based on Microdata

Journal of Institutional Studies, , Vol. 10 (no. 3),

Cost accounting in public procurement is an essential element in optimizing the procurement process for an individual enterprise as well as in evaluating the procurement regulation system at the state level. Today, however, insufficient attention is paid to this issue in Russian and foreign studies. There is limited literature devoted to assessment of costs at the level of individual enterprises or projects. Only several foreign studies estimated the costs of public procurement at the macro level (country or regional). No such macro level assessment has been carried out in Russia so far. This paper, based on a mass-scale online survey of customers and suppliers conducted in 2017, is the first attempt to estimate the average costs of public procurement in Russia, including the average costs for each type of procurement procedure. According to our estimates, the total cost of public procurement in Russia was about 64 billion rubles in 2016, or about 1% of the total contracted amount for that year. Using regression analysis, we also investigated the impact of various factors on the cost value of public procurements – the size of the respondent's organization (number of employees), the scope of activity, the number of staff involved in public procurement, the region, the qualifications/work experience of the employee, gender differences. The most significant factor influencing costs assessment of procurement procedures is the respondent's experience with complex competitive procedures.

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Methodical Ware of Evaluate the Economic Efficiency Institutional Changes in the Markets

Methodical Ware of Evaluate the Economic Efficiency Institutional Changes in the Markets

Journal of Institutional Studies, , Vol. 10 (no. 3),

The article includes the solution of the question of methodical ware institutional changes research relating to different markets. Relying on the former suggested theoretical approach and the relevant modelling the article describes a set of techniques developed by the authors, designed for practical assessment of the economic efficiency of institutional changes in the markets. The complex consists of four interrelated methods: the boundary market delimitation; the allocation of market economic subjects and the description of the institutional environment of the market; the signification of institutional changes on the market; the analysis of institutional changes and calculation of their efficiency in the market; the decision making on rising of institutional change efficiency. A key pillar of the methodology for determining of the market boundaries, the allocation of economic subjects of the market and the description of the institutional environment of the market is a logical scheme of signification of institutional changes subjects. As part of the methodology of institutional changes signification, a shaping circuit of a new institutional environment of the market is developed, a sequence of changes entering in the functional institution is formed, and then the influence of changes in the components of the functional institution on the subject of activity and institutional changes is determined. The method of institutional change analysis and calculation of their efficiency consists of the relevant circuit and an evaluation method. The decision-making method for the efficiency rising of institutional changes proposes the decision-making circuit, which is applicable, both at the stage of designing and discussion of the new Institute, and at the stage of its implementation and operation.

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Comparative Characteristics of Progressive and Flat Income Tax Scales

Comparative Characteristics of Progressive and Flat Income Tax Scales

Journal of Institutional Studies, , Vol. 10 (no. 3),

The political dilemma of introducing a progressive income tax in Russia is considered in this article. The role of this tax for the income part of the Russian consolidated budget is revealed, its impact on social inequality is shown. For this purpose, classical and the most recent studies on the relationship of income tax and social inequality have been analyzed. To discuss the appropriateness of the flat income tax scale abolition and its replacement by a progressive, the article proposes a simple two-parameter model that allows for various scenario calculations of tax reform from the point of view of its influence on the budget revenues and social inequality. As a measure of social inequality is considered the Coefficient of funds (Coefficient of Rainbow). In order to carry out macroeconomic estimates correctly, the statistical data on the distribution of income of the population has been carefully calibrated. For this purpose, two calibration conditions were introduced, the implementation of which is mandatory to neutralize the distortion in the applied calculations. This procedure allowed to identify errors in the calculations of the three political factions that support the introduction of a progressive income tax scale (A Just Russia, the LDPR and the Communist party of the Russian Federation). The developed integral criterion and qualitative risk index allow to compare quantitatively different institutional strategies of introduction a progressive income tax scale more objectively. Applied calculations have shown that the introduction of a progressive income tax scale is currently premature and should be postponed until a more appropriate time.

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Urban Discourse about City Improvement: from Narratives to Institutions

Urban Discourse about City Improvement: from Narratives to Institutions

Journal of Institutional Studies, , Vol. 10 (no. 3),

The article is devoted to the research of problem of incoordination of ideas about the strategy of improvement of the city between authorities and the self-organized city communities of activists. In the institutionalisation processes the city communities are explore and make discoursive practices, keeping the existing urban discourse. Mediating between institutional constructs and social practices, discoursive practices allow to reveal inefficiency of functioning of institutes. Urban discourse represents demands to improvement of the city of city activists, media, municipal and city authorities, that allows to see the conflict arising because of incoordination of ideas of strategy development and arrangements of the city. For the description of the urban conflict of city communities is used the theory of an institutional dissonance of S. G. Kirdina-Chandler. Authors are analysed an institutional dissonance of three types of a discourse: the discourse of high urbanistics, which operates with image of the industrial, modernist city; the discourse of the left urbanistics, which focus attention on social problems in the city; the discourse of hipster's urbanistics, which underline request of citizens for creative economy, modern design of public spaces, that allow to improve quality of life. The structure of the urban discourse about improvement of the city of Omsk is revealed and described in the article. Assessment of positions of the actors, that influence on the formation of the institutional environment of the city of Omsk is made. Representations of X, Y-matrixes of an urban discourse about improvement of the city in the city are counted and analysed.

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Constructing and Spreading Information through Economic Institutions: the Case of Gift-Exchange

Constructing and Spreading Information through Economic Institutions: the Case of Gift-Exchange

Journal of Institutional Studies, , Vol. 10 (no. 3),

The article deals with the connection between the processes of creating and spreading information within and outside of the community and the economic institutions that take place in such community. The main task of the article is to analyze how individuals can use their economic interactions with other people to promote certain information about themselves; what kind of information can be spread like that; and how the pursue to transmit information impacts economic behavior. To solve this task, article focuses on the institution of gift-exchange and considers its mnemonic and informational functions. Article provides brief overview of the history of the issue and its modern state with an insight to the concept of “transcendent values” by Weiner and anthropological theory of value by Graeber. It also compares the views of classic anthropologists such as Mauss and Sahlins with the views of economists that turned their attention to anthropological issues – in particular, to Gregory’s. The second part of the article considers the implementation of the informational function of archaic gift-exchange within the modern institutions of market economy. This part provides detailed discussion of Douglas and Isherwood; information theory of consumption and highlights its similarities and differences with the concept of symbolic capital by Bourdieu. The last part of the article provides final conclusions regarding the roles of informational and mnemonic functions in status demarcation and increase in the context of gift-exchange and conspicuous consumption; as well as regarding the connection between informational function of economic institutions and reputational mechanism that monitors the performance in the presence of agency problem. The conclusion shows the ways for future implementation of these findings for analysis of conspicuous consumption and sharing economies.

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The Metrics Trap, or Why is Implicit Knowledge Underestimated when Regulation of Science and Education is Handled

The Metrics Trap, or Why is Implicit Knowledge Underestimated when Regulation of Science and Education is Handled

Journal of Institutional Studies, , Vol. 10 (no. 3),

Currently, performance-based regulation penetrates ever more deeply into all spheres of public life. In science and education, metrics are becoming increasingly important component of policy and regulation aimed at ensuring greater efficiency. Quantitative indicators are easier to use when implementing regulatory measures. However, it is hard to understand and adapt policies to the institutional environment and social values using quantitative metrics. Despite the seeming simplicity and efficiency, use of metrics for managerial purposes implies a danger of falling into the institutional metrics trap. The metrics trap is a kind of institutional trap in which fixation on key performance indicators occurs, implicit knowledge (as well as organizational and social values and complex professional activities in organizations) being neglected. Study of the mechanisms for implicit knowledge generation and dissemination is important for understanding the effects of higher education reforms. Metrics based management in the public sector, and, in particular, in science and education, could unleash an uncontrollable situation that would have negative consequences for long-term development. Negative factors include increased manipulation and lower motivation, decline of confidence in the scientific community, and rising social tensions. Implicit knowledge generation and dissemination require personal contact and confidence in the professional community, hence effectively laying the foundations for freedom and creativity of scientific search. However, recognizing the importance of implicit knowledge and qualitative performance characteristics, importance of metrics for the regulatory processes should not be underestimated. In comparative terms, more effective grass-roots metrics based on professional and organizational values and implicit knowledge are contrasted with vertical metrics that are associated with coercive bureaucracy and danger of institutional metrics trap.

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Reflections about the Book by A. S. Skorobogatov “Society as a Contract Between the Strong and Week. Essays on Economics of History” (M.: HSE Publishing House, 2018)

Reflections about the Book by A. S. Skorobogatov “Society as a Contract Between the Strong and Week. Essays on Economics of History” (M.: HSE Publishing House, 2018)

Journal of Institutional Studies, , Vol. 10 (no. 3),

The paper is an extended review of the book “Society as a contract between the strong and weak. Essays on economics of history” by A. S. Skorobogatov. This monograph is an attempt to construct the general economic theory of the social-and-economic history, and it is almost unique for the Russian economic literature. According to A. S. Skorobogatov, one of the most important characteristics of the pre-industrial societies is an uneven distribution of the power possibilities among individuals and their groups. This phenomenon is concerned with “territorial aspects”. Such aspects include geo-economic, geopolitical, “geocultural” and demographic factors. Those groups of people who possess more power possibilities exploit the others, and purely economic activity is “the destiny of the weak”. But, inasmuch as any society is a contract between the strong and weak, the latter also received gains from its emergence. According to A. S. Skorobogatov, the main precondition for the transition to industrial society and rapid economic growth is concerned with strengthening of a link between the economy and the power possibilities due to the progress of military technologies. The critique offered in the paper focuses on the two directions. The first one is that the author of the book follows the standard Neoclassical treatment of rationality. This treatment, on the one hand, is hardly necessary for receiving main results of his investigation, and, on the other hand, not argued in detail. In particular, rationality can be treated not as the universal feature of the human behavior, but as the product of social norms and institution. Typical person lived in the preindustrial era, was characterized by an absence of propensities to calculate and to make optimal choice. It is consistent with self-interested behavior. The second direction of the critique is that the author of the book pays insufficient attention to “the hockey stick of the economic growth” and divergence in the process of growth. The paper contains – absent in the book – arguments explaining why some countries grow faster than other countries. In particular, we list factors both encouraging and obstructing innovative activities in the capitalist and socialist systems.

Views: 88

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