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Firm reorganizations deeply affect employees. Management can reorganize in different ways, focusing on costs or acknowledging the involvement of employees. The latter implies following a social contract that complements incomplete (formal) labor contracts. Little is known about how the way in which firms reorganize affects their subsequent performance. Should a firm reorganize more socially, keeping the concerns of employees in mind as evident from an existing social contract, or should it focus on control the future direction of the firm and the costs made? We show that reorganizing more socially does not increase firm performance ex post, but taking more time when reorganizing does. Keywords: Downsizing, reorganization, firm performance, employee social contract JEL Classification Codes: D22, L21, M51, Firms appear to be continuously reorganizing. While reorganizing was originally thought of as a last resort for struggling firms, nowadays reorganizing seems to represent good management practice (Chadwick, Hunter and [...]

Taking the idea that institutional reproduction is not obvious and that institutions are vulnerable has significant conceptual implications. Institutional vulnerability can arise through communication between actors in a common language. To apprehend this requires an elaboration of John Searle's (1995, 2005) argument that language is the fundamental institution. Ontologically, language delineates and circumscribes a community. A community cannot function without a common language, and language at the same time constitutes a community's boundaries, allowing for focused and effective communication within a community. Communication through language introduces ambiguity as well, however, and so institutional reproduction, mediated by language, is a deeply contentious process. Communication across boundaries may particularly 'irritate' a system, as Niklas Luhmann has argued. How can institutions then be re-identified through change? Searle's general form for institutions is in need of elaboration. We develop arguments by drawing upon Luhmann's (1995) systems analysis and notion of communication. Keywords: communication, institutions, language, reproduction, vulnerability JEL Classification Codes: A13, B40, B52, Z00, Boundaries are an evolutionary achievement par excellence.--Luhmann (1995) Institutionalist analysis has emphasized the durability and reproductive qualities of institutions in a system with differential levels and rates of evolutionary change. [...]

Economists tend to see the market as a default option for social order and a role for government only when markets fail. Developing a convincing analysis of the role of government in economic processes, however, needs to start by considering government failure in its own terms. Drawing on insights from institutional economics, law and economics and the philosophy of law, emphasizing the necessity of rules for the economy, this paper develops the concept of government failure. The paper identifies and develops four different types of government failure. Government can set rules for economic processes and actors that are (1) too specific, (2) too broad, (3) that are arbitrary, or (4) that conflict with other rules it has set out to address other, related issues (possibly primarily noneconomic). Government failure is illustrated in the context of Intellectual Property Right (IPR) law as it relates to Anti-Trust law. Keywords: anti-trust law, government, government failure, intellectual property rights, rules in the economy JEL Classification Codes: K0, H10, P16, 1. We regard the state as an agency whose positive assistance is one of the indispensible conditions of human progress. (1) The way in which economists have looked at the [...]

From an institutionalist perspective, we identify five sources of policy conflict. Each may explain why policies intended to obtain particular goals for an institutionalized practice may have unintended consequences. We illustrate by analyzing attempts at introducing market-oriented reform in health care provision. Keywords: health care, market-oriented reform, policy, policy conflict. JEL Classification Codes: I28, I38, I11, H40, Despite what is assumed in much of the economic literature, an exception being institutional economics, policies are not fully plastic and cannot be sufficiently tailored such that they regulate a [...]

Over time, economics has experienced paradigm shifts, and there is every reason to think this will continue. In economics, as in the development of technological knowledge, paradigms do not emerge from nowhere, but build on precursors, possibly from other fields. Our understanding of current economic thinking can be enhanced by paying greater attention to the role of paradigms and by using concepts such as myth, plot structure, and cultural endowment, which are typically given greater attention by literary analysts than by economists, to study paradigms. Here we argue that together these can help us better understand how ideas from other times and fields may be combined with our own to generate better research and publications, and that a greater awareness of the history of economics may well be an excellent vehicle for enhancing that understanding.

This study makes a number of observations about the way in which the current crisis in particular, but economic crises more generally, are reported upon by the media. Considering terminology used to describe the financial crisis of 2007/2008 by employing a dataset of 956 articles from The Economist, we study what terms are used, why, and how they evolve. We consider how the frequency of negative emotional terms and the frequency of negative economic terms increase from the period of no-crisis to the period of the crisis. Increasing incidence lowers levels of consumer confidence. We predict that as the crisis evolves the nature of the terminology used to describe it will change, and that the present crisis will receive a special name, like the 'Great Depression' of the 1930s. We explore a number of possibilities, and conclude that the preferred name will be the 'Credit Crunch.' Keywords: content analysis, business and economic cycles, recession, depression JEL Classification Codes: A1, E6, G00, Z00, How was the crisis of 2007/2008 reported in the media, and how is it likely to be referred to in the future? What terms are used, why, and how has [...]

Research on institutional change has flourished ever since the debate on agency and structure has moved away from the previously uncompromising positions in which either agency or structure was emphasized. A conceptual compromise is sought here in a focus on the processes of institutionalization, which allows one to move beyond the idea that institutions are mere mental constructs or the point of view that behavior is the mere reproduction of institutional patterns. Contributing to an understanding of the processes of institutional change, this paper analyzes institutional change as instigated by tensions, triggered by agents' discrepancies between concrete institutional settings and the socio-economic values these are to represent. The Social Value Nexus that is presented introduces an emphasis on the perceived legitimacy of institutions. Describing (types of) tensions between socio-cultural values and institutional settings, the paper explores how structure, agency and values interact in processes of institutional change. Keywords: institutional change, socio-cultural values, structure and agency, legitimation. JEL Classification Codes: D79, D02, Z10, B52, A13, The idea that institutions matter, nowadays, is commonplace. This should not be taken to imply that widespread agreement exists among the social sciences or even within disciplines about the nature [...]

New Institutional Economics (NIE) claims that Silent Trade exists. Indeed, it would constitute the first step 'as trade moves beyond the border of the village' (North). In this brief article we show both that Silent Trade--trade between parties who have only the most minimal of a shared flame of reference, without direct contact--has not existed and that NIE cannot account for the representational re-description and change in governance structure that it would entail. At least on the issue of language and learning, NIE is categorically different from Original Institutional Economics (OIE). Keywords: Institutional economics, silent trade, language, gift exchange, economic methodology JEL Classification Codes: B25, B41, D83, N00, F19, The Carthaginians say also this that there is a place in Libya, and People living in it, beyond the Pillars of Heracles. When they, the Carthaginians, come there and disembark [...]

'Bankruptcy is perhaps the greatest and most humiliating calamity which can befall an innocent man' --Adam Smith From an evolutionary perspective, bankruptcies may be seen as an important selection mechanism. [...]

Since it is rooted in a contradiction, there can be no such thing as an ideally beneficial patent system, and it is bound to produce negative results in particular instances. [...]

The relationship between market and society is a hotly debated issue in the social sciences. At the level of theory, this discourse dates back to considerations of social order in [...]

Abstract Fashion is the quintessential post-modernist consumer practice, or so many hold. In this contribution, I argue that, on the contrary, fashion should be understood as a means of communicating [...]

[B]oundaries of the mind and habit are harder to take down [than boundaries between states]. --The Economist The World Bank is prime among the organizations formulating and implementing economic policy [...]

Kor Grit (2) Wilfred Dolfsma (3) Abstract In this article, we analyze recent dynamics of the Dutch health care sector, a hybrid system of public, private and professional elements, in [...]

Even though Adam Smith claimed that 'consumption is the sole end of production,' economists have not given it much attention. Institutional economics has done better than the average strand of [...]

edited by John Foster New York: Routledge, 1997, $74.95 cloth, $25.99 paper, 286pp. Economists like to argue that any choice, including a choice that effects the environment in any way, [...]

Impurity and Social Order Geoffrey Hodgson [1995] has proposed that capitalist economies can be distinguished by how the 'impurity principle' works and by the extent to which a capitalist economic [...]

By Viviana A Zelizer. Princeton: Princeton University Press, 1997. 286 + xi pp. $14.95. Viviana Zelizer's new book, The Social Meaning of Money, is a next step in a personal [...]

Abstract 'Knowledge' takes a central place in economics. This paper shows that the metaphor pervasively used in neoclassical economics to understand knowledge is that of 'capital'. Taking capital as a [...]

In the 18 years that John Davis has single-handedly edited the Review of Social Economy (ROSE), the journal has not only maintained its prominent position as a heterodox economics journal [...]

Only in recent times is attention from economists moving to the topic of consumption, even as Adam Smith claimed in his Wealth of Nations that consumption is the sole end [...]

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The article discusses the papers on the association between media and economics, that were delivered at the Annual Meeting of the Royal Netherlands Economic Association in 2006. A research on the possible failures in media markets provides characteristics of information goods that can cause media markets to fail. Another contribution looks at how public broadcasters can offer high-quality products designed to a small niche market while at the same time catering to a large audience to generate resources.

An assumption generally subscribed to in evolutionary economics is that new technological paradigms arise from advances is science and developments in technological knowledge. Further, demand only influences the selection among competing paradigms, and the course of the paradigm after its inception. In this paper, we argue that this view needs to be qualified and modified. We demonstrate that, in the history of computing technology in the 20th century, a distinction can be made between periods in which either demand or knowledge development played the bigger role in shaping the technological paradigms. In the demand enabled periods, new technological (sub-)paradigms in computing technology have emerged as well. [ABSTRACT FROM AUTHOR]

Value theory is central to economics. Whenever new economic theories appear on stage, their theory of value is different. I classify value theories along Locke's lines of primary and secondary qualities. When value is thought to inhere in objects, value is a primary quality. The marginalists perceive value as given to objects by autonomous individuals independent of their environment (much like monads) with given preferences. Value here is a secondary quality. Both are unsatisfactory; value is a social construct. The question arises why social value theory, which Clark and Anderson worked on around the turn of the nineteenth century, did not take root. [ABSTRACT FROM AUTHOR]