The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The Economic Institutions of Capitalism

This handbook looks to provide academics and students with a comprehensive and holistic understanding of the phenomenon of innovation. Innovation spans a number of fields within the social sciences and humanities: Management, Economics, Geography, Sociology, Politics, Psychology, and History. Consequently, the rapidly increasing body of literature on innovation is characterized by a multitude of perspectives based on, or cutting across, existing disciplines and specializations. Scholars of innovation can come from such diverse starting points that much of this literature can be missed, and so constructive dialogues missed. The editors of The Oxford Handbook of Innovation have carefully selected and designed twenty-one contributions from leading academic experts within their particular field, each focusing on a specific aspect of innovation. These have been organized into four main sections, the first of which looks at the creation of innovations, with particular focus on firms and networks. Section Two provides an account of the wider systematic setting influencing innovation and the role of institutions and organizations in this context. Section Three explores some of the diversity in the working of innovation over time and across different sectors of the economy, and Section Four focuses on the consequences of innovation with respect to economic growth, international competitiveness, and employment. An introductory overview, concluding remarks, and guide to further reading for each chapter, make this handbook a key introduction and vital reference work for researchers, academics, and advanced students of innovation. Contributors to this volume - Jan Fagerberg, University of Oslo William Lazonick, INSEAD Walter W. Powell, Stanford University Keith Pavitt, SPRU Alice Lam, Brunel University Keith Smith, INTECH Charles Edquist, Linkoping David Mowery, University of California, Berkeley Mary O'Sullivan, INSEAD Ove Granstrand, Chalmers Bjorn Asheim, University of Lund Rajneesh Narula, Copenhagen Business School Antonello Zanfei, Urbino Kristine Bruland, University of Oslo Franco Malerba, University of Bocconi Nick Von Tunzelmann, SPRU Ian Miles, University of Manchester Bronwyn Hall, University of California, Berkeley Bart Verspagen , ECIS Francisco Louca, ISEG Manuel M. Godinho, ISEG Richard R. Nelson, Mario Pianta, Urbino Bengt-Ake Lundvall, Aalborg

The Oxford Handbook of Innovation

Exploration and exploitation have emerged as the twin concepts underpinning organizational adaptation research, yet some central issues related to them remain ambiguous. We address four related que...

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The interplay between exploration and exploitation

Sustainability transitions: an emerging field of research and its prospects

Models that depict innovation as a smooth, well-behaved linear process badly misspecify the nature and direction of the causal factors at work. Innovation is complex, uncertain, somewhat disorderly, and subject to changes of many sorts. Innovation is also difficult to measure and demands close coordination of adequate technical knowledge and excellent market judgment in order to satisfy economic, technological, and other types of constraints—all simultaneously. The process of innovation must be viewed as a series of changes in a complete system not only of hardware, but also of market environment, production facilities and knowledge, and the social contexts of the innovation organization.

An Overview of Innovation

Complex technological systems like telecom, energy and transport infrastructures are subject to institutional (re)design. Institutions concern different levels of analysis like laws and regulations as well as contracts and organisations which regulate and coordinate the behaviour of actors in complex networks. In relation to technological and process design, we discuss how efficient and effective institutions can be designed according to structure behaviour in such a way that socially desired objectives are realised. After analysing the stabilising and instrumental role of institutions, we introduce a four-layer model, which offers the building blocks for identifying the steps to be considered in processes of institutional design. After having discussed the constraints in designing institutions, we present a generic model meant to be helpful in structuring the process of designing institutions in complex technological systems.

Institutional design for complex technological systems

This article elaborates on the possible interrelations between the technical and institutional coordination of infrastructures. There is indeed a need for coherence between both in order to safegua...

The quest for coherence between institutions and technologies in infrastructures

Economics and Institutions

In institutional economics, the explanandum is the institution. Definitions of institution refer to a framework of behavior: institutions direct, channel, or guide behavior. We prefer to distinguish values as the underlying systems of belief about right and wrong from the more concrete institutional structure of norms, rules, and structures. In economics, it is important to study the influence of the institutional structure on behavior in order to understand better the performance of firms, markets, and economies in different settings. For instance: with respect to take-overs, norms in Japan differ from the American ones; legal rules of competition differ in the United States from those in France, and the structure of market and firms differ between sectors, which influences behavior of management with respect to diversification, networking, and the like. Central questions in institutional economics are why institutions come into existence, why they develop in specific ways, and what can be said about their efficiency? In economics, these questions are approached from different perspectives within the schools of new and old institutionalism. These schools differ in respect to their problem definition (explanandum), to their explanatory variables (explanantia), and to their methodology of

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On Integrating New and Old Institutionalism: Douglass North Building Bridges

Institutionalist analysis is increasingly used as a key research tool for economists confronted with the shortcomings of mainstream economic analysis and the problems presented by the transformation of socio-economic systems in Eastern Europe. On Economic Institutions brings together leading economists working in a wide range of research traditions who examine theories of institutions and institutional change.

John Groenewegen

Papers

Institutional design for complex technological systems

The quest for coherence between institutions and technologies in infrastructures

Economics and Institutions

On Integrating New and Old Institutionalism: Douglass North Building Bridges

On economic institutions