Showing papers in "Journal of Economic Issues in 2004"

Analyzing Job Mobility with Job Turnover Intentions: An International Comparative Study

Abstract: This study analyzed job-turnover intentions in twenty-five countries with data from the 1997 International Social Survey Program. Results show that high turnover intentions, measured as the proportion of employed individuals that report a very likely change of job in the next 12 months, can be observed in Canada, 17.0 percent, the U.S., 14.3 percent, and Great Britain, 14.3 percent. Low turnover intentions are encountered in Japan, 1.8 percent, Spain, 3.0 percent, and several Eastern European countries. The determinants of turnover intentions are, in a number of cases, the same as those observed in many studies on actual turnovers. Determinants of turnover intentions do vary substantially among countries. However, union membership, public-sector employment, job satisfaction, job security, and firm pride are significant in most countries. The high turnover intentions observed in Great Britain, France, and, to a lesser extent, Canada can be explained by the subjective measures considered in this study. Especially Great Britain and France have very low rankings of job satisfaction, job security, advancement opportunities, and firm pride. Despite having the same turnover intentions, Great Britain and the United States differ substantially with regard to the subjective determinants. Whereas the high turnover intentions in Great Britain can be explained by the relatively poor perceived job satisfaction, job security, and firm pride, high turnover intentions in the United States coexist with relatively high levels of job satisfaction, job security, advancement opportunities, firm pride, and, most notably, good perceived labor market opportunities.

Old Habits Die Hard:Path Dependency and Behavioral Lock-in

Abstract: (2004). Old Habits Die Hard:Path Dependency and Behavioral Lock-in. Journal of Economic Issues: Vol. 38, Papers From The 2004 AFEE Meeting, pp. 371-377.

Machine Dreams: Economics Becomes a Cyborg Science

Abstract: democracy one means the dissolution of the state, then we do not need such democracy\" (Steven Lee Myers, \"In Russia, Apathy Dims Democracy,\" November 9,2003, section 4, pp. 1, 5). Deng Xiaoping likened his brand of incremental reform to \"fording the river by feeling the stones\" (p. 118) while India's reforms, \"developed little by little, through the constant interaction of economic compulsions with political constraints\" (p. 177). India, however, unlike China is a democracy, and although India has made mistakes, its general approach to reform is commensurate with the instrumental value principal, a central tenet of institutionalism which \"neither directs nor implies movement in the direction of a preconceived set of institutional forms\" (Tool 2001, 298-9). Russia, by contrast, seduced by orthodoxy, implemented shock therapy with the teleological objective of quickly creating an idealized market economy without considering popular needs. The Perilous Road deserves a place in the pantheon of reform texts. In addition to a superb historical analysis of the problems facing Russia, China, and India, the book offers a recipe for successful reform firmly grounded in institutionalist principles. The Perilous Road elucidates the crucial role of a viable state in the evolutionary growth of market economies while disparaging the orthodox claim that markets spontaneously arise. I recommend this book for specialists contemplating future market reform in other regions of the world, while, at the same time, it is well-suited for a place in the economics curriculum.

To Be a Heterodox Economist: The Contested Landscape of American Economics, 1960s and 1970s

Abstract: (2004). To Be a Heterodox Economist: The Contested Landscape of American Economics, 1960s and 1970s. Journal of Economic Issues: Vol. 38, No. 3, pp. 747-763.

Complex Systems Theory and Development Practice

Abstract: Bhaskar, Roy. Scientific Realism and Human Emancipation. London: Verso, 1986. Bush, Paul D., and Marc R. Tool. \"Foundational Concepts for Institutionalist Policy Making.\" In Institutional Analysis and Economic Policy, edited by Marc R. Tool and Paul D. Bush. Boston: Kluwer Academic Publishers, 2003, 1-46. Dewey, John. The Quest for Certainty. In John Dewey; The Later Works 1925-1953, Volume 4: 1929, edited by Jo Ann Boydston. Carbondale: Southern Illinois University Press, 1988. Originally published in 1929. --. Logic: The Theory of Inquiry. In John Dewey; The Later Works 1925-1953, Volume 12: 1938, edited by JoAnn Boydston. Carbondale: Southern Illinois University Press, 1986. Originally published in 1938. Diggins, John Patrick. The Promise of Pragmatism. Chicago: University of Chicago Press, 1994. Drake, Durant, et al. Essays in Critical Realism. New York: P. Smith, 1920. Lawson, Tony. Economics and Reality. London: Routledge, 1997. --. \"Should Economics Be an Evolutionary Science? Veblen's Concern and Philosophical Legacy.\" Journal of Economic Issues 36 Oune 2002): 279-292. --. \"Institutionalism: On the Need to Firm up Notions of Social Structure and the Human Subject.\" Journal of Economic Issues 37 (March 2003): 175-207. Maki, Uskali. \"On the Problem of Realism in Economics.\" Riceche Economiche 43,1-2 (1989): 176-198. Rorty, Richard. Philosophy and the Mirror of Nature. Princeton, N.J.: Princeton University Press, 1979. Tool, Marc. The Discretionary Economy. Santa Monica, Calif.: Goodyear Publishing, Inc., 1979.

Evolutionary Game Theory and Thorstein Veblen’s Evolutionary Economics: Is EGT Veblenian?

Abstract: This essay provides an approach to the analysis of the link between Thorstein Veblen's evolutionary approach and evolutionary game theory (EGT). We shed some light on the potential contribution of Veblen's theory of socioeconomic evolution to the discussion on the application of EGT to social environments. We also investigate to what extent elements of EGT can be used to formalize some of the basic evolutionary principles proposed by Veblen. The methodological imperatives laid down by Veblen, defining an evolutionary approach, are presented. We provide an analytical framework that allows the evaluation of EGT in terms of Veblen's evolutionary approach. To better understand the main principles and rationale behind EGT and how it can be applied as a tool for analyzing issues on the diversity, interaction, and evolution of social systems, we discuss this nontraditional approach and its basic concepts. Finally, the main characteristics of EGT are contrasted with Veblen's principles.

Designing an Environmental Mitigation Banking Institution for Linking the Size of Economic Activity to Environmental Capacity

Abstract: While institutions are a key determinant of economic behavior and new institutions are often formed as a part of an economic policy, a systematic way to design these institutions and test their potential performance before they are created does not exist. I have attempted in this paper to create and test such a design for an environmental mitigation banking system using system dynamics modeling and computer simulation. Experimentation with my model suggests that a mitigation banking institution established in the market with the mandate of adding value to environment is able to balance human activity with environmental capacity and yield an optimal price for the mitigation credits without inputs from engineering methods connecting price to cost of mitigation. The delays associated with engineering calculations, when they are used to determine price, would curtail human activity by stifling its multiplier effects. Subsidization of mitigation banking would indirectly support human activity by reducing the price of credits, but for the same budget, direct subsidies support human activity more than the market-based subsidies. Connecting credit requirements to environmental conditions introduces instability in all cases due to the delays involved in this process. The experimental method used to test the efficacy of the mitigation banking system in this paper is seen in general to be a valuable process for mobilizing the powerful concept of institutional change for creating operational plans.

A model of Network Capitalism: Basic Ideas and Post-Soviet Evidence

Abstract: (2004) A Model of Network Capitalism: Basic Ideas and Post-Soviet Evidence Journal of Economic Issues: Vol 38, No 1, pp 85-111

Governance and the legitimacy of Corporate Power: A Path for Convergence of Heterodox Economics?

Abstract: (2004). Governance and the legitimacy of Corporate Power: A Path for Convergence of Heterodox Economics? Journal of Economic Issues: Vol. 38, Papers From The 2004 AFEE Meeting, pp. 363-370.

Literacy and Women’s Empowerment in Indonesia: Implications for Policy

Abstract: One of the most important topics in development economics is education. Education, at a minimum having the capability to read and write, not only gives people skills that help them make a living but also opens opportunities for them to think and communicate and experience life more fully. Neoclassical development economists tend to emphasize the former in terms of investments in human capital and their positive effects on development through increased economic growth. Amartya Sen, while recognizing both, combined their effect on people as expanding their freedoms in his vernacular of "development as freedom" (1999). As the relevance of gender to understanding development and economics has become recognized, educational differences between the genders have been noted and the disparity in literacy and educational opportunities for females compared with males has become a public policy issue in developing countries. One of the 2000 United Nations millennium goals is to achieve primary education for every child by 2015. Additionally, a goal to "promote gender equality and empower women" focuses on eliminating the gender disparity in primary and secondary education (UN 2000). These goals are designed to provide for future growth and prosperity in developing countries and to reduce gender inequality in the longer run. Because education for females often has the additional benefit of lowering fertility, special attention is paid to policies aimed toward educating girls. This emphasis on girls' education, however, overlooks much of the current working population of women who are beyond the traditional age for primary schooling. The most relevant type of education for women is

The Role of the Press in a Democracy: Heterodox Economics and the Propaganda Model

Abstract: The central thesis of this paper is that there is need to reinstitute the public purpose requirement for broadcast licensing. On that path, this paper develops an instrumentalist concept of democracy and from there expands to evaluate the ideological function of the press. With a conceptualization of democracy and the press's role established, this paper addresses what is interfering with the news media's ability to inform and educate the citizenry and the consequences of this corruption of media democracy. Recent deregulation and concentration of ownership of media, and controversies concerning the reporting of the war in Iraq have cast doubt on the independence of the press and the vitality and viability of American democracy. In this light, Edward Herman and Noam Chomsky's propaganda model (1988) deserves further consideration. It also is important to examine Karl Polanyi's protective response to the media democracy crisis: the citizenry's dramatic attempts to change the trajectory of news away from corporate serfdom to a renewed sense of public purpose. In addition, this paper contends that the retrenchment of the public interest standard makes it necessary to reestablish that standard based on a democracy criterion as a requirement for continued free use of the broadcast spectrum.

Veblen’s Theory of Finance Capitalism and Contemporary Corporate America

Abstract: One of the myths of U.S. capitalism is that major economic organizations (corporations) exist principally to develop and produce products and services for the benefit and use of consumers and other businesses. This is how they are alleged to earn their keep. When they do a good job they are supposed to be rewarded by sales and repeat sales to loyal customers, who value both the quality of the goods and the services received. If the businesses fail to do this faithfully, they are expected to lose sales and money. Eventually, if they do not improve, they are supposed to go out of business. Thorstein Veblen's theories of business enterprise are especially pertinent in the present day economic context for they illuminate what lies behind the current economic debacle in the United States. Allegations of financial mismanagement, corporate book "cooking," and insider trading currently rage in the United States. 'What was originally proclaimed to be one or two rogue corporations, and their executives, enriching themselves and their friends and minions now has become a flood of reported ill-gotten gains and financial irregularities. The fingers of greed and fraud even point to the nation's CEO and his deputy CEO and possibly to other members of his cabinet, many of whom are former corporate executives (Rich 2002; "Bush Defends" 2002; Mike Allen, "Bush Urges 'New Ethic' for Execs," Arlington Star-Telegram, July 10, 2002, and

Rural Entrepreneurs in Russia and the Ukraine: Origins, Motivations, and Institutional Change

Abstract: One of the key issues confronting both Russia and the Ukraine during the transformation process is the emergence of economic agents that could operate in a market economy. The origin and motivation of entrepreneurship are fundamental issues for researchers and policy makers. However, a historical hostility toward private business-that in large parts of Russia and the Ukraine predates socialism-combined with a shortage of capital and the skills necessary to engage in the process of business enterprise underline the magnitude of the task of generating entrepreneurial talent. In response, there has been a growing body of literature exploring these questions (Agreev et al. 1995; Green et al. 1996; Shulus 1996; Radaev 1997, 2001; Kusnezova 1999, Luthans et al. 2000; Smallbone and Welter 2001). Not unexpectedly the bulk of this literature drew upon the experience of socio-economic milieus that were at the forefront of the transformation process. These included capital cities and major regional centers, where there was greater opportunity for the realization of entrepreneurial talent than in geographically peripheral and sparsely populated environments. None of the previous works, published in English, address directly the issue of entrepreneurship in a rural setting. One plausible explanation for the neglect of rural entrepreneurs is that rurality "does not matter at the early stages of reform." This means that the main constraints in the emergence of entrepreneurs emanate from the magni-

Endogenous Preferences and Embeddedness: A Reappraisal of Karl Polanyi

Abstract: Karl Polanyi's contributions to social theory are widely recognized among the generality of social sciences. In the fields of economic anthropology, historical and economic sociology, and economic history, Polanyi's work, in particular The Great Transformation, is considered classic.1 In this article I want to explore the relevance of Polanyi's contributions to economics in general and to the issue of endogeneity of human preferences in particular. Following Bowles 1998, we understand preferences as reasons for behavior or attributes of individuals that (along with their beliefs and capacities) account for the actions they take in a given situation. This is a broad concept of preference that goes beyond tastes to include different types of motives and values-Amartya Sen's (1977) commitments and Albert Hirschman's (1985) meta-preferences. We take preferences to be endogenous in the sense that they are at least partially formed and molded by institutions. According to Geoffrey Hodgson (1988), this issue of endogenous preferences constitutes a "Rubicon Line" that divides neoclassical economics and even some of its critics from an institutionalist approach.

Who Should Control the Firm? Insights from New and Original Institutional Economics

Abstract: Business scandals in the USA, Japan, and Europe have initiated changes in the laws of corporate governance, for instance, the Sarbanes-Oxley Act in the USA, the renewal in the UK on initiative of Derek Higgs, the Cromme-Code in Germany, the Loi de S&curite Financi&re in France, and the Tabaksblat-Code in the Netherlands. These issues are about the question of who should control the firm and how this can be done efficiently. In this paper an overview of the issues in the field is given and theoretical insights offered by new and original institutional economics are discussed. 'What are the guidelines offered by institutional economics when changing the laws and codes concerning the governance of firms?

On Institutional Rationality

Abstract: (2004). On Institutional Rationality. Journal of Economic Issues: Vol. 38, No. 1, pp. 173-188.

The Theory of the Individual in Economics: Identity and Value

Abstract: (2004). The Theory of the Individual in Economics: Identity and Value. Journal of Economic Issues: Vol. 38, No. 4, pp. 1112-1114.

Adam Smith, Allyn Young, and the Division of Labor

Abstract: The division of labor is central to Adam Smith's explanation of growth. l For Smith the division oflabor is the chief source of productivity gains. In his famous pin factory example,2 if each man specializes in some particular aspect of pin making, it renders possible a dramatic increase in total output and output per man. On the other hand, if there is no specialization so that every man is involved in all the aspects of pin making, output and productivity are minimal. Smith in his Wealth of Nations listed three advantages flowing out of the division oflabor: increase in skills and dexterity of each worker, saving of time while going from one kind of work (or process) to another, and, finally, invention of machinery which facilitates and abridges labor. 3 The division of labor itself arises because of the propensity of human beings to truck, barter, and exchange. This tendency is found only in humans, not in animals. Secondly, the full potential of the division oflabor can only be exploited in an exchange economy. In a society of hunters, or in a subsistence economy, or in a rude state of society some kind of exchange is possible but since the total produce exchanged is quite limited, the possibility of the division of labor also becomes limited. Therefore, since the division of labor arises as a result of exchange, it essentially becomes limited by that power which gives rise to it. In other words, the division of labor is limited by the size of the market. Not only Smith's theory of growth but also his theory of international trade was based on the concept of the division oflabor. International trade widens the market and gives vent to the resources which, in the absence of trade, would remain unemployed or underemployed. International trade, by overcoming the narrowness of the domestic market, ensures that the division of labor is carried to the highest perfection. This in turn increases the productive powers of a nation and augments its annual produce to

On Operationalisms and Economics

Abstract: (2004) On Operationalisms and Economics Journal of Economic Issues: Vol 38, No 4, pp 953-968

Veblen and Sweezy on Monopoly Capital, Crises, Conflict, and the State

Abstract: In the 1960s and 1970s there was a revival of non-neoclassical political economy, or heterodox economics, in many nations which has continued to this day. Original institutionalists started their own organization, the Association for Evolutionary Economics (AFEE) in 1965, followed by the Journal of Economic Issues in 1967. Other radicals and Marxists organized the Union for Radical Political Economics (URPE) in 1968 and the Review of Radical Political Economics the following year. In many nations similar organizations and journals were instituted in the 1970s. Post Keynesians started to publish the Cambridge Journal of Economics in England and the Journal of Post Keynesian Economics, inaugurated by Sidney Weintraub and Paul Davidson from the USA. The Association for Social Economics started to become more inclusive and participatory by including many heterodox themes in its Review of Social Economy. It wasn't until the late 1980s that the European Association for Evolutionary Political Economy was formed and the early 1990s when feminists became active in organizing their own International Association for Feminist Economics along with their journal, Feminist Economics. After thirty to forty years of growth, heterodox political economy has really come of age, since now there are more journals and publishers disseminating heterodox themes than one could have imagined in the 1960s.1 Then in the 1990s a whole series of ency-

Embedded Economies, Democracy, and the Public Interest

Abstract: Over the past four decades, observers have lamented the lack of participation in democratic processes among large segments of the U.S. population.! This lack of political engagement seems particularly puzzling, given the growing gap between rich and poor and the preoccupation on the part of many policy makers with policies that benefit a few individuals rather than the public. Economists, political analysts, and pundits have analyzed these issues extensively, with the problem attributed either to flaws in the political system or to failings on the part of the citizenry (Winders 1999; Neuborne 2001). In this paper, we suggest an alternative, economic explanation. Specifically, we argue that the decline of democratic participation and the increased power of private rather than public interest in the formation of policy are characteristics of a disembedded economy. We begin our argument with the concept of disembeddedness as developed by Karl Polanyi (1957a, b) and others. The purpose of this section is to present our definition of a disembedded economy. In the following section, we explain how disembeddedness results in the relegation of democracy and the public interest to the "noneconomic" sphere of social life. We then turn from the disembedded economy to a discussion of an embedded economy. Specifically, we ask whether embeddedness would result in an economy that gives primacy to the public interest, where the meaning of "public interest" is determined by the full and active participation of all members of society. Finally, we close with some comments on the current disembeddedness of the U.S. economy and future prospects for policies in the public interest.

Deeply rooted traditions and the will to change : Problematic conflicts in three Swedish health care organizations

Abstract: Deeply rooted traditions and the will to change : Problematic conflicts in three Swedish health care organizations

Cultural Contradictions of Global Capitalism

Abstract: In The Cultural Contradictions of Capitalism, Daniel Bell (1976) found that the decline of the bourgeois value system was brought about largely by the bourgeois economic system itself. In his opinion, the traditional values of American capitalism associated with the puritan temper and the protestant ethic were, from perhaps the 1960s onward, in conflict with the rising postmodern temper of the avant-garde and the "different." He believed that the economic system promoted avant-garde cultural values into the mainstream of the realm of cultural industries and that this was in conflict with the spirit of work, trust, and stability. The capitalist economic system, therefore, necessarily propelled a cultural fabric that was against capitalism, and this was said to lead to many problems of system reproducibility. Advances in hedonism, "being all that one can," a consumption ethic, sexual liberty, and status emulation were in contradiction with the old values of frugality, industry, justice, modesty, and humility; and this would lead to many problems for capitalism. As a consequence, capitalism is said to have no coherent moral or philosophical doctrine to spur the system into motion as a positive motivational and inspirational force. The ideas for this book were developed before the contradictions started to impact materially on the system, an early version of the idea emerging in 1969-70. Since Bell wrote this work others have proffered an account of the dominant cultural contradictions of capitalism (e.g., see Stanfield 1995), but Bell was one of the first to analyze such contradictions in the late twentieth century. However, his threefold dichotomy between social structure (economy), polity, and culture hardly helps comprehend the generalized cultural contradictions of the system, since for him culture is defined primarily as the

The Three Laws of Thermodynamics and the Theory of Production

Abstract: (2004). The Three Laws of Thermodynamics and the Theory of Production. Journal of Economic Issues: Vol. 38, No. 1, pp. 201-226.

Ceremonialism, Intellectual Property Rights, and Innovative Activity

Abstract: One of the tenets of institutionalism is that innovation is of prime importance in driving social progress (Ayres (1944)1978). To Clarence Ayres, innovation was the process of creating a \"novel combination of existing devices and materials in such a fashion as to constitute a new device or a new material or both\" (113). He went so far as to define this tool-combination principle as a \"law of progress\" (119). One implication of Ayres' .\"lawof progress\" is that retardation of technological innovation would retard or halt sociaV cultural progress. To the extent that the innovative process becomes ceremonially encapsulated, there is potential to slow the interaction and application of technology and, thus, slow the pace of social progress. Ayres' respect for technical innovation is shared by others. Historically, Robert Heilbroner found that \"looking back over the vast process of capital accumulation which ... lifted first England and then America into the long flight of industrial development, there is little doubt that the impelling force was the succession of inventions and innovations which successively opened new aspects of nature to human control\" (1962, 99). More recently, Norwegian Minister of Finance Sigbjorn Johnsen told the OECD Conference on Creativity, Innovation, and Job Creation that \"history tells us that innovation and change is the prime engine of human progress\" (1996). likewise, the sitting U.S. president recognizes the importance of technological innovation. George W. Bush said, \"In this century, the greatest environmental progress will come about not through endless lawsuits or command-and-control regulations, but through technology and innovation\" (2003). Recognizing the importance of innovation, the granting of intellectual property rights (IPRs) has been long viewed as one way to encourage innovators to innovate.

John Rae and Thorstein Veblen

Abstract: (2004). John Rae and Thorstein Veblen. Journal of Economic Issues: Vol. 38, No. 3, pp. 765-786.

Conflicting Views: Neoclassical, Porterian, and Evolutionary Approaches to the Analysis of the Environmental Regulation of Industrial Activity

Abstract: The current European Union approach to environmental regulation aims to ensure that firms achieve continuous improvement in environmental performance and explicitly encourages firms to integrate environmental concerns into production technology. Such approaches to minimizing pollution often lead to economic as well as environmental benefits. The possibility that regulation can generate a "win win" solution, achieving both environmental protection and economic gains, is rejected by neoclassical environmental economists. Using the neoclassical model of a profit-maximizing firm with perfect information, neoclassical environmental economists argue that profit-maximizing cleaner technology will be adopted by profit-maximizing firms without requiring a regulatory stimulus: regulation can only act as a constraint on firms. Both this argument and its underpinning theory of the firm have been challenged by Michael Porter and Claus van der Linde (Porter 1991; Porter and van der Linde 1995a, 1995b), who have argued that regulation can promote competitiveness-enhancing technical change. "Companies operate in the real world of dynamic competition, not in the static world of much economic theory. They are constantly finding innovative solutions to pressures of all sorts-from competitors, customers, and regulators" (1995a, 120). Porterian firms cannot pursue profit-maximizing behavior; they face problems of information, control, and organizational inertia. With this conception of the firm there is a role for regulation in directing the attention of firms: "strict product regulations can

Outcomes Assessment in Trade Policy Analysis: A Note on the Welfare Propositions of the “Gains from Trade”

Abstract: It is rarely acknowledged that any of a number of what ethicists term objects of value could be used for outcomes assessment in trade policy analysis. These might include consumption of various commodities and services, workplace qualities, environmental outcomes, or certain human functionings. In practice, however, trade economists have embraced what Jagdish Bhagwati, Arvind Panagriya, and T. N. Srinivasan (1998) have accurately termed the "traditional" approach, in which the only recognized object of value is the utility of consumption levels of commodities and services. In practice (e.g., in applied trade policy modeling), there is a further restriction to legally consumed commodities and services, a distinction which, in light of significant international flows in illegal drugs, weaponry, and sexual services, is not as insignificant as one might first believe. Interestingly, there has been no real attempt to justify the identification of the utility of consumption of legally consumed commodities and services as the most appropriate choice, and this note makes no such attempt. Rather, it simply makes explicit some key welfare propositions underlying the traditional approach to what international economists term the gains from trade, widely acknowledged to be the most fundamental analytical contribution of international economics. 1 Making explicit these welfare propositions has the advantage of revealing why certain controversies in contemporary international trade policy have arisen. In short, these controversies reflect differences over appropriate objects of value. It is worth repeating that, in principle, appropriate objects of value for trade policy analysis could include consumption of various commodities and services, workplace qualities, environmental outcomes, or certain human functionings. International trade theory rejects all but one of these potential evaluative spaces. In what follows, we try to trace the rejection process and relate it to accepted perspectives in moral philosophy. This process consists of the following steps: teleological restriction, subjectivist assertion, and objectivist limitations, the last two co-existing uncomfortably from a methodological perspective. In what follows, we take up each of these steps in turn.

Policy Orthodoxies, the Minimum Wage, and the Challenge of Social Science

Abstract: (2004). Policy Orthodoxies, the Minimum Wage, and the Challenge of Social Science. Journal of Economic Issues: Vol. 38, No. 1, pp. 139-154.

Assessing Deregulation: The Clash between Promise and Reality

Abstract: There is a general consensus that public utility services such as electricity, natural gas, telecommunications, and water are an integral part of the infrastructure of modern soci ety. These services are typically provided by complex systems of capital-intensive networks that link centralized supply with a wide range of diverse customer classes. Accessibility to these services becomes critical if each sector of society is to realize the maximum potential gain to be derived from the employment of these services to enhance productivity, income growth, and the attainment of societal goals. While there may be agreement on the relationship between public utilities as infrastructure and the gains to society, there is no consensus regarding the appropriate organization and governance of the industries supplying these services. For more than 100 years there has been a sharp dichotomy between those who would have government play a major role through direct intervention and regulation, and those who would leave the development and operation of these industries to private initiative within the context of free market incentives and penalties. Among the earliest proponents of government regulation were the institutional economists who played a significant role in shaping the content and form of regulation during the Progressive and New Deal eras. Institutionalists participated in developing new regulatory commissions, the methods of control, and the adaptation of the regulatory process to changing industry structures. By the 1940s, the work of the institutionalists had become well accepted as a part of the regulatory framework that had been put in place at the federal and state levels. A central feature of the institutionalist approach continues to be a belief in the need for government intervention to constrain market power and assure full access to utility services for all types of