Institutions and the Economy examines how institutions – understood as the formal and informal rules and practices that surround us as we go about our daily lives – enable and shape economic life. Institutions impact consumer preferences, the actions and processes of firms, wealth and poverty in countries, the growth of international trade, and much more. Indeed, none of the preconditions for economic activity – such as the existence of buyers and sellers, recognizable goods and services, and the information we need to make choices – would be in place without institutions.
These insights challenge some of the most basic postulates on modern economic theory, which either minimizes the role of institutions in the economy or views them as factors that help primarily by promoting efficiency. Synthesizing and refining the central concepts developed by economic sociologists during the last twenty years, this book is essential reading for anyone interested in understanding how economic life unfolds from the individual to the transnational levels.
Francesco Duina is professor of sociology at Bates College, visiting professor in the Department of Business and Politics at the Copenhagen Business School, and the author of Institutions and the Economy.