Institutions in Economics

The Old and the New Institutionalism

Institutions in Economics

This book examines and compares the two major traditions of thought that have attempted to incorporate institutions within economics. These are the "Old" (or American) Institutionalist tradition of Veblen, Mitchell, Commons and Ayres, and the "New" Institutionalism that has developed more recently from neoclassical and Austrian sources. The discussion is organized around a set of key problems involving the use of formal or nonformal analytical methods, individualist or holistic approaches, the respective roles of rational choice and rule following behavior, the relative importance of spontaneous evolution and deliberative design of institutions, and questions relating to the normative appraisal of institutions.


"This is clearly a book which anyone seriously interested in economic institutions should read. It is well organized, clearly written, and short. For these reasons, it would be suitable for courses with an institutional, organizational, or methodological focus in any of the social sciences. Readers interested in the new institutional economics, even if they have no acquaintance with 'old' institutionalism, are particularly likely to benefit from Rutherford's systematic and well-informed exposition." Canadian Journal of Economics

"Malcolm Rutherfors has written a book that should be required reading for institutionalists--both old (OIE) and new (NIE)--and for all other economists as well." Journal of Economic Issues

"Rutherford has three objectives: discuss the general problems of how to deal with institutions, describe and evaluate the old (OIE) and the new (NIE) institutional economics, and suggest a better treatment. He has written an excellent, stimulating book....He deserves praise for his even-handed, scholarly review of the literature and his quest for the underlying theory that encompasses both traditions." Louis De Alessi, Journal of Economic Literature

"Institutions in Economics is an exemplary book along many dimensions. It is first-rate reading of an extensive literature on the problems of incorporating institutions within economic theory and, as such, is a work that should be of considerable interest not only to historians of economic thought but also to contemporary theorists. It is also a model of scholarly civility between divergent styles of thought. Rutherford has produced a well-written, well-balanced, comprehensive work. In short, nstitutions in Economics is a first-rate contribution to the literature on historical perspectives on modern economics." History of Political Economy

"...Rutherford and the other authors do a good job..." Alan W. Dyer, Review of Political Economy