Institutionalism and neoclassical economics in brief. Neoclassicalism and institutionalism: a comparative analysis. Ideas put forward by Keynes

COURSE WORK

Neoclassicalism and institutionalism: comparative analysis

Introduction

The course work is devoted to the study of neoclassicism and institutionalism, both at the theoretical level and in practice. This topic is relevant; in modern conditions of increasing globalization of socio-economic processes, general patterns and trends in the development of economic entities, including organizations, have emerged. Organizations as economic systems are studied from the perspective of various schools and directions of Western economic thought. Methodological approaches in Western economic thought are represented mainly by two leading directions: neoclassical and institutional.

Objectives of studying coursework:

get an idea of the emergence, formation and modern development of neoclassical and institutional economic theory;

become familiar with the main research programs of neoclassical and institutionalism;

show the essence and specificity of the neoclassical and institutional methodology for studying economic phenomena and processes;

Objectives of studying coursework:

give a holistic idea of the basic concepts of neoclassical and institutional economic theory, show their role and significance for the development of modern models of economic systems;

understand and assimilate the role and importance of institutions in the development of micro- and macrosystems;

acquire skills in economic analysis of law, politics, psychology, ethics, traditions, habits, organizational culture and codes of economic conduct;

determine the specifics of the neoclassical and institutional environment and take it into account when making economic decisions.

The subject of study of neoclassical and institutional theory is economic relations and interactions, and the object is neoclassicism and institutionalism as the basis of economic policy. When selecting information for the course work, the views of different scientists were considered in order to understand how ideas about neoclassical and institutional theory changed. Also, when studying the topic, statistical data from economic journals was used, and literature from recent publications was used. Thus, the course work information is compiled using reliable sources of information and provides objective knowledge on the topic: neoclassicism and institutionalism: a comparative analysis.

1. Theoretical provisions of neoclassicism and institutionalism

.1 Neoclassical economic theory

The emergence and evolution of neoclassicism

Neoclassical economics emerged in the 1870s. The neoclassical direction studies the behavior of an economic person (consumer, entrepreneur, employee) who seeks to maximize income and minimize costs. The main categories of analysis are limit values. Neoclassical economists developed the theory of marginal utility and the theory of marginal productivity, the theory of general economic equilibrium, according to which the mechanism of free competition and market pricing ensures fair distribution of income and full use of economic resources, the economic theory of welfare, the principles of which form the basis of the modern theory of public finance (P Samuelson), the theory of rational expectations, etc. In the second half of the 19th century, along with Marxism, neoclassical economic theory emerged and developed. Of all its many representatives, the most famous was the English scientist Alfred Marshall (1842-1924). He was Professor and Head of the Department of Political Economy at Cambridge University. A. Marshall summarized the results of new economic research in the fundamental work “Principles of Economic Theory” (1890). In his works, A. Marshall relied on both the ideas of classical theory and the ideas of marginalism. Marginalism (from the English marginal - limit, extreme) is a movement in economic theory that arose in the second half of the 19th century. Marginal economists in their studies used marginal values, such as marginal utility (the utility of the last, additional unit of good), marginal productivity (products produced by the last hired worker). These concepts were used by them in the theory of price, the theory of wages and in explaining many other economic processes and phenomena. In his theory of price, A. Marshall relies on the concepts of supply and demand. The price of a good is determined by the relationship between supply and demand. The demand for a good is based on subjective assessments of the marginal utility of the good by consumers (buyers). The supply of a good is based on production costs. The manufacturer cannot sell at a price that does not cover its production costs. If classical economic theory considered price formation from the position of the producer, then neoclassical theory considers pricing both from the position of the consumer (demand) and from the position of the producer (supply). Neoclassical economic theory, just like the classics, is based on the principle of economic liberalism, the principle of free competition. But in their research, neoclassicists place greater emphasis on the study of applied practical problems, using quantitative analysis and mathematics to a greater extent than qualitative (substantive, cause-and-effect). The greatest attention is paid to the problems of efficient use of limited resources at the microeconomic level, at the enterprise and household levels. Neoclassical economic theory is one of the foundations of many areas of modern economic thought.

The main representatives of neoclassicism

A. Marshall: Principles of Political Economy

It was he who introduced the term “economics” into use, thereby emphasizing his understanding of the subject of economic science. In his opinion, this term more fully reflects research. Economic science examines the economic aspects of the conditions of social life and the incentives for economic activity. Being a purely applied science, it cannot ignore practical issues; but economic policy issues are not its subject. Economic life must be considered outside of political influences, outside of government intervention. There were discussions among economists about the source of value: labor costs, utility, and production factors. Marshall took the debate to a different plane, coming to the conclusion that it was necessary not to look for the source of value, but to study the factors that determine prices, their level, and dynamics. The concept developed by Marshall was a compromise between various areas of economic science. The main idea put forward by him is to switch efforts from theoretical disputes around value to studying the problems of interaction between supply and demand as forces that determine processes occurring in the market. Economic science studies not only the nature of wealth, but also the incentives for economic activity. “Economist's scales” - monetary estimates. Money measures the intensity of incentives that motivate a person to act and make decisions. The analysis of individual behavior forms the basis of the “Principles of Political Economy”. The author's attention is focused on considering the specific mechanism of economic activity. The mechanism of a market economy is studied first of all at the micro level, and subsequently at the macro level. The postulates of the neoclassical school, at the origins of which Marshall stood, represent the theoretical basis for applied research.

J.B. Clark: Theory of Income Distribution

The classical school considered the problem of distribution as an integral element of the general theory of value. Prices of goods consisted of shares of remuneration of production factors. Each factor had its own theory. According to the views of the Austrian school, factor incomes were formed as derivatives of market prices for manufactured products. An attempt to find a common basis for the value of both factors and products on the basis of common principles was made by economists of the neoclassical school. The American economist John Bates Clark set out to “show that the distribution of social income is regulated by social law and that this law, if it operated without resistance, would give to each factor of production the amount that that factor creates.” Already in the formulation of the goal there is a summary - each factor receives the share of the product that it creates. All subsequent contents of the book represent a detailed rationale for this summary - argument, illustrations, comments. In an effort to find a principle of income distribution that would determine the share of each factor in the product, Clark uses the concept of diminishing utility, which he transfers to factors of production. In this case, the theory of consumer behavior, the theory of consumer demand is replaced by the theory of the choice of production factors. Every entrepreneur strives to find a combination of factors used that ensures a minimum of costs and a maximum of income. Clark argues as follows. Two factors are taken, if one of them is taken unchanged, then the use of the other factor as its quantitative increase will bring less and less income. Labor brings its owner wages, capital - interest. If additional workers are hired with the same capital, then income increases, but not in proportion to the increase in the number of new workers.

A. Pigou: economic theory of welfare

The economic theory of A. Pigou examines the problem of distribution of national income, in Pigou's terminology - the national dividend. He includes “everything that people buy with their monetary income, as well as the services provided to a person by the home that he owns and in which he lives.” However, services provided to oneself and in the household, and the use of items in public ownership, are not included in this category.

The national dividend is the flow of goods and services produced in a society during the year. In other words, this is the share of society’s income that can be expressed in money: goods and services that are part of final consumption. If Marshall appears before us as a taxonomist and theorist, striving to cover the entire system of relations of the “economix,” then Pigou was primarily engaged in the analysis of individual problems. Along with theoretical issues, he was interested in economic policy. He was interested, in particular, in the question of how to reconcile private and public interests and combine private and public costs. Pigou's focus is on the theory of social welfare, it aims to answer what is the common good? How is it achieved? How is the redistribution of benefits carried out from the standpoint of improving the situation of members of society; especially the poorest. The construction of a railway provides benefits not only to those who built and operate it, but also to the owners of nearby land plots. As a result of the construction of the railway, the price of land located near it inevitably increases. Owners of land participants, although they were not involved in construction, are benefiting due to rising land prices. The overall national dividend also increases. The criterion that must be taken into account is the dynamics of market prices. According to Pigou, “the main indicator is not the product itself or material goods, but in relation to the conditions of a market economy - market prices.” But the construction of a railway can be accompanied by negative and very undesirable consequences, a deterioration of the environmental situation. People will suffer from noise, smoke, and garbage.

The “piece of iron” harms crops, reduces yields, and undermines product quality.

The use of new technology often gives rise to difficulties and creates problems that require additional costs.

Limits of applicability of the neoclassical approach

Neoclassical theory is based on unrealistic assumptions and limitations, and, therefore, it uses models that are inadequate to economic practice. Coase called this state of affairs in neoclassical theory “blackboard economics.”

Economic science expands the range of phenomena (for example, such as ideology, law, norms of behavior, family) that can be successfully analyzed from the point of view of economic science. This process was called “economic imperialism”. The leading representative of this trend is Nobel laureate Harry Becker. But for the first time, Ludwig von Mises wrote about the need to create a general science that studies human action, proposing the term “praxeology” for this purpose.

Neoclassical hard core and protective belt

Hard core :

Stable preferences that are endogenous;

Rational choice (maximizing behavior);

Equilibrium in the market and general equilibrium in all markets.

Protective belt:

Property rights remain unchanged and clearly defined;

The information is completely accessible and complete;

Individuals satisfy their needs through exchanges that occur without costs, taking into account the initial distribution.

1.2 Institutional economics

The concept of an institution. The role of institutions in the functioning of the economy

The concept of institution was borrowed by economists from the social sciences, in particular from sociology. An institution is a set of roles and statuses designed to satisfy a specific need. Definitions of institutions can also be found in works of political philosophy and social psychology. For example, the category of institution is one of the central ones in John Rawls’s work “A Theory of Justice.” Institutions mean a public system of rules that define office and position with corresponding rights and responsibilities, power and immunities, and the like. These rules specify certain forms of action as permissible and others as prohibited, and they punish certain actions and protect others when violence occurs. As examples, or more general social practices, we can cite games, rituals, courts and parliaments, markets and property systems.

In economic theory, the concept of institution was first included in analysis by Thorstein Veblen. Institutions are a common way of thinking as regards the particular relations between society and the individual and the particular functions they perform; and the system of social life, which is composed of the totality of those acting at a certain time or at any moment in the development of any society, can, from the psychological side, be characterized in general terms as the prevailing spiritual position or the widespread idea of \u200b\u200bthe way of life in society.

Veblen also understood institutions as:

behavioral habits;

structure of the production or economic mechanism;

the currently accepted system of social life.

Another founder of institutionalism, John Commons, defines institution as follows: institution - collective action to control, liberate and expand individual action.

Another classic of institutionalism, Wesley Mitchell, has the following definition: institutions are dominant, and highly standardized, social habits. Currently, within the framework of modern institutionalism, the most common interpretation of institutions is Douglas North: Institutions are rules, mechanisms that ensure their implementation, and norms of behavior that structure repeated interactions between people.

The economic actions of an individual take place not in an isolated space, but in a certain society. And therefore it is of great importance how society will react to them. Thus, transactions that are acceptable and profitable in one place may not necessarily be viable even under similar conditions in another. An example of this is the restrictions imposed on human economic behavior by various religious cults. In order to avoid the coordination of many external factors that influence success and the very possibility of making a particular decision, within the framework of economic and social orders, schemes or algorithms of behavior are developed that are the most effective under given conditions. These schemes and algorithms or matrices of individual behavior are nothing more than institutions.

Traditional institutionalism

“Old” institutionalism, as an economic movement, arose at the turn of the 19th and 20th centuries. He was closely connected with the historical direction in economic theory, with the so-called historical and new historical school (F. List, G. Schmoler, L. Bretano, K. Bücher). From the very beginning of its development, institutionalism was characterized by upholding the idea of social control and intervention of society, mainly the state, in economic processes. This was the legacy of the historical school, whose representatives not only denied the existence of stable deterministic connections and laws in the economy, but were also supporters of the idea that the welfare of society can be achieved on the basis of strict state regulation of the nationalist economy. The most prominent representatives of “Old Institutionalism” are: Thorstein Veblen, John Commons, Wesley Mitchell, John Galbraith. Despite the significant range of problems covered in the works of these economists, they were unable to form their own unified research program. As Coase noted, the work of American institutionalists came to nothing because they lacked a theory to organize the mass of descriptive material. Old institutionalism criticized the provisions that constitute the “hard core of neoclassicalism.” In particular, Veblen rejected the concept of rationality and the corresponding principle of maximization as fundamental in explaining the behavior of economic agents. The object of analysis is institutions, not human interactions in space with the restrictions that are set by institutions. Also, the works of old institutionalists are distinguished by significant interdisciplinarity, being, in fact, continuations of sociological, legal, and statistical research in their application to economic problems.

Neo-institutionalism

Modern neo-institutionalism originates from the works of Ronald Coase “The Nature of the Firm”, “The Problem of Social Costs”. The neo-institutionalists attacked first of all the provisions of neoclassicism, which constitute its defensive core.

) First, the premise that exchange occurs without costs has been criticized. Criticism of this position can be found in Coase's early works. Although, it should be noted that Menger wrote about the possibility of the existence of exchange costs and their influence on the decisions of exchanging subjects in his “Foundations of Political Economy.” Economic exchange occurs only when each participant, carrying out an act of exchange, receives some increase in value to the value of the existing set of goods. This is proven by Carl Menger in his work “Foundations of Political Economy”, based on the assumption of the existence of two participants in the exchange. The concept of transaction costs contradicts the thesis of neoclassical theory that the costs of functioning of the market mechanism are equal to zero. This assumption made it possible not to take into account the influence of various institutions in the economic analysis. Therefore, if transaction costs are positive, it is necessary to take into account the influence of economic and social institutions on the functioning of the economic system.

) Secondly, recognizing the existence of transaction costs, there is a need to revise the thesis about the availability of information (information asymmetry). Recognition of the thesis about the incompleteness and imperfection of information opens up new prospects for economic analysis, for example, in the study of contracts.

) Thirdly, the thesis about the neutrality of the distribution and specification of property rights was revised. Research in this direction served as a starting point for the development of such areas of institutionalism as the theory of property rights and economics

organizations. Within the framework of these directions, subjects of economic activity “economic organizations have ceased to be viewed as “black boxes”. Within the framework of “modern” institutionalism, attempts are also being made to modify or even change the elements of the hard core of neoclassics. First of all, this is the neoclassical premise of rational choice. In institutional economics, classical rationality is modified by accepting assumptions of bounded rationality and opportunistic behavior. Despite the differences, almost all representatives of neo-institutionalism view institutions through their influence on the decisions made by economic agents. The following fundamental tools related to the human model are used: methodological individualism, utility maximization, bounded rationality and opportunistic behavior. Some representatives of modern institutionalism go even further and question the very premise of the utility-maximizing behavior of economic man, proposing its replacement by the principle of satisfaction. In accordance with the classification of Tran Eggertsson, representatives of this direction form their own direction in institutionalism - the new institutional economics, the representatives of which can be considered O. Williamson and G. Simon. Thus, the distinctions between neo-institutionalism and new institutional economics can be drawn depending on which premises are replaced or modified within their framework - the “hard core” or the “protective belt”.

The main representatives of neo-institutionalism are: R. Coase, O. Williamson, D. North, A. Alchian, Simon G., L. Thévenot, Menard K., Buchanan J., Olson M., R. Posner, G. Demsetz, S. Pejovic, T. Eggertsson.

1.3 Comparison of neoclassicalism and institutionalism

What all neo-institutionalists have in common is the following: first, that social institutions matter and second, that they can be analyzed using the standard tools of microeconomics. In the 1960-1970s. a phenomenon called “economic imperialism” by G. Becker began. It was during this period that economic concepts: maximization, equilibrium, efficiency, etc. - began to be actively used in such areas related to economics as education, family relations, health care, crime, politics, etc. This led to the fact that the basic economic categories of neoclassics received deeper interpretation and wider application.

Each theory consists of a core and a protective layer. Neo-institutionalism is no exception. Among the basic prerequisites, he, like neoclassicism as a whole, primarily considers:

§ methodological individualism;

§ concept of economic man;

§ activity as exchange.

However, unlike neoclassicism, these principles began to be applied more consistently.

) Methodological individualism. In conditions of limited resources, each of us is faced with choosing one of the available alternatives. Methods for analyzing an individual's market behavior are universal. They can be successfully applied to any area where a person must make a choice.

The basic premise of neo-institutional theory is that people act in every sphere in pursuit of their self-interest, and that there is no insurmountable line between business and the social sphere or politics. 2) The concept of economic man . The second premise of neo-institutional choice theory is the concept of “economic man.” According to this concept, a person in a market economy identifies his preferences with a product. He strives to make decisions that maximize the value of his utility function. His behavior is rational. The rationality of the individual has universal significance in this theory. This means that all people are guided in their activities primarily by the economic principle, i.e. compare marginal benefits and marginal costs (and, above all, benefits and costs associated with decision-making): However, unlike neoclassics, which considers mainly physical (scarcity of resources) and technological limitations (lack of knowledge, practical skill, etc.) etc.), neo-institutional theory also considers transaction costs, i.e. costs associated with the exchange of property rights. This happened because any activity is considered as an exchange.

) Activity as an exchange. Proponents of neo-institutional theory consider any sphere by analogy with the commodity market. The state, for example, with this approach is an arena of competition between people for influence on decision-making, for access to the distribution of resources, for places in the hierarchical ladder. However, the state is a special kind of market. Its participants have unusual property rights: voters can elect representatives to the highest bodies of the state, deputies can pass laws, and officials can monitor their implementation. Voters and politicians are treated as individuals exchanging votes and election promises. It is important to emphasize that neo-institutionalists have a more realistic assessment of the features of this exchange, given that people are characterized by limited rationality, and decision-making is associated with risk and uncertainty. In addition, it is not always possible to make the best decisions. Therefore, institutionalists compare the costs of decision-making not with the situation considered exemplary in microeconomics (perfect competition), but with those real alternatives that exist in practice. This approach can be complemented by the analysis of collective action, which involves considering phenomena and processes from the point of view of interaction not of one individual, but of a whole group of individuals. People can be united into groups based on social or property characteristics, religion or party affiliation. At the same time, institutionalists can even deviate somewhat from the principle of methodological individualism, suggesting that the group can be considered as a final indivisible object of analysis, with its own utility function, limitations, etc. However, a more rational approach seems to be to consider a group as an association of several individuals with their own utility functions and interests.

The institutional approach occupies a special place in the system of theoretical economic directions. Unlike the neoclassical approach, it places emphasis not so much on the analysis of the results of the behavior of economic agents, but on this behavior itself, its forms and methods. Thus, the identity of the theoretical object of analysis and historical reality is achieved.

Institutionalism is characterized by the predominance of explaining any processes, rather than predicting them, as in neoclassical theory. Institutional models are less formalized, so many more different predictions can be made within the framework of institutional forecasting.

The institutional approach is associated with the analysis of a specific situation, which leads to more generalized results. When analyzing a specific economic situation, institutionalists make a comparison not with an ideal one, as in neoclassics, but with another, real situation.

Thus, the institutional approach is more practical and closer to reality. Models of institutional economics are more flexible and can be transformed depending on the situation. Despite the fact that institutionalism does not tend to engage in forecasting, the importance of this theory does not diminish at all.

It should be noted that recently an increasing number of economists have been leaning towards an institutional approach in the analysis of economic reality. And this is justified, since it is institutional analysis that allows us to achieve the most reliable results, close to reality, in the study of the economic system. In addition, institutional analysis is an analysis of the qualitative side of all phenomena.

Thus, G. Simon notes that “as economic theory expands beyond its key sphere of interest - the theory of price, which deals with quantities of goods and money, there is a shift from purely quantitative analysis, where the central role is given to the equalization of marginal values, in the direction of more qualitative institutional analysis, where discrete alternative structures are compared. And by carrying out a qualitative analysis, it is easier to understand how development occurs, which, as was clarified earlier, represents precisely qualitative changes. Having studied the development process, one can pursue positive economic policies with greater confidence.”

In the theory of human capital, relatively little attention is paid to institutional aspects, especially to the mechanisms of interaction between the institutional environment and human capital in an innovative economy. The static approach of neoclassical theory to explaining economic phenomena does not allow us to explain the real processes occurring in the transitional economies of a number of countries, accompanied by a negative impact on the reproduction of human capital. The institutional approach has this opportunity by explaining the mechanism of institutional dynamics and constructing theoretical constructs of the mutual influence of the institutional environment and human capital.

Despite the sufficiency of developments in the field of institutional problems of the functioning of the national economy, in modern economic domestic and foreign literature there are practically no comprehensive studies of the reproduction of human capital based on the institutional approach.

The influence of socio-economic institutions on the formation of the productive abilities of individuals and their further movement through the stages of the reproduction process has still been poorly studied. In addition, the issues of forming the institutional system of society, identifying trends in its functioning and development, as well as the influence of these trends on the qualitative level of human capital require serious study. When determining the essence of an institution, T. Veblen proceeded from two types of phenomena that influence people's behavior. On the one hand, institutions are “habitual ways of responding to stimuli that are created by changing circumstances,” on the other hand, institutions are “special ways of existence of society that form a special system of social relations.”

The neo-institutional direction views the concept of institutions differently, treating them as norms of economic behavior that arise directly from the interaction of individuals.

They form frameworks and restrictions for human activity. D. North defines institutions as formal rules, reached agreements, internal restrictions on activity, certain characteristics of compulsion to fulfill them, embodied in legal norms, traditions, informal rules, and cultural stereotypes.

The mechanism for ensuring the effectiveness of the institutional system is especially important. The degree of consistency between the achievement of goals set by the institutional system and the decisions of individuals depends on the effectiveness of coercion. Coercion, notes D. North, is carried out through the internal limitations of the individual, fear of punishment for violating relevant norms, through state violence and public sanctions. It follows from this that formal and informal institutions are involved in the implementation of coercion.

The functioning of diverse institutional forms contributes to the formation of the institutional system of society. Consequently, the main object of optimizing the process of reproduction of human capital should be recognized not as organizations themselves, but as socio-economic institutions as norms, rules and mechanisms for their implementation, by changing and improving which the desired result can be achieved.

2. Neoclassicalism and institutionalism as the theoretical foundations of market reforms

.1 Neoclassical scenario of market reforms in Russia and its consequences

Just as neoclassical economists believe that government intervention in the economy is ineffective and should therefore be minimal or absent, consider privatization in Russia in the 1990s. Many experts, primarily supporters of the “Washington Consensus” and “shock therapy,” considered privatization the core of the entire reform program, called for its large-scale implementation and the use of the experience of Western countries, justifying the need for the simultaneous introduction of a market system and the transformation of state-owned enterprises into private ones. At the same time, one of the main arguments in favor of accelerated privatization was the assertion that private enterprises are always more efficient than state-owned enterprises, therefore, privatization should be the most important means of redistributing resources, improving management and generally increasing the efficiency of the economy. However, they understood that privatization would face certain difficulties. Among them, the lack of market infrastructure, in particular the capital market, and the underdevelopment of the banking sector, lack of sufficient investment, managerial and entrepreneurial skills, resistance on the part of managers and employees, problems of “nomenklatura privatization”, imperfection of the legislative framework, including in the field of taxation. Proponents of vigorous privatization noted that it was carried out in an environment of high inflation and low growth rates and led to mass unemployment. The inconsistency of reforms and the lack of clear guarantees and conditions for the implementation of property rights, the need to reform the banking sector, the pension system, and the creation of an effective stock market were also pointed out. The opinion of many experts about the need for preconditions for successful privatization, namely the implementation of macroeconomic reforms and the creation of a business culture in the country, seems important. This group of specialists is characterized by the opinion that in Russian conditions it is advisable to widely attract Western investors, creditors and consultants for the successful implementation of measures in the field of privatization. According to many experts, in the conditions of a shortage of private capital, the choice came down to: a) finding a form of redistribution of state property between citizens; b) the choice of a few owners of private capital (often acquired illegally); c) appeal to foreign capital, taking into account restrictive measures. Privatization “according to Chubais” is more likely denationalization than real privatization. Privatization was supposed to create a large class of private owners, but instead “the richest monsters” appeared, forming an alliance with the nomenklatura. The role of the state remains excessive, producers still have more incentives to steal than to produce, the monopoly of producers has not been eliminated, small business is developing very poorly. American specialists A. Shleifer and R. Vishny, based on a study of the state of affairs at the initial stage of privatization, characterized it as “spontaneous.” They noted that property rights were informally redistributed among a limited range of institutional actors, such as the party-state apparatus, line ministries, local authorities, labor collectives and enterprise administrations. Hence the inevitability of conflicts, the reason for which lies in the intersection of the control rights of such co-owners, the presence of many property subjects with uncertain ownership rights.

Real privatization, according to the authors, is the redistribution of control rights over the assets of state-owned enterprises with the mandatory consolidation of property rights of owners. In this regard, they proposed large-scale corporatization of enterprises.

It should be noted that further developments largely followed this path. Large state-owned enterprises were transformed into joint-stock companies, and a process of actual redistribution of property took place.

A voucher system aimed at equal distribution of share capital among the population of a country may not be a bad thing, but there must be mechanisms in place to ensure that share capital is not concentrated in the hands of a “rich minority.” However, in reality, ill-conceived privatization transferred the property of an essentially prosperous country into the hands of a corrupt politically powerful elite.

Russian mass privatization, launched with the aim of eliminating the old economic power and accelerating the restructuring of enterprises, did not produce the desired results, but led to extreme concentration of ownership, and in Russia this phenomenon, usual for the process of mass privatization, took on particularly large proportions. As a result of the transformation of the old ministries and the departmental banks related to them, a powerful financial oligarchy arose. “Property,” writes I. Samson, “is an institution that does not change either by decree or at once. If in the economy we try too hastily to impose private property everywhere through mass privatization, then it will quickly concentrate where there is economic power.”

As T. Weiskopf believes, in the conditions of Russia, where capital markets are completely undeveloped and labor mobility is limited, it is difficult to imagine that exactly the mechanism for industrial restructuring that is highly dependent on the mobility of capital and labor will work. It would be more expedient to create incentives and opportunities to improve the activities of enterprises through the administration and

workers rather than attract outside shareholders.

The early failure to develop a large sector of new enterprises led to significant negative consequences, including making it easier for mafia groups to seize control of a large part of state property. “The main challenge today, as in 1992, is creating an infrastructure that promotes competition. K. Arrow recalls that “under capitalism, the expansion and even maintenance of supply at the same level often takes the form of new firms entering the industry, rather than the development or simple reproduction of old ones; this applies particularly to small-scale and low-capital-intensive industries.” As for the privatization of heavy industry, this process must necessarily be slow, but here too “the priority task is not the transfer of existing capital assets and enterprises into private hands, but their gradual replacement with new assets and new enterprises.

Thus, one of the urgent tasks of the transition period is to increase the number of enterprises at all levels and intensify entrepreneurial initiative. According to M. Goldman, instead of rapid voucher privatization, efforts should have been directed towards stimulating the creation of new enterprises and the formation of a market with an appropriate infrastructure, characterized by transparency, the presence of rules of the game, the necessary specialists and economic legislation. In this regard, the question arises of creating the necessary business climate in the country, stimulating the development of small and medium-sized businesses, and eliminating bureaucratic barriers. Experts note that the state of affairs in this area is far from satisfactory and there is no reason to expect its improvement, as evidenced by the slowdown in growth and even the reduction in the number of enterprises since the mid-90s, as well as the number of unprofitable enterprises. All this requires improving and simplifying regulation, licensing, the tax system, providing affordable credit, creating a network to support small businesses, training programs, business incubators, etc.

Comparing the results of privatization in different countries, J. Kornai notes that the saddest example of the failure of the accelerated privatization strategy is Russia, where all the characteristics of this strategy manifested themselves in extreme form: voucher privatization imposed on the country, coupled with mass manipulations in the transfer of property into the hands of managers and close officials . Under these conditions, instead of “people's capitalism,” there actually occurred a sharp concentration of former state property and the development of an “absurd, perverted and extremely unfair form of oligarchic capitalism.”

Thus, the discussion of the problems and results of privatization showed that its acceleration does not automatically lead to market behavior of enterprises, and the methods of its implementation actually meant ignoring the principles of social justice. Privatization, especially of large industries, requires large-scale preparation, reorganization and restructuring of enterprises. Of great importance in the development of the market mechanism is the creation of new enterprises ready to enter the market, which requires appropriate conditions and support for entrepreneurship. At the same time, one should not overestimate the importance of changes in forms of ownership, which are important not in themselves, but as a means of increasing the efficiency and competitiveness of enterprises.

Liberalization

Price liberalization was the first point of Boris Yeltsin's program of urgent economic reforms, proposed to the V Congress of People's Deputies of the RSFSR, held in October 1991. The liberalization proposal met with the unconditional support of the congress (878 votes in favor and only 16 against).

In fact, radical liberalization of consumer prices was carried out on January 2, 1992 in accordance with the decree of the President of the RSFSR dated December 3, 1991 No. 297 “On measures to liberalize prices,” as a result of which 90% of retail prices and 80% of wholesale prices were exempted from state regulation. At the same time, control over the price level for a number of socially significant consumer goods and services (bread, milk, public transport) was left to the state (and for some of them it still remains). At first, markups on such goods were limited, but in March 1992 it became possible to cancel these restrictions, which most regions took advantage of. In addition to price liberalization, starting in January 1992, a number of other important economic reforms were implemented, in particular, wage liberalization, freedom of retail trade, etc.

Initially, the prospects for price liberalization raised serious doubts because the ability of market forces to determine prices for goods was limited by a number of factors. First of all, price liberalization began before privatization, so that the economy was predominantly owned by the state. Second, the reforms were initiated at the federal level, while price controls had traditionally been exercised at the local level, and in some cases local authorities chose to retain these controls directly, despite the government's refusal to provide subsidies to such regions.

In January 1995, prices for about 30% of goods continued to be regulated in one way or another. For example, the authorities put pressure on privatized shops, taking advantage of the fact that land, real estate and utilities were still in the hands of the state. Local authorities also created barriers to trade, for example by prohibiting the export of food to other areas. Third, powerful criminal groups emerged that blocked access to existing markets and collected tribute through racketeering, thereby distorting market pricing mechanisms. Fourth, poor communications and high transportation costs complicated the ability of companies and individuals to respond effectively to market signals. Despite these difficulties, in practice market forces began to play a significant role in price formation, and imbalances in the economy began to decrease.

Price liberalization has become one of the most important steps towards the transition of the country's economy to market principles. According to the authors of the reforms themselves, in particular Gaidar, thanks to liberalization, the country's stores were filled with goods in a fairly short time, their range and quality increased, and the main prerequisites were created for the formation of market economic mechanisms in society. As Vladimir Mau, an employee of the Gaidar Institute, wrote, “the main thing that was achieved as a result of the first steps of economic reforms was to overcome the commodity deficit and avert the threat of impending famine in the winter of 1991-1992 from the country, as well as to ensure the internal convertibility of the ruble.”

Before the start of reforms, representatives of the Russian Government argued that price liberalization would lead to a moderate increase in prices - an adjustment between supply and demand. According to the generally accepted point of view, fixed prices for consumer goods were lowered in the USSR, which caused increased demand, and this, in turn, caused a shortage of goods.

It was assumed that as a result of the correction, the supply of goods, expressed in new market prices, would be approximately three times higher than the old one, which would ensure economic equilibrium. However, price liberalization was not coordinated with monetary policy. As a result of price liberalization, by mid-1992, Russian enterprises were left with virtually no working capital.

Price liberalization has led to galloping inflation, depreciation of wages, income and savings of the population, increased unemployment, as well as an increase in the problem of irregular payment of wages. The combination of these factors with the economic downturn, increased income inequality and the uneven distribution of earnings between regions has led to a rapid decline in real earnings for a large part of the population and its impoverishment. In 1998, GDP per capita was 61% of the 1991 level - an effect that came as a surprise to the reformers themselves, who expected the opposite result from price liberalization, but which was observed to a lesser extent in other countries where "shock therapy" was carried out "

Thus, in conditions of almost complete monopolization of production, the liberalization of prices actually led to a change in the bodies that set them: instead of the state committee, the monopoly structures themselves began to do this, which resulted in a sharp increase in prices and a simultaneous decrease in production volumes. Price liberalization, which was not accompanied by the creation of restraining mechanisms, led not to the creation of market competition mechanisms, but to the establishment of control over the market by organized criminal groups, extracting excess profits by inflating prices; moreover, the mistakes made provoked hyperinflation of costs, which not only disorganized production, but also led to the depreciation of income and savings of citizens.

2.2 Institutional factors of market reform

market neoclassical institutionalism economic

The formation of a modern, that is, adequate to the challenges of the post-industrial era, system of institutions is the most important prerequisite for achieving the strategic goals of Russia's development. It is necessary to ensure the coordinated and effective development of institutions,

regulating the political, social and economic aspects of the country's development.

The institutional environment necessary for an innovative socially oriented type of development will be formed in the long term within the framework of the following directions. Firstly, political and legal institutions aimed at ensuring the civil and political rights of citizens, as well as the implementation of legislation. We are talking about the protection of basic rights, including the inviolability of person and property, the independence of the judiciary, the effectiveness of the law enforcement system, and freedom of the media. Secondly, institutions that ensure the development of human capital. First of all, this concerns education, healthcare, the pension system and housing. The key problem in the development of these sectors is the implementation of institutional reforms - the development of new rules for their functioning. Thirdly, economic institutions, that is, legislation that ensures the sustainable functioning and development of the national economy. Modern economic legislation must ensure economic growth and structural modernization of the economy. Fourthly, development institutions aimed at solving specific systemic problems of economic growth, that is, rules of the game aimed not at all participants in economic or political life, but at some of them. Fifthly, a strategic management system that allows for the harmonious formation and development of these types of institutions and is aimed at coordinating budgetary, monetary, structural, regional and social policies in solving systemic internal development problems and responding to external challenges. It includes interconnected programs of institutional reforms, long- and medium-term forecasts for the development of the economy, science and technology, strategies and programs for the development of key sectors of the economy and regions, a long-term financial plan and a results-based budgeting system. The basis for sustainable economic growth is formed by the first type of institutions - guarantees of basic rights.

To increase the efficiency of political and legal institutions and ensure the implementation of legislation, it is necessary to solve the following problems:

effective protection of private property, the formation in society of an understanding that the ability to ensure the protection of property is one of the criteria for a favorable investment climate and the effectiveness of government. Particular attention should be paid to suppressing raider seizures of property;

carrying out judicial reform to ensure the effectiveness and fairness of court decisions;

creating conditions under which it would be beneficial for Russian companies to remain in Russian jurisdiction, rather than registering offshore and using the Russian judicial system to resolve disputes, including property disputes;

the fight against corruption not only in government bodies, but also in government institutions that provide social services to the population, and in large economic structures associated with the state (natural monopolies). This requires a radical increase in transparency, changes in the motivation system, countering the criminal use of official position by civil servants for personal interests in order to promote business, the creation of unreasonable administrative restrictions on business, strengthening liability for offenses related to corruption and abuse of official position, including on the basis of indirect signs of corruption;

significantly improving access to information about the activities of government bodies;

adoption of a special program to ensure the openness of the activities of state and municipal authorities, including a clear definition of mechanisms for citizens and enterprises to receive complete information about the decisions they make, as well as careful regulation of the activities of authorities;

preventing excessive government intervention in economic activity;

improving the control and supervision system, which involves reducing administrative restrictions on business activities, ensuring effective regulation of the powers of control (supervision) bodies and increasing guarantees for the protection of the rights of legal entities and individual entrepreneurs during state control (supervision);

eliminating the possibility of using checks and inspections to stop a business and destroy a competitor; increasing the efficiency of state property management, including a consistent reduction in the use of the institution of economic management;

reducing the volume of property in state and municipal ownership, taking into account the tasks of ensuring the powers of state authorities and local governments;

improving the quality and accessibility of public services provided by executive authorities. Relevant measures include clear regulation of the procedure for their provision, implementation of measures aimed at simplifying procedures, reducing transaction and time costs spent by consumers to receive them, as well as the introduction of procedures for assessing the quality of services provided by consumers - citizens and entrepreneurs, the formation of a network of multifunctional centers serving the population and ensuring consumer access to government services online on the Internet (“electronic government”);

Serious institutional changes must occur in sectors that ensure the development of human capital. The development of these sectors and improving the quality of the services they provide requires not only serious financial resources, but, above all, a significant increase in the efficiency of their functioning. Without deep institutional reforms, expanding investment in human capital will not produce the necessary results.

The formation of a modern system of economic institutions involves measures to stimulate competition in the markets for goods and

services, development of market infrastructure, solution of many other problems in order to ensure the effective functioning of the market economy. First of all, it is necessary to ensure the development of a competitive environment as a key prerequisite for the formation of incentives for innovation and increased efficiency based on reducing barriers to entry into markets, demonopolizing the economy, and ensuring equal conditions for competition. For this purpose, it is planned to create a warning and suppression system

actions of the state and business limiting competition, increasing the efficiency of regulation of natural monopolies, ensuring demonopolization and development of competition in the field of limited natural resources, in particular aquatic biological resources and subsoil areas. Important factors for stimulating competition are the removal of barriers to entry into the market - simplification of the system for registering new enterprises,

including the possibility of registering an enterprise via the Internet, excluding the possibility of creating fly-by-night companies; reduction of permitting procedures required to start a business, replacing permitting procedures with a declaration of compliance with established requirements; replacement of licensing for certain types of activities with mandatory liability insurance, financial guarantees or control by self-regulatory organizations.

One of the most important components of the formalized institutional framework for a vast array of economic exchanges is antitrust law, which sets the framework for permissible economic activity in areas that are commonly considered markets.

It is necessary to create an effective system for managing state property while maintaining compliance of the composition of state property with the functions of the state, ensuring openness of information on the effectiveness of property management, improving the management of state shares in joint stock companies, increasing the efficiency of the public sector of the economy, as well as established state corporations and large state holdings in strategic industries. A number of institutional measures are to be implemented to promote the development of small and medium-sized businesses. Simplifying access for small businesses to the purchase and rental of real estate, expanding the microcredit system, reducing the number of control and supervisory activities carried out in relation to small businesses, reducing business costs associated with these activities, tightening sanctions against employees of control and supervisory authorities who violate the order conducting inspections, invalidating the results of inspections in case of gross violations during their conduct, a significant reduction in non-procedural inspections by law enforcement agencies.

Currently, the role of development institutions is increasing. The most important task of development institutions is to create conditions for the implementation of long-term investment projects. State corporations occupy a special place among development institutions. They are a transitional form designed to promote the consolidation of state assets and increase the efficiency of their strategic management. As these problems are solved, as well as the institutions of corporate regulation and the financial market are strengthened, some state corporations should be corporatized, followed by full or partial privatization, and some state corporations created for a certain period should cease to exist. The effectiveness of institutional changes depends on the extent to which the adopted legislative norms are supported by the effectiveness of their application in practice. In Russia, a significant gap has formed between formal norms (laws) and informal norms (the actual behavior of economic entities), which is expressed in the low level of implementation of legislation and the tolerant attitude towards such non-compliance on the part of the authorities, business and the general population, that is, in legal nihilism.

Conclusion

Neoclassicism and institutionalism are the basic theories of the development of economic relations. The course work revealed the relevance of these theories in the modern economy of various countries, and how to effectively apply them in practice to maximize profits and reduce transaction costs. Ideas about the emergence, formation and modern development of these economic theories are obtained. I also described the similarities and differences between the theories and the features of each of them. Methods for studying economic processes and phenomena were considered from the perspective of neoclassicism and institutionalism. Based on the assigned tasks, it was possible to reveal the role of these economic theories for the development of modern economic systems and determine the specifics of each direction of economic theory for making subsequent economic decisions. It is necessary to understand that these theories are the basis for the effective development of an organization, and the application of various features of melon theories will allow the company to develop evenly and in the long term. An understanding of the advantages and disadvantages of economic theories, their application in practice and the role of these areas in the functioning of the economy is obtained.

The course work examined privatization in Russia on the basis of the neoclassical direction, and the results of its implementation. We can conclude that privatization had more negative features than positive ones, due to the rash policy of the state and the absence of a number of factors under which it could be successful. The institutions of priority development of Russia in the long term were also considered, and what reforms need to be carried out to develop an effective, innovative economy of Russia.

The conclusions obtained during the study indicate that neoclassicalism and institutionalism, as theories of economic relations, play an important role in the functioning of the economy, both at the macro and micro levels, and the better the principles of these theories are understood, the more efficiently resources will be used, accordingly, an increase in the organization's income.

List of sources used

1. Institutional economics: new institutional economic theory: Textbook. Under the general editorship. Doctor of Economics, Prof. A.A. Auzana. - M.: INFRA-M, 2010. - 416 p.

Brendeleva E.A. Neo-institutional economic theory: textbook. allowance / E.A. Brendeleva; under. total ed. A.V. Sidorovich. - Moscow: Business and Service, 2006. - 352 p.

3. Institutional economics: Textbook. / Under general Ed. A. Oleynik. - M.: INFRA-M, 2005.

Korneychuk B.V. Institutional economics: textbook for universities / B.V. Korneychuk. - M.: Gardariki, 2007. 255 p.

Odintsova M.I. Institutional economics [Text]: textbook. allowance / M.I. Odintsova; State university? High School of Economics. ? 2nd ed. ? M.: Publishing house. House of State University Higher School of Economics, 2008. ? 397 pp.

Tambovtsev V.L. Law and economic theory: Textbook. allowance. ? M.: INFRA - M, 2005. ? 224 pp.

Becker G.S. Human behavior: an economic approach. Selected works on economic theory: Trans. from English / Comp., scientific. ed., afterword R.I. Kapelyushnikova; preface M.I. Levin. - M.: State University Higher School of Economics, 2003.

Veblen T. The Theory of the Leisure Class. M.: Progress, 1984.

Goldman M.A. What is needed to create a normal market economy in Russia // Probl. theory and practice ex. - M., 1998. - No. 2. - pp. 19-24. 10. Goldman M.A. Privatization in Russia: can the mistakes made be corrected? // Ibid. - 2000. - No. 4. - pp. 22-27.

11. Inshakov O.V. Institution and institute: problems of categorical differentiation and integration // Economic science of modern Russia. - 2010. - No. 3.

Coase R. Firm, market and law. M.: Business: Catallaxy, 1993.

13. Kleiner G. System resource of the economy // Questions of economics. - 2011. - No. 1.

Kirdina S.G. Institutional changes and the Curie principle // Economic science of modern Russia. - 2011. - No. 1.

Lebedeva N.N. New institutional economic theory: Lectures, tests, assignments: Textbook. - Volgograd: Volgograd Scientific Publishing House, 2005.

North D. Institutions, institutional changes and the functioning of the economy. M.: Nachala, 1997.

Orekhovsky P. Maturity of social institutions and the specificity of the foundations of the theory of public choice // Questions of Economics. - 2011. - No. 6.

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There are several reasons why neoclassical theory (early 60s) ceased to meet the requirements placed on it by economists who were trying to understand the real events in modern economic practice:

Within the framework of neoclassics, there are practically no theories that satisfactorily explain dynamic changes in the economy, the importance of studying which became relevant against the backdrop of historical events of the 20th century. (In general, within the framework of economic science, until the 80s of the 20th century, this problem was considered almost exclusively within the framework of Marxist political economy).

Now let us dwell on the basic premises of neoclassical theory, which constitute its paradigm (hard core), as well as the “protective belt”, following the methodology of science put forward by Imre Lakatos:

Hard core:

stable preferences that are endogenous;

rational choice (maximizing behavior);

equilibrium in the market and general equilibrium in all markets.

Protective belt:

Property rights remain unchanged and clearly defined;

The information is completely accessible and complete;

Individuals satisfy their needs through exchanges that occur without costs, taking into account the initial distribution.

A Lakatosian research program, while leaving the hard core intact, should be aimed at clarifying, developing existing ones, or putting forward new auxiliary hypotheses that form a protective belt around this core.

If the hard core is modified, then the theory is replaced by a new theory with its own research program.

Let us consider how the premises of neo-institutionalism and classical old institutionalism influence the neoclassical research program.

5. Old institutionalism and its representatives: T. Veblen, W. Mitchell, J. Commons.

The most prominent representatives of “Old Institutionalism” are: Thorstein Veblen, John Commons, Wesley Mitchell, John Galbraith. Despite the significant range of problems covered in the works of these economists, they were unable to form their own unified research program. As Coase noted, the work of American institutionalists came to nothing because they lacked a theory to organize the mass of descriptive material.

Old institutionalism criticized the provisions that constitute the “hard core of neoclassicalism.” In particular, Veblen rejected the concept of rationality and the corresponding principle of maximization as fundamental in explaining the behavior of economic agents. The object of analysis is institutions, not human interactions in space with the restrictions that are set by institutions.

Also, the works of old institutionalists are distinguished by significant interdisciplinarity, being, in fact, continuations of sociological, legal, and statistical research in their application to economic problems.

The predecessors of neo-institutionalism are the economists of the Austrian School, in particular Carl Menger and Friedrich von Hayek, who introduced the evolutionary method into economic science, and also raised the question of the synthesis of many sciences studying society.

6. New institutional economics and neoclassical economic theory: general and specific.

Modern neo-institutionalism has its roots in the pioneering works of Ronald Coase, The Nature of the Firm, and The Problem of Social Cost.

The neo-institutionalists attacked first of all the provisions of neoclassicism, which constitute its defensive core.

First, the assumption that exchange occurs without costs has been criticized. Criticism of this position can be found in Coase's early works. Although, it should be noted that Menger wrote about the possibility of the existence of exchange costs and their influence on the decisions of exchanging subjects in his “Foundations of Political Economy.”

Economic exchange occurs only when each participant, carrying out an act of exchange, receives some increase in value to the value of the existing set of goods. This is proven by Carl Menger in his work “Foundations of Political Economy”, based on the assumption of the existence of two participants in the exchange. The first has good A with value W, and the second has good B with the same value W. As a result of the exchange that occurred between them, the value of goods at the disposal of the first will be W + x, and the second - W + y. From this we can conclude that during the exchange process, the value of the good for each participant increased by a certain amount. This example shows that activities related to exchange are not a waste of time and resources, but are as productive as the production of material goods.

When exploring exchange, one cannot help but dwell on the limits of exchange. The exchange will take place until the value of the goods at the disposal of each participant in the exchange will, according to his estimates, be less than the value of those goods that can be obtained as a result of the exchange. This thesis is true for all exchange counterparties. Using the symbolism of the above example, an exchange occurs if W(A)< W + х для первого и W (B) < W + у для второго участников обмена, или если х >0 and y > 0.

So far we have considered exchange as a process that occurs without costs. But in a real economy, any act of exchange is associated with certain costs. Such exchange costs are called transaction costs. They are usually interpreted as “the costs of collecting and processing information, the costs of negotiations and decision-making, the costs of monitoring and legal protection of the execution of the contract.”

The concept of transaction costs contradicts the thesis of neoclassical theory that the costs of functioning of the market mechanism are equal to zero. This assumption made it possible not to take into account the influence of various institutions in the economic analysis. Therefore, if transaction costs are positive, it is necessary to take into account the influence of economic and social institutions on the functioning of the economic system.

Secondly, recognizing the existence of transaction costs, there is a need to revise the thesis about the availability of information. Recognition of the thesis about the incompleteness and imperfection of information opens up new prospects for economic analysis, for example, in the study of contracts.

Thirdly, the thesis about the neutrality of the distribution and specification of property rights has been revised. Research in this direction served as a starting point for the development of such areas of institutionalism as the theory of property rights and economics of organizations. Within the framework of these directions, subjects of economic activity “economic organizations have ceased to be viewed as “black boxes”.

Within the framework of “modern” institutionalism, attempts are also being made to modify or even change the elements of the hard core of neoclassics. First of all, this is the neoclassical premise of rational choice. In institutional economics, classical rationality is modified by accepting assumptions of bounded rationality and opportunistic behavior.

Despite the differences, almost all representatives of neo-institutionalism view institutions through their influence on the decisions made by economic agents. The following fundamental tools related to the human model are used: methodological individualism, utility maximization, bounded rationality and opportunistic behavior.

Some representatives of modern institutionalism go even further and question the very premise of the utility-maximizing behavior of economic man, proposing its replacement by the principle of satisfaction. In accordance with the classification of Tran Eggertsson, representatives of this direction form their own direction in institutionalism - New Institutional Economics, the representatives of which can be considered O. Williamson and G. Simon. Thus, the distinction between neo-institutionalism and new institutional economics can be drawn depending on which premises are replaced or modified within their framework - the “hard core” or the “protective belt”.

Institutions: concept and role in the functioning of the economy

An institution is a set of roles and statuses designed to satisfy a specific need.

In economic theory, the concept of institution was first included in analysis by Thorstein Veblen.

Institutions are, in fact, a common way of thinking as regards the particular relations between society and the individual and the particular functions they perform; and the system of social life, which is composed of the totality of those acting at a certain time or at any moment in the development of any society, can, from the psychological side, be characterized in general terms as the prevailing spiritual position or the widespread idea of \u200b\u200bthe way of life in society.

Another founder of institutionalism, John Commons, defines institution as follows:

An institution is a collective action to control, liberate and expand individual action.

Another classic of institutionalism, Wesley Mitchell, has the following definition: institutions are dominant, and highly standardized, social habits.

Institutions regulate access to the legal use of rare and valuable resources, and also determine the principles of this access. They determine what these or those interests are and how they should be realized, taking into account the fact that the very rarity of these resources, which makes accessing them difficult, forms the basis for rivalry and even conflicts in the struggle for their possession.

The concept of institution proposed by D. North and A. Shotter

Currently, within the framework of modern institutionalism, the most common interpretation of institutions is Douglas North’s:

Institutions are the rules, the mechanisms that enforce them, and the norms of behavior that structure repeated interactions between people. Institutions as equilibria. (Schotter)Institutions are (institutional) equilibria realized in some kind of games (in a standard repeated coordination game).

The concept of institutionalism and the reasons for its emergence.

The reasons for the emergence of institutionalism include the transition of capitalism to the monopoly stage, which was accompanied by significant centralization of production and capital, which gave rise to social contradictions in society.

At the end of the 19th and beginning of the 20th centuries, capitalism of free (perfect) competition developed into a monopolistic stage. Perfect competition has given way to corporate capital and imperfect competition. The concentration of production increased, and there was a massive centralization of banking capital. As a result, the capitalist system gave rise to acute social contradictions.
These circumstances led to the emergence of a completely new direction in economic theory - institutionalism. He set the task, firstly, to act as an opponent to monopoly capital and, secondly, to develop a concept for protecting the “middle class” by reforming, first of all, the economy.
Institutionalism (from the Latin institutio - “custom, instruction, instruction”) is a direction of economic thought that was formed and became widespread in the United States in the 20-30s of the 20th century. Representatives of institutionalism consider institutions to be the driving force of social development.

4. Stages of development of institutionalism. First stage falls on the 20-30s. XX century, when the basic concepts of institutionalism are formulated. The leading representatives of the period of formation of institutionalism as a scientific school are Thorstein Veblen, John Commons, Wesley Mitchell. These institutionalists defended the ideas of social control and intervention of society, mainly the state, in economic processes. Second phase falls on the post-war period until the 60-70s. XX century At this stage, demographic problems, the trade union movement, and the contradictions of the socio-economic development of capitalism are studied. The leading representative of this period is John Maurice Clark. Third stage - 60-70s XX century Here the role of economic processes in the social life of society is studied. This stage is called neo-institutionalism . Its leading representative is Ronald Coase, known for such works as “The Nature of the Firm” and “The Problem of Social Costs”. Neo-institutionalists they are no longer just trying to criticize, but to modify neoclassical economic theory, considering institutions through their influence on the decisions made by economic agents (participants in economic processes).

5. Basic principles of institutionalism

Institutionalism is characterized by the following provisions:
– the basis of analysis is the method of describing economic phenomena;
– the object of analysis is the evolution of social psychology;
– the driving force of the economy, along with material factors, are moral, ethical and legal elements in historical development;
– interpretation of socio-economic phenomena from the point of view of social psychology;
– dissatisfaction with the use of abstractions inherent in neoclassicism;
– the desire to integrate economic science with social sciences;
– the need for detailed quantitative research of phenomena;
– protection of the implementation of the state’s antimonopoly policy.

T. Veblen and his contribution to the development of the theory of institutionalism

The founder of institutionalism was the American scientist T. Veblen. His main work is “The Theory of the Leisure Class” (1899).
Veblen's institutionalism is socio-psychological in nature, since it derives a number of economic phenomena from social psychology.
The economy is considered by Veblen as an evolutionary open system that experiences constant influences from the external environment, culture, politics, nature and reacts to them.
Veblen introduces scientific concepts into science: “institution” and “institution”. However, both are often called “institutions”.
Veblen emphasizes cultural norms and traditions, emphasizing that institutions guide, facilitate, and encourage human activity rather than limiting them. According to Veblen, an institution by its nature has the properties of “continuity”, since it is a self-reproducing social phenomenon.
Analyzing capitalist society, Veblen creates the concept of an “industrial” system..

To cure disasters, Veblen creates the theory of “regulated capitalism.”

Institutionalism and neoclassical economics

According to institutionalists, neoclassical theory is based on unrealistic premises and restrictions: stable preferences, maximizing behavior, general economic equilibrium in all markets, unchanged property rights, availability of information, exchange occurs without costs (R. Coase called this state of affairs in neoclassics “classroom economics”). boards");
2) the subject of research in institutional economic theory is expanding significantly. Institutionalists, along with purely economic phenomena, study such phenomena as ideology, law, norms of behavior, family, and the research is conducted from an economic point of view. This process was called economic imperialism. The leading representative of this trend is the 1992 Nobel Prize winner in economics, Harry Becker (b. 1930). But for the first time, Ludwig von Mises (1881-1973) wrote about the need to create a general science that studies human action, proposing the term “praxeology” for this purpose;
3) economics is not a static sphere, but a dynamic one.

8. Statements forming<<жесткое ядро>> and<<защитный пояс>> neoclassical

The main premises of neoclassical theory, which constitute its paradigm (hard core), as well as the “protective belt”, following the methodology of science put forward by Imre Lakatos:

Hard core:

1. stable preferences that are endogenous in nature;

2. rational choice (maximizing behavior);

3. equilibrium in the market and general equilibrium in all markets.

Protective belt:

1. Property rights remain unchanged and clearly defined;

2. The information is completely accessible and complete;

3. Individuals satisfy their needs through exchange, which occurs without costs, taking into account the initial distribution.

Institutionalism and neoclassical economics

The concept of an institution. The role of institutions in the functioning of the economy

Question Principles and methods of education for preschool children.

RESEARCH METHODS help to study and summarize data from teaching practice. These methods include conversations, questionnaires, observations, experiments, analysis of specialized literature, and the work of preschoolers.
TEACHING METHODS represent methods of purposeful interconnected activity of the teacher and preschoolers, in which children acquire skills, knowledge and abilities, their worldview is formed, and their inherent abilities are developed.

METHODS of education are the most common ways to achieve educational goals. They can be divided into simpler subsystems of methods of pedagogical influence and upbringing.

Let's start our study of institutions with the etymology of the word institute.

to institute (English) - establish, establish.

The concept of institution was borrowed by economists from the social sciences, in particular from sociology.

Institute called a set of roles and statuses designed to satisfy a specific need.

Definitions of institutions can also be found in works of political philosophy and social psychology. For example, the category of institution is one of the central ones in John Rawls’s work “A Theory of Justice.”

Under institutions I will understand a public system of rules that define office and position with associated rights and duties, powers and immunities, and the like. These rules specify certain forms of action as permissible and others as prohibited, and they punish certain actions and protect others when violence occurs. As examples, or more general social practices, we can cite games, rituals, courts and parliaments, markets and property systems.

In economic theory, the concept of institution was first included in analysis by Thorstein Veblen.

Institutes- this is, in fact, a common way of thinking with regard to the individual relations between society and the individual and the individual functions they perform; and the system of social life, which is made up of the totality of those acting at a certain time or at any moment in the development of any society, can, from the psychological side, be characterized in general terms as the prevailing spiritual position or the widespread idea of \u200b\u200bthe way of life in society.

Veblen also understood institutions as:

habitual ways of responding to stimuli;
structure of the production or economic mechanism;
the currently accepted system of social life.

Another founder of institutionalism, John Commons, defines institution as follows:

Institute– collective action to control, liberate and expand individual action.

Another classic of institutionalism, Wesley Mitchell, can find the following definition:

Institutes- dominant, and highly standardized, social habits.

Currently, within the framework of modern institutionalism, the most common interpretation of institutions is Douglas North’s:

Institutes- these are the rules, the mechanisms that ensure their implementation, and the norms of behavior that structure repeated interactions between people.

In order to avoid the coordination of many external factors that influence success and the very possibility of making a particular decision, within the framework of economic and social orders, schemes or algorithms of behavior are developed that are the most effective under given conditions. These schemes and algorithms or matrices of individual behavior are nothing more than institutions.

There are several reasons why neoclassical theory (early 60s) ceased to meet the requirements placed on it by economists who were trying to understand the real events in modern economic practice:

Neoclassical theory is based on unrealistic assumptions and limitations, and, therefore, it uses models that are inadequate to economic practice. Coase called this state of affairs in neoclassical theory “blackboard economics.”
Economic science expands the range of phenomena (for example, such as ideology, law, norms of behavior, family) that can be successfully analyzed from the point of view of economic science. This process was called “economic imperialism”. The leading representative of this trend is Nobel laureate Harry Becker. But for the first time, Ludwig von Mises wrote about the need to create a general science that studies human action, proposing the term “praxeology” for this purpose.
Within the framework of neoclassics, there are practically no theories that satisfactorily explain dynamic changes in the economy, the importance of studying which became relevant against the backdrop of historical events of the 20th century. (In general, within the framework of economic science, until the 80s of the 20th century, this problem was considered almost exclusively within the framework of Marxist political economy).

Hard core :

stable preferences that are endogenous;
rational choice (maximizing behavior);
equilibrium in the market and general equilibrium in all markets.

Protective belt:

Property rights remain unchanged and clearly defined;
The information is completely accessible and complete;
Individuals satisfy their needs through exchanges that occur without costs, taking into account the initial distribution.

If the hard core is modified, then the theory is replaced by a new theory with its own research program.

Let us consider how the premises of neo-institutionalism and classical old institutionalism influence the neoclassical research program.

Modern neo-institutionalism has its roots in the pioneering works of Ronald Coase, The Nature of the Firm, and The Problem of Social Cost.

The neo-institutionalists attacked first of all the provisions of neoclassicism, which constitute its defensive core.

First, the assumption that exchange occurs without costs has been criticized. Criticism of this position can be found in Coase's early works. Although, it should be noted that Menger wrote about the possibility of the existence of exchange costs and their influence on the decisions of exchanging subjects in his “Foundations of Political Economy.”
Economic exchange occurs only when each participant, carrying out an act of exchange, receives some increase in value to the value of the existing set of goods. This is proven by Carl Menger in his work “Foundations of Political Economy”, based on the assumption of the existence of two participants in the exchange. The first has good A with value W, and the second has good B with the same value W. As a result of the exchange that occurred between them, the value of goods at the disposal of the first will be W + x, and the second - W + y. From this we can conclude that during the exchange process, the value of the good for each participant increased by a certain amount. This example shows that activities related to exchange are not a waste of time and resources, but are as productive as the production of material goods.
When exploring exchange, one cannot help but dwell on the limits of exchange. The exchange will take place until the value of the goods at the disposal of each participant in the exchange will, according to his estimates, be less than the value of those goods that can be obtained as a result of the exchange. This thesis is true for all exchange counterparties. Using the symbolism of the above example, an exchange occurs if W(A)< W + х для первого и W (B) < W + у для второго участников обмена, или если х > 0 and y > 0.
So far we have considered exchange as a process that occurs without costs. But in a real economy, any act of exchange is associated with certain costs. These exchange costs are called transactional. They are usually interpreted as “the costs of collecting and processing information, the costs of negotiations and decision-making, the costs of monitoring and legal protection of the execution of the contract.”
The concept of transaction costs contradicts the thesis of neoclassical theory that the costs of functioning of the market mechanism are equal to zero. This assumption made it possible not to take into account the influence of various institutions in the economic analysis. Therefore, if transaction costs are positive, it is necessary to take into account the influence of economic and social institutions on the functioning of the economic system.
Secondly, recognizing the existence of transaction costs, there is a need to revise the thesis about the availability of information. Recognition of the thesis about the incompleteness and imperfection of information opens up new prospects for economic analysis, for example, in the study of contracts.
Thirdly, the thesis about the neutrality of the distribution and specification of property rights has been revised. Research in this direction served as a starting point for the development of such areas of institutionalism as the theory of property rights and economics of organizations. Within the framework of these directions, subjects of economic activity “economic organizations have ceased to be viewed as “black boxes”.

Development of a new institutional economic theory.

Even a simple listing of the main approaches within the framework of the new institutional theory shows how rapidly its development has proceeded and how widespread it has become in recent decades. It is now a legitimate part of the main body of modern economics. The emergence of a new institutional theory is associated with the emergence in economics of such concepts as transaction costs, property rights, and contractual relations. The awareness of the importance of the concept of transaction costs for the operation of the economic system is associated with Ronald Coase's article “The Nature of the Firm” (1937). Traditional neoclassical theory viewed the market as a perfect mechanism, where there is no need to take into account the costs of servicing transactions. However, R. Coase showed that with every transaction between economic entities, costs arise associated with its conclusion - transaction costs.

Today, it is customary to distinguish among transaction costs:

1) costs of searching for information - the cost of time and resources to obtain and process information about prices, about goods and services of interest, about available suppliers and consumers;

2) negotiation costs;

3) the costs of measuring the quantity and quality of goods and services entering into exchange;
4) costs for specification and protection of property rights;
5) costs of opportunistic behavior: with asymmetry of information, both an incentive and the opportunity to work not with full efficiency arise.

The theory of property rights was developed by A. Alchian and G. Demsetz; they laid the foundation for a systematic analysis of the economic significance of property relations. The system of property rights in the new institutional theory refers to the entire set of rules regulating access to rare resources. Such norms can be established and protected not only by the state, but also by other social mechanisms - customs, moral guidelines, religious commandments. Property rights can be thought of as “rules of the game” that regulate relationships between individual agents. Neo-institutionalism operates with the concept of a “bundle of property rights”: each such “bundle” can split, so that one part of the authority to make decisions regarding a particular resource begins to belong to one person, the other to another, etc.

The main elements of a bundle of property rights usually include:

1) the right to exclude other agents from access to the resource;

2) the right to use the resource;

3) the right to receive income from it;
4) the right to transfer all previous powers.

A necessary condition for the efficient functioning of the market is the precise definition, or "specification", of property rights. The fundamental thesis of the new institutional theory is that the specification of property rights is not free, therefore in the real economy it cannot be fully defined and protected with absolute reliability. One key term of the new institutional theory is contract. Any transaction involves the exchange of “bundles of property rights” and this occurs through a contract that fixes the powers and the conditions under which they are transferred. Neo-institutionalists study various forms of contracts (explicit and implicit, short- and long-term, etc.), the mechanism for ensuring the reliability of fulfillment of accepted obligations (court, arbitration, self-protected contracts).

In the 1960s, American scholar James Buchanan (b. 1919) advanced public choice theory (PCT) in his classic works: The Calculus of Consent, The Limits of Freedom, and The Constitution of Economic Policy. TOV studies the political mechanism for the formation of macroeconomic decisions or politics as a type of economic activity. The main areas of TOV research are: constitutional economics, model of political competition, public choice in a representative democracy, theory of bureaucracy, theory of political rent, theory of state failure. Buchanan in the theory of public choice proceeds from the fact that people follow self-interest in the political sphere, and, in addition, politics is similar to the market. The main subjects of political markets are voters, politicians and officials. In a democratic system, voters will cast their votes for those politicians whose election programs best suit their interests. Therefore, politicians, in order to achieve their goals (entry into power structures, career), must focus on voters. Thus, politicians adopt certain programs for which voters spoke, and officials specify and control the progress of these programs. Within the framework of the theory of public choice, all measures of state economic policy are understood as endogenous to the economic and political system, since their determination is carried out under the influence of the requests of subjects of the political market, which are also economic subjects.

The economic behavior of the bureaucracy was examined by U. Niskanen. He believes that the results of the activities of bureaucrats are often of an “intangible” nature (decrees, memos, etc.) and therefore it is difficult to monitor their activities. At the same time, it is assumed that the welfare of officials depends on the size of the agency’s budget: this opens up opportunities for increasing their remuneration, improving their official status, reputation, etc. As a result, it turns out that officials manage to significantly inflate agency budgets compared to the level actually necessary to perform the agency's functions. These arguments play a significant role in substantiating the thesis about the comparative inefficiency of the provision of public goods by government agencies, which is shared by the overwhelming majority of supporters of the theory of public choice. The political business cycle model was proposed by D. Gibbs. Gibbsu believes that the nature of economic policy depends on which party is in power. “Left” parties, traditionally focused on supporting employees, are pursuing policies aimed at increasing employment (even at the expense of rising inflation). “Right” parties support big business; they pay more attention to preventing inflation (even at the expense of rising unemployment). Thus, according to the simplest model, cyclical fluctuations in the economy are generated by changes in “right” and “left” governments, and the consequences of the policies pursued by the respective governments persist throughout their entire term of office. Thus, the emergence of a new institutional theory is associated with the emergence in economics of such concepts as transaction costs, property rights, and contractual relations. As part of transaction costs, it is customary to distinguish: costs of searching for information; negotiation costs; costs of measuring the quantity and quality of goods and services entered into exchange; costs of specification and protection of property rights; costs of opportunistic behavior.

Neoclassical.

Neoclassicism - arose at the end of the 19th century. a movement of economic thought that can be considered the beginning of modern economic science. It produced a marginalist revolution in the classical economics of the 19th century, which was represented by such names as A. Smith, D. Ricardo, J. Mill, K. Marx, etc. Neoclassicists developed the tools of marginal analysis of the economy, primarily the concept of marginal utility, which was almost simultaneously discovered W. Jevons, K. Menger and L. Walras, as well as marginal productivity, which was also used by some representatives of classical economics (for example, I. Thunen).

Among the largest representatives of neoclassicism, in addition to those mentioned, are J. Clark, F. Edgeworth, I. Fisher, A. Marshall, V. Pareto, K. Wicksell. They emphasized the importance of the scarcity of goods for determining their price, laid down a general idea of the essence of optimal distribution (given ) resources. At the same time, they proceeded from the theorems of limit analysis, determining the conditions for the optimal choice of goods, the optimal structure of production, the optimal intensity of use of factors, the optimal point in time (interest rate). All these concepts are summarized in the main criterion: subjective and objective rates of substitution between any two goods (products and resources) must be equal for all households and all production units, respectively. In addition to these basic conditions, second-order conditions were studied - the law of diminishing returns, as well as a system for ranking individual utilities, etc.

Apparently, the main achievement of this school is the model of competitive equilibrium developed by Walras. Nevertheless, in general, for N. t. characterized by a microeconomic approach to economic phenomena, in contrast to Keynesianism, in the theory of which the macroeconomic approach dominates. Neoclassical economists laid the foundation for later economic concepts such as welfare economics and growth theory (eg, the Harrod-Domar model). These concepts are sometimes called the modern neoclassical school. A number of recent economists have also tried to combine some of the provisions of classical theory, neoclassicism and Keynesianism - this movement is called neoclassical synthesis. Ideas N. t. e. were most fully set out in A. Marshall’s “Principles of Economic Theory,” which “... must be recognized as one of the most durable and viable books in the history of economic science: this is the only treatise of the 19th century. on Economic Theory, which still sells by the hundreds every year, and which can still be read with great profit by the modern reader.” Let us add that in Russia Marshall’s three-volume work was published in 1993. The neoclassical direction of political economy arose in the 70s of the 19th century. Its representatives: K. Menger, F. Wieser, E. Böhm-Bawerk (Austrian school); W. Jevons, L. Walras (mathematical school); A. Marshall, A. Pigou (Cambridge school); J.B. Clark (American school).

The neoclassical movement is based on the principle of state non-interference in the economy. The market mechanism is capable of regulating the economy itself, establishing a balance between supply and demand, between production and consumption. Neoclassicists advocate freedom of private enterprise.

Neoclassical theory is the theory that unforeseen changes in the price level can give rise to macroeconomic instability in the short term; in the long term, the economy remains stable in the production of a national product, ensuring full employment of resources due to the flexibility of prices and wages. The neoclassical direction examines the behavior of the so-called economic person (consumer, entrepreneur, employee), who seeks to maximize income and minimize costs. Neoclassical economists developed the theory of marginal utility and the theory of marginal productivity, the theory of general economic equilibrium, according to which the mechanism of free competition and market pricing ensures fair distribution of income and full use of economic resources; economic theory of welfare, the principles of which form the basis of the modern theory of public finance.

Neoclassical synthesis is a combination of Keynesian macrotheory and neoclassical microtheory in a single system. The essence of the concept of neoclassical synthesis is the combination of state and market regulation of the economy. The combination of state production and private enterprise produces a mixed economy.

In the mid-50s, monetarism arose - an economic theory that ascribes to the money supply in circulation the role of a determining factor in the process of formation of economic conditions and establishes a causal relationship between changes in the quantity of money and the size of the gross final product. M. Friedman tried to prove that the market economy is characterized by special stability, making government intervention unnecessary. Thus, the neoclassicists developed the tools of marginal analysis of the economy, primarily the concept of marginal utility, while they proceeded from the theorems of marginal analysis, determining the conditions for the optimal choice of goods, the optimal structure of production, the optimal intensity of use of factors, the optimal moment in time. The neoclassical movement is based on the principle of state non-interference in the economy. The market mechanism is capable of regulating the economy itself.

Comparative analysis of neoclassicalism and institutionalism.

The key difference between the new institutional economic theory, the founder of which is O. Williamson, and neo-institutional economic theory, the ideas of which are most fully reflected in the numerous works of D. S. North, lies in the scope of the methodology used. The new institutional economic theory is based on two basic methodological postulates that diverge from the main provisions of the methodology of traditional neoclassical theory. This is a significant weakening of the premise of rationality of economic entities, suggesting the impossibility of concluding complete (taking into account all possible circumstances) contracts. Accordingly, the postulate about the optimizing behavior of market agents is replaced by the postulate of finding a satisfactory result, and the focus is on the category of “relational contracts”, that is, contracts that fix the general rules of interaction between the parties to a transaction to adapt the structure of their mutual relations to changing conditions. The inevitable discrepancy under these conditions between the terms of contractual agreements at the stage of their conclusion and implementation necessitates the study of contracting as an integral process that occurs over time.

Thus, the new institutional economic theory differs from the neoclassical one not only by the introduction of the category of transaction costs into the analysis, but also by the modification of some fundamental methodological principles while maintaining others (in particular, the neoclassical postulate about the strict orientation of individuals to follow their own interests is not questioned). On the contrary, neo-institutional economic theory is based on the same methodological principles as traditional neoclassical economic theory - that is, on the principles of rational optimizing behavior of economic entities under a given system of restrictions.

The peculiarity of the conceptual approach inherent in neo-institutional economic theory is the integration of the category of transaction costs into the structure of neoclassical analysis, as well as the expansion of the category of restrictions by taking into account the specific features of the structure of property rights. Since institutional economics arose as an alternative to neoclassical economics, let us highlight the main fundamental differences between them. New institutional and neo-institutional theories represent alternative approaches to the study of issues related to the existence of transaction costs and specialized contractual structures that ensure their minimization. At the same time, the focus of both directions is the problem of economic organization. Although institutionalism as a special movement emerged at the beginning of the twentieth century, for a long time it was on the periphery of economic thought. Explaining the movement of economic goods only by institutional factors did not find many supporters. This was partly due to the uncertainty of the very concept of “institution”, by which some researchers understood mainly customs, others - trade unions, others - the state, fourth corporations - etc., etc.

Partly because institutionalists tried to use the methods of other social sciences in economics: law, sociology, political science, etc. As a result, they lost the opportunity to speak the unified language of economic science, which was considered the language of graphs and formulas. There were, of course, other objective reasons why this movement was not in demand by contemporaries.

The situation, however, changed radically in the 1960s and 1970s. To understand why, it is enough to make at least a cursory comparison of the “old” and “new” institutionalism. There are at least three fundamental differences between the “old” institutionalists (such as T. Veblen, J. Commons, J. C. Galbraith) and neo-institutionalists (such as R. Coase, D. North or J. Buchanan).

Firstly, the “old” institutionalists (for example, J. Commons in “The Legal Foundations of Capitalism”) approached economics from law and politics, trying to study the problems of modern economic theory using the methods of other social sciences; neo-institutionalists take the exact opposite path - they study political science and legal problems using the methods of neoclassical economic theory, and above all, using the apparatus of modern microeconomics and game theory.

Secondly, traditional institutionalism was based mainly on the inductive method and sought to move from particular cases to generalizations, as a result of which a general institutional theory never emerged; Neo-institutionalism follows a deductive path - from the general principles of neoclassical economic theory to the explanation of specific phenomena of social life.

Thus, the divergence between new institutional economics and neoclassical economics lies in the area of methodology used. The new institutional economic theory is based on two basic methodological postulates that diverge from the main provisions of the methodology of traditional neoclassical theory.

Criterion	Neoclassical	Institutionalism
Founding period	XVII>XIX>XX centuries	20-30s of the XX century
Place of development	Western Europe
	Industrial	Post-industrial
Analysis methodology	Methodological individualism - the explanation of institutions through the need of individuals for the existence of frameworks,	Holism is an explanation of the behavior and interests of individuals through the characteristics of institutions that predetermine their interactions.
Nature of reasoning	Deduction (from general to specific)	Induction (from particular to general)
Human rationality		Limited
Information and knowledge	Complete, limited knowledge	Partial, specialized knowledge
	Profit utility maximization	Cultural awareness, harmonization
	Determined independently	Determined by culture, team
Interaction	Commodity	Interpersonal
Dependence on the influence of social factors	Complete independence	Not strictly independent
Behavior of participants	No deceit (deception) and no coercion	Opportunistic behavior

Table - comparative analysis of neoclassicism and institutionalism.