Review

Institutional uncertainty in transitional and developing economies

  • Received: 24 November 2019 Accepted: 03 January 2020 Published: 10 January 2020
  • JEL Codes: D80, D91, K00, N23, P27, P51, Z10

  • The institutions improvement is one of principal conditions for the transitional and developing economies growth. This study on the bases of multidisciplinary approach investigates the necessity of using the concept "institutional uncertainty" in economic and social researching, proves that the institutional uncertainty exists as a result of imperfect knowledge of economic agents rooting in economic agents' mentality. The institutional uncertainty is an obligatory attribute of institutional environment, because institutions have capability to generate not only "certainty", but also "uncertainty", and "risks" for economic agents. The institutional uncertainty as Knightian uncertainty reflect the unpredictability of changes of institutional environment and basic institutions (ethic, ethnic, cultural, ideology, political, business and so on), and the unpredictability of it influences on economic agents' behavior. In this connection it needs to specify the institutional uncertainty from political risks and political uncertainty. Leading reasons of the institutional uncertainty are presented on the micro-level at performance of different types of incomplete contracts widespread in market and in pre-market economies. On the macro-level the concept of institutional uncertainty is reflecting not only unpredictability of institutional changes, but also uniqueness of combinations of driving forces of transition to new frames of economy and society. Some directions of using this concept at investigation of historic institutional changes and institutional changes in modern transitional and developing economies are considered in the last parts of the study.

    Citation: Kolomiets Andrey. Institutional uncertainty in transitional and developing economies[J]. National Accounting Review, 2020, 2(1): 66-82. doi: 10.3934/NAR.2020004

    Related Papers:

  • The institutions improvement is one of principal conditions for the transitional and developing economies growth. This study on the bases of multidisciplinary approach investigates the necessity of using the concept "institutional uncertainty" in economic and social researching, proves that the institutional uncertainty exists as a result of imperfect knowledge of economic agents rooting in economic agents' mentality. The institutional uncertainty is an obligatory attribute of institutional environment, because institutions have capability to generate not only "certainty", but also "uncertainty", and "risks" for economic agents. The institutional uncertainty as Knightian uncertainty reflect the unpredictability of changes of institutional environment and basic institutions (ethic, ethnic, cultural, ideology, political, business and so on), and the unpredictability of it influences on economic agents' behavior. In this connection it needs to specify the institutional uncertainty from political risks and political uncertainty. Leading reasons of the institutional uncertainty are presented on the micro-level at performance of different types of incomplete contracts widespread in market and in pre-market economies. On the macro-level the concept of institutional uncertainty is reflecting not only unpredictability of institutional changes, but also uniqueness of combinations of driving forces of transition to new frames of economy and society. Some directions of using this concept at investigation of historic institutional changes and institutional changes in modern transitional and developing economies are considered in the last parts of the study.


    加载中


    [1] Acemoglu D, Johnson S, Robinson JA (2005) Institutions as a Fundamental Cause of Long-Run Growth, In: Handbook of Economic Growth, Philippe Aghion and Steven N. Durlauf (eds.): Volume 1A, North Holland: Elsevier, 385-472.
    [2] Acemoglu D, Robinson JA (2016) Why nations fail:The origins of power, prosperity, and poverty. New York: Crown Publishers.
    [3] Alesina A, Giuliano P (2015) Culture and Institutions. J Econ Lit 53: 898-944. doi: 10.1257/jel.53.4.898
    [4] Aristotle (2009) Politics: A Treatise on Government, Book VI, Book VIII, The Project Gutenberg E-book. Available from: https://www.gutenberg.org/.
    [5] Arrow KJ (1963) Uncertainty and the Welfare Economics of Medical Care. Am Econ Rev 53: 941-973.
    [6] Arrow KJ (1966) Exposition of the Theory of Choice under Uncertainty. Synthese 16: 253. doi: 10.1007/BF00485082
    [7] Ashton J (1919) Social Life in the Rein of Queen Ann, London, Chato&Windus, The Project Gutenberg E-book. Available from: https://www.gutenberg.org/.
    [8] Beck U (1992) Risk Society: Towards a New Modernity, London: Sage.
    [9] Beck U (2009) World at Risk, Cambridge: Polity.
    [10] Brunetti A, Weder B (1998) Investment and Institutional Uncertainty: A Comparative Study of Different Uncertainty Measures. Rev World Econ 134: 513-533.
    [11] Brown PR, Olofsson A (2014) Risk, uncertainty and policy: towards a social-dialectical understanding. J Risk Res 17: 425-434. doi: 10.1080/13669877.2014.889204
    [12] Boudreaux CJ (2017) Institutional quality and innovation: Some cross-country evidence. J Entrepreneurship Public Policy 6: 26-40. doi: 10.1108/JEPP-04-2016-0015
    [13] Crawford S, Ostrom E (2005) A Grammar of Institutions, In Understanding Institutional Diversity, ed. Elinor Ostrom, Princeton, NJ: Princeton University Press, 137-174.
    [14] Confucius (2002) The Chinese classics, Confucian Analects, Lun Yu, Book II Chapter III; book XI Chapter XXIII. The Project Gutenberg E-book. Available from: https://www.gutenberg.org/.
    [15] Datta D, Londono JM, Sun B, et al. (2017) Taxonomy of Global Risk, Uncertainty, and Volatility Measures. FRB International Finance Discussion Paper, No. 1216.
    [16] Deakin S, Gindis D, Hodgson GM, et al. (2015) Legal Institutionalism: Capitalism and the Constitutive Role of Law. University of Cambridge Faculty of Law Research Paper, No. 26/2015.
    [17] Dercon S (2008) Risk-coping strategies, In: The New Palgrave Dictionary of Economics, Eds. Steven N. Durlanf and Lawrence E. Blume, Second Edition, Palgrave Macmillan.
    [18] Dickson PGM (1967) The Financial Revolution in England: A Study in the Development of Public Credit, 1688-1756, London.
    [19] Frydlinger D, Hart O (2019) Overcoming Contractual Incompleteness. Available from http://scholar.harvard.edu/hart/home.
    [20] Glaeser EL, LaPorta R, Lopez-de-Silanes F, et al. (2004) Do Institutions Cause Growth? Campridge, MA, NBER Working Paper 10568. Available from: http://papers.nber.org/papers/w10568.pdf.
    [21] Greif A (2006) Institutions and the Path to the Modern Economy: Lessons from Medieval Trade, Cambridge University Press.
    [22] Greif A, Iyigun M (2013) Social organization, Violence & Modern Growth. IZA Discussion Paper, No. 7377.
    [23] Greif A, Mokyr J (2017) Cognitive rules, institutions, and economic growth: Douglass North and beyond. J Inst Econ 13: 25-52.
    [24] Hart O, Halonen-Akatwijuka M (2015) Short-term, Long-term, and Continuing Contracts. NBER Working Paper, No. w21005.
    [25] Hartwell CA (2018) The impact of institutional volatility on financial volatility in transition economies. J Comp Econ 46: 598-615. doi: 10.1016/j.jce.2017.11.002
    [26] Hayek F (1974) The pretence of knowledge. Nobel Prize lecture. Available from: https://www.nobelprize.org/prizes/economic-sciences/1974/hayek/lecture/.
    [27] Hodgson GM (1998) The Approach of Institutional Economics. J Econ Lit 36: 166-192.
    [28] Hodgson G (2017) 1688 and all that: property rights, the Glorious Revolution and the rise of British capitalism. J Inst Econ 13: 79-107.
    [29] Joskow PL (2008) Introduction to New Institutional Economics: A Report Card, In New Institutional Economics: a Guidebook, Brousseau E. and Glachant J.-M. (eds.), Cambridge/New York: Cambridge University Press, 1-19.
    [30] Jurado K, Ludvigson SC, Ng S (2013) Measuring uncertainty. NBER Working Papers, No.19456.
    [31] Kaufmann Dl, Kraay A, Mastruzzi M (2010) The Worldwide Governance Indicators: Methodology and Analytical Issues. World Bank Research Working Paper, No.5430.
    [32] Knight FH (1921) Risk, uncertainty, and profit. Library of Economics and Liberty. Available from: http://www.econlib.org/library/Knight/knRUP6.html.
    [33] Kolomiets A (2014) Inflation and Bank Percent in Contemporary Russian Economy. Voprosy Ekonomiki 12: 101-115.
    [34] Kolomiets A (2018) Innovations and Protection of Property Rights in the Era of Radical Economic Transformations. Voprosy Ekonomiki 9: 95-113.
    [35] Lee WC, Law SH (2017) Roles of formal institutions and social capital in innovation activities. A cross-country analysis. Global Econ Rev 46: 203-231.
    [36] McCloskey DN (2010) Bourgeois Dignity: Why Economics Can't Explain the Modern World, Chicago: University of Chicago Press.
    [37] McCloskey DN (2011) Language and Interest in the Economy: A White Paper on "Humanomics". American Economic Association. Ten Years and Beyond: Economists Answer NSF's Call for Long-Term Research Agendas. Available at SSRN: https://ssrn.com/abstract=1889320 or http://dx.doi.org/10.2139/ssrn.1889320.
    [38] McCloskey DN (2013) A neo-Institutionalism of Measurement, Without Measurement Measurement: A Comment on Douglas Allen's The Institutional Revolution. Rev Aust Econ 26: 363-373. doi: 10.1007/s11138-013-0236-6
    [39] Masuch K, Moshammer E, Pierluidi B (2016) Institutions, Public Debt and Growth in Europe. ECB. Working Paper Series. No.1963. Available from: www.ecb,europa.eu/pub/research/working-papers/html/index.en.html.
    [40] Mengius (2002) The Chinese classics, The sayings of Mengius, Book I, Part I. The Project Gutenberg E-book. Available from: https://www.gutenberg.org/.
    [41] Nee V, Svedberg R (2008) Economic Sociology and New Institutional Economics, In Handbook on New Institutional Economics, Menard. C. and Shifley M. (eds), 2008 Springer-Verlag Berlin Heidelberg, 789-818.
    [42] North DC (1990) Institutions, Institutional Change, and Economic Performance, Cambridge University Press.
    [43] North DC (1993) Economic Performance through Time. Lecture to the memory of Alfred Nobel. Available from: https://www.nobelprize.org/prizes/economic-sciences/1993/north/lecture.
    [44] North DC (2005) Understanding the process of Economic Change, Princeton University Press, 2005. Available from: http://press.princeton.edu/chapters/s7943.html.
    [45] North DC (2008) Institutions and the Performance of Economies over Time, In: Handbook on New Institutional Economics, Menard. C. and Shifley M. (eds). Springer-Verlag. Berlin Heidelberg: 21-30.
    [46] North DC, Thomas RP (1972) The Rise of the Western World: A New Economic History, Douglass C. North and Robert P. Thomas, Cambridge University Press.
    [47] North DC, Weingast BR (1989) Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England. J Econ History, 803-832.
    [48] Ohnsorge FL, Stocker M, Some MY (2016) Quantifying Uncertainties in Global Growth Forecasts. World Bank Policy Research Working Paper Report, No.WPS7770. Available from: http://go.worldbank.org/.
    [49] Ostrom E (1990) Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge, Cambridge University Press.
    [50] Parthasarathi P (2011) Why Europe Grew Rich and Asia Did Not: Global Economic Divergence, 1600-1850, Cambridge University Press.
    [51] Perinetty D (2013) The Nature of Virtue, In: Oxford Handbook of British Philosophy in the Eighteenth Century, Oxford University Press, 333-368.
    [52] Pincus SCA, Robinson JA (2014) What Really Happened During the Glorious Revolution? In: Institutions, Property Rights, and Economic Growth: The Legacy of Douglass North, Galiani Sebastian and Sened Itai (eds.), Cambridge University Press, 192-222.
    [53] Plato Laws (2008) The Project Gutenberg E-book. Available from: https://www.gutenberg.org/.
    [54] Scotti C (2013) Surprise and Uncertainty Indexes: Real-Time Aggregation of Real-Activity Macro Surprises. Board of Governors of the Federal Reserve System International Finance Discussion Paper, No. 1093. Available from: http://www.federalreserve/.
    [55] Smollett T (1860) From William and Mary to George II, In: Hume David, Smollett Tobias, Farr E. and Nolan E. H. A History Of England From Early Times. In Three Volumes. Volume II. Editor: David Widger. Available from: https://www.gutenberg.org/.
    [56] Toynbee AJ (1934) A Study of History, Vol. I-III, Oxford University Press.
    [57] Zinn JO (2019) The meaning of risk-taking-key concepts and dimensions. J Risk Res 22.
    [58] Voigt S (2013) How (not) to measure institutions. J Inst Econ 9: 1-26.
    [59] Wang C (2013) Can institutions explain cross country differences in innovation activity? J Macroecon 37: 128-145. doi: 10.1016/j.jmacro.2013.05.009
    [60] Wakker PP (2008) Uncertainty, The New Palgrave Dictionary of Economic,. Second Edition. Eds. Steven N. Durlanf and Lawrence E. Blume, Palgrave Macmillan.
    [61] Weber M (1920 [1958]) The Protestant Ethic and the Spirit of Capitalism, Talcott Parsons (trans.), New York: Scribners.
    [62] Williamson C (2009) Informal institutions rule: institutional arrangements and economic performance. Public Choice 139: 371-387. doi: 10.1007/s11127-009-9399-x
    [63] Williamson OE (1985) The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting, New York, The Free Press. Available from: http://www.bookre.org/reader?file=1066388&pg.
    [64] Williamson OE (2002) The Theory of the Firm as Governance Structure: From Choice to Contract. J Econ Perspect 16: 171-195. doi: 10.1257/089533002760278776
    [65] World Bank (2014) Risk and opportunity: Managing Risk for Development. Washington, DC. Available from: https://openknowledge.woldbank.org/handle/10986/16092.
  • Reader Comments
  • © 2020 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)
通讯作者: 陈斌, bchen63@163.com
  • 1. 

    沈阳化工大学材料科学与工程学院 沈阳 110142

  1. 本站搜索
  2. 百度学术搜索
  3. 万方数据库搜索
  4. CNKI搜索

Metrics

Article views(4309) PDF downloads(455) Cited by(1)

Article outline

Other Articles By Authors

/

DownLoad:  Full-Size Img  PowerPoint
Return
Return

Catalog