Oslo Summer School in Comparative Social Science Studies 1995

Economic Institutions Compared

Main discipline: Economics
Lecturer: Professor Karl Ove Moene
Institution: University of Oslo, Norway
Dates: 31 July- 4 August, 1995


Traditional economic theory often builds on specific but hidden assumptions on property rights and decision making structures. Economic policy makers, however, are increasingly interested in alternative institutional designs. The present course highlights the role of institutions by comparing the performance of different institutional set ups. Four main topics will be covered in eight lectures:

  1. The firm, ownership and remuneration. Why do we have firms? Why do we not rely on specialization and individual market exchange of intermediate products? Puttingout or sub contracting systems are compared to different types of team work arrangements in factories under varying assumptions about property rights, control and power. Emphasis is on effort, pay and employment.
  2. Macro economic consequences of micro motives. The way production and distribution is organized at the micro level have economic implications for how the macro economy performs. We study profit sharing, labour management, unions and the bargaining society. As an application we consider Social Democracy. How did Social Democracy work and why does it decline today?
  3. Bureaucracy, Democracy and Political Competition. Under this heading we study various questions on the borderline between economics and political science. What are the interest ing similarit ies between compet it ion on the market place and competition at the political arena? What happens in the absence of clear property rights? Under what circumstances are corruption and favouritism most likely to arise and what are the consequences? We compare markets versus bureaucracies, hierarchies versus poliarchies and dictatorships versus democracy.
  4. Centralized Systems, Reforms and Transitions. To understand centralized systems we have to distinguish between hard and soft budget constraints, demand constrained and resource constrained systems. Why did shortages persist for such a long period under communism. What happens when communism dissolves. Should the former communists countries look east or west for a row model. How do reforms differ in Eastern Europe and China?

Basic reading
Participants are expected to be familiar with intermediate microeconomic theory (including standard calculus). The topics of the course will be covered by a series of articles made available to the participants. As a background reading some of the topics are covered in;

The lecturer
Karl Ove Moene is a professor in economics at the University of Oslo. His research areas are comparative institutions, poverty and labour economics. He is the editor of Scandinavian Journal of Economics.