Working Paper
Institutionalism Ancient, Old and New

This paper argues for an ‘ancient’ institutional school, predating Thorstein Veblen’s ‘old’ institutionalism. In this view, going back as far as the thirteenth century, institutions tended to be seen as specific to a mode of production. Here both institutions and development itself are context-specific and activity-specific. Much clearer than today the arrows of causality of economic development go from the mode of production to the institutional setting, not vice versa. In order to understand development, institutions can also usefully be divided into Hayekian institutions that facilitate equilibrium and Schumpeterian institutions that enable the dynamics of development and structural change.