This paper explores the interface between institutional theory and Austrian theory. We examine mainstream institutionalism as exemplified by D. C. North in his work with Wallis and Weingast on the elite compact theory of social order and of transitions to impersonal rights, and propose instead an Austrian process-oriented perspective. We argue that mainstream institutionalism does not fully account for the efficiency of impersonal rules. Their efficiency can be better explained by a market for rules, which in turn requires a stable plurality of governance providers. Since an equilibrium of plural providers requires stable power polycentricity, the implication goes against consolidating organized means for violence as a doorstep condition to successful transitions. The paper demonstrates how to employ Ostroms’ Bloomington School Institutionalism to shift, convert, and recalibrate mainstream institutionalism's themes into an Austrian process-oriented theory.
The paper was conceived within the framework of NORMEV, CNCSIS code TE_61, no. 22/2010, a project of the Research Center for Applied Ethics, Department of Philosophy at the University of Bucharest. Thanks go to Emanuel Socaciu, Laurentiu Gheorghe, Constantin Vica, Radu Uszkai for valuable suggestions on early drafts. The authors are grateful to the F.A. Hayek Program for Advanced Study in Philosophy, Politics and Economics at Mercatus Center, George Mason University for its support and especially thankful to Christopher J. Coyne and Virgil H. Storr for their comments that vastly improved the manuscript.
Sterpan, I. and Aligica, P.D. (2015), "Transitions to Open Access Orders and Polycentricity: Exploring the Interface between Austrian Theory and Institutionalism", New Thinking in Austrian Political Economy (Advances in Austrian Economics, Vol. 19), Emerald Group Publishing Limited, Bingley, pp. 145-166. https://doi.org/10.1108/S1529-213420150000019008
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