AN ECONOMIC-ANALYSIS OF THE NEW INSTITUTIONAL ECONOMICS

The market for academics determines the evolving university institutions. This in turn shapes the incentives and the behavior of academics with regard to the New Institutional Economics. The highly competitive market for academics prevalent in North America and in future Europe induces abstract research with little concern for specific institutions, while interdisciplinarity is neglected. Restricted, less competitive markets existing at the borders of economics and partly in law and other social sciences enable and induce academics to study concrete institutions and to engage in advising and in a political career, transferring insights from New Institutional Economics into practical policy.