Programme PhD Term V Academic Year 2021-22

Course title Foundations of New Institutional Economics Area Centre for Management in Agriculture,Economics Credits 1.00

Prof. Ranjan Kumar Ghosh

Course Description & Objectives
Objective and Overview:
This course aims to equip participants with tools and frameworks to identify institutions and institutional change in the policy process. Even when an economic system is modeled perfectly, it is the institutional structure and governance that determines its real performance. In the words of Ronald Coase, “…the productivity of the economic system depends on specialization, but specialization is only possible if there is exchange. The lower the costs of exchange (transaction costs if you will), the more specialization there will be and the greater the productivity of the system. But the costs of exchange depend on the institutions of a country: its legal system, its political system, its social system, its educational system, its culture, and so on. In effect it is the institutions that govern the performance of an economy, and it is this that gives the ‘new institutional economics’ its importance for economists.” In the pursuit of understanding institutions – laws, rules, customs, and norms – that govern real economic systems, new institutional economics adopts a methodology that is not restricted to model driven deduction, but also applies abduction, which is the science of “seeking truth from facts”.

This course begins by laying down the necessary ground-rules for understanding institutional evolution and design, such as: agency and contracts; incentives and transaction costs; property rights and firm behavior; collective action and human nature. The major works of important institutionalists such as Ronald Coase, Douglass North, John R. Commons, Oliver Williamson, Mancur Olson, Elinor Ostrom and Daniel Bromley, amongst others are covered. It then works through the scripts to understand real economic systems through empirical examples and cases. Subsequently, the course engages with participants in identifying institutional aspects in their individual research programs. 

The course will be largely in a round table discussion format. There will be an emphasis on participant´s current issues of interest and develop new research ideas using learning from institutional analysis. This will involve, amongst other things, problem identification, literature review and abstract writing exercises. Participants will be expected to select areas of their research interest and work with them throughout the course duration by applying institutional frameworks and concepts. Overall, class discussions and presentations will aim to cultivate thinking through new lens of institutions, and add layers of richer arguments. The course is open to students from all backgrounds, with the pre-requisite of exposure to graduate level microeconomics and/or industrial organization.