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Economic Analysis of Institutions: Nominalism and Definition by Effect

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  3. Journal of Contextual Economics – Schmollers Jahrbuch
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Stettler, M. Economic Analysis of Institutions: Nominalism and Definition by Effect. Journal of Contextual Economics – Schmollers Jahrbuch, 99999(), 1-20. https://doi.org/10.3790/schm.2025.401891
Stettler, Michael A. "Economic Analysis of Institutions: Nominalism and Definition by Effect" Journal of Contextual Economics – Schmollers Jahrbuch 99999., 2025, 1-20. https://doi.org/10.3790/schm.2025.401891
Stettler, Michael A. (2025): Economic Analysis of Institutions: Nominalism and Definition by Effect, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 99999, iss. , 1-20, [online] https://doi.org/10.3790/schm.2025.401891
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Economic Analysis of Institutions: Nominalism and Definition by Effect

Stettler, Michael A.

Journal of Contextual Economics – Schmollers Jahrbuch, Online First : pp. 1–20

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/schm.2025.401891
Language
Multiple languages
Pages
20
License
open-access CC BY 4.0
Keywords

Author Details

Michael A. Stettler, School of Economics, University of Johannesburg, Johannesburg, South Africa

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Abstract

Neo-institutional economics covers various subject areas that are not the traditional domain of economics, while still employing the tools of economic analysis such as: rational choice theory and equilibrium theory. Many fields of study, including law, firms, property, etc., are characterised as efficient institutions. It is a flawed approach, because neo-institutionalism portrays past events, what Karl Mittermaier called ex-post facts, as if they were structural facts, or ex-ante facts. In Samuelson’s revealed preference theory, choices (ex-post facts), are assigned a new name, viz. revealed preferences (ex-ante facts), and preferences are reduced to their effects. Neo-institutionalism follows Samuelson in this regard, defining things by their effect: defining institutions as constraints, property as property rights, firms as contracts, etc. In doing so, neo-institutionalism eliminates the distinctions between concepts; the effect can stand as the primary aspect of the institution, and institution becomes a name for a constraint. This mixes up two orders of fact, giving past events (ex-post facts) a name associated with greater permanence (ex-ante facts). These theoretical moves belong to a nominalist Weltanschauung, one already proposed by Pareto, who called himself the most nominalist of nominalists.

Table of Contents

Section Title Page Action Price
Michael A. Stettler: Economic Analysis of Institutions: Nominalism and Definition by Effect 1
1. Introduction 1
2. Nominalist Weltanschauung 3
2.1 Nominal Definitions 4
2.2 The Problem of Similarity 4
2.3 Choices as ex-post Facts and ex-ante Facts 6
3. Nominalism in Economics 6
3.1 Choice and Preferences 7
3.2 Choice and Utility Maximisation 8
4. Institutions as a Constraint 8
4.1 Institutions Defined by Effect 9
4.2 The Common Pool Problem and Quantity Constraints 9
4.3 Institutions as a Behavioural Constraint 10
5. Property and Property Rights 12
6. Theory of the Firm 14
7. Econominalism 15
8. Conclusion 17
References 18

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