Institutional Equilibrium in Redistribution Systems
Institutional Equilibrium in Redistribution Systems Petr Wawrosz
1. Introduction
Contemporary economic theories recognize a row of factors influencing human behaviour; material factors like precious resources or available technologies are not the only ones, various standards (rules), limitations, etc. also belong among these factors defining which behaviour is allowed or forbidden, i.e. which behaviour is desirable (right) and which is not. Institutional economics that focuses on the issues of these standards and their effects on human behaviour can, figuratively speaking, celebrate its success. Recent publications prove the development of institutional economics. On behalf of the foreign books we can name, e.g. Furubotn and Richter (2005), Chang (2007), Ménard and Shirley (2008), Brousseau and Glachant (2008), Chavance (2009). Let us mention a few Czech publications e.g. Mlčoch (2005), Voight (2008). Despite of this development, many questions regarding institutional economics still stay unanswered. For one, the term institution has not yet been definitely determined. Voight (2008) states that the two basic approaches to defining institutions is as follows:
1. institutions as a result of a game;
2. institutions as the rules of a game.
Both approaches suffer from certain one-sidedness. If institutions are a result of games, then it must be asked, what defines the rules of these games. And if the institutions are the rules of the game, then it is necessary to determine whether the given rules are not the consequence (result) of some game.
In this text, we will keep to the usual understanding (in literature) of institutions as the rules of a game (see, e.g. North, 1990; North, 1991; Furubotn and Richter, 2005; Voight, 2008). The term game can be defined as an interactive economic situation, where decisions (behaviour) of a certain entity are effected by the decisions (behaviour) of other entities and tend to effect the decisions (behaviour) of other
1. Introduction
Contemporary economic theories recognize a row of factors influencing human behaviour; material factors like precious resources or available technologies are not the only ones, various standards (rules), limitations, etc. also belong among these factors defining which behaviour is allowed or forbidden, i.e. which behaviour is desirable (right) and which is not. Institutional economics that focuses on the issues of these standards and their effects on human behaviour can, figuratively speaking, celebrate its success. Recent publications prove the development of institutional economics. On behalf of the foreign books we can name, e.g. Furubotn and Richter (2005), Chang (2007), Ménard and Shirley (2008), Brousseau and Glachant (2008), Chavance (2009). Let us mention a few Czech publications e.g. Mlčoch (2005), Voight (2008). Despite of this development, many questions regarding institutional economics still stay unanswered. For one, the term institution has not yet been definitely determined. Voight (2008) states that the two basic approaches to defining institutions is as follows:
1. institutions as a result of a game;
2. institutions as the rules of a game.
Both approaches suffer from certain one-sidedness. If institutions are a result of games, then it must be asked, what defines the rules of these games. And if the institutions are the rules of the game, then it is necessary to determine whether the given rules are not the consequence (result) of some game.
In this text, we will keep to the usual understanding (in literature) of institutions as the rules of a game (see, e.g. North, 1990; North, 1991; Furubotn and Richter, 2005; Voight, 2008). The term game can be defined as an interactive economic situation, where decisions (behaviour) of a certain entity are effected by the decisions (behaviour) of other entities and tend to effect the decisions (behaviour) of other