chapter 9
...................................................................................................................................................ECONOMIC
INSTITUTIONS
...................................................................................................................................................michael moran
1 Economic Institutions and Political
Institutions
.........................................................................................................................................................................................
Why include a chapter on economic institutions in a handbook ofpolitical
institutions? For brevity we can give three answers; all are illuminating about the
way the political and the economic are interconnected.
TheWrst is that the very recognition of an ‘‘economic institution’’ is a political act.
Indeed a constructed distinction between ‘‘market’’ and ‘‘state’’ is a basic operating
principle of the ideology of market capitalism: ‘‘In aperfectlycompetitive market, as
idealized by neoclassical economists, there is no organization among or between
buyers and sellers’’ (Lazonick 1991 , 60 ). But whatever the policy arguments for
operational separation, analytically the divide makes little sense: the ‘‘economy’’ is
embedded in civil society, and the state is likewise embedded in that wider civil sphere.
This fact of ‘‘construction’’ reXects the second reason for the political scientist’s
interest in economic institutions: How well or badly ‘‘economic’’ institutions per-
form is in part a function of how they are governed. In turn, how they are governed,
we shall see, is in large part shaped by state bodies and by the wider political sphere.
* I am grateful to the editors and to R. E. Goodin for comments on earlier drafts.