of the chapter, about the boundaries between ‘‘economic’’ and ‘‘political’’
institutions. The second is the importance of agency, for this unstable world of
global webs of governance precisely creates spaces for the intervention of human
agency.
4 Economic Institutions and
Capitalism
.........................................................................................................................................................................................
Examining the institutions of economic regulation has reminded us of key themes
in the study of institutions generally: the importance of the comparative method;
the key issue of performance eVectiveness; and the role or otherwise of agency in
institutional life. All these now recur in examining economic institutions and
capitalism.
The history of the comparative study of economic institutions, notably of the
institutions of capitalism, shows that a focus on institutions did not begin with
‘‘institutionalism,’’ old or new. The focus is as old as the political economy of the
market, and is central to the ‘‘classical’’ traditions of political economy, from Smith
to Schumpeter. It is also central to sub-Welds as diverse as the anthropology of
economic life and the study of economic history; indeed the most important
modern institutionalist revivalist, North, began precisely with historical problems. 4
The comparative study of economic systems was prolonged in the twentieth
century by the rise of alternatives to capitalism, in the form both of corporatist
fascism and command Communism (Wiles 1977 ). But the most important form
taken by the modern comparative study of economic institutions lies in the
‘‘varieties of capitalism’’ literature, for the straightforward reason that capitalism
proved the most durable of the great twentieth-century alternatives. The compara-
tive study of capitalist institutions is, we shall see, important for a host of practical,
policy related reasons. But it is also important because it highlights the institu-
tionally contingent character of market organization; because it links to key issues
of performance, economic and political; and because the spread of capitalist
organizational forms has made this comparative diVerentiation the key to our
understanding of modern political economies.
4 For instance North and Thomas 1973 ; and see North’s discussion of his own work in North
1991 ,7V.
economic institutions 151