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Ideology, interest groups, and institutional change: the case of the British prohibition of wages in kind

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  • TAN, ELAINE S.

Abstract

The new institutional economics has emphasized the importance of ideology in determining the content and direction of institutional change. Ideology can also determine when interest groups succeed in achieving legislative favor. The case of the regulation of in-kind wages in Britain shows that factors highlighted in mainstream political economy (such as interest group strength and organization, self-interest of legislators, and coalitional partners) were important. However, the interaction between relative price changes and social ideology was also significant in explaining the shape and timing of legislative changes. Changes in relative prices gave labor groups the incentive to seek legal protection from non-monetary wages, but they obtained protection only if they met certain criteria established by the prevailing ideology. Changes to that ideology resulted in further legislative changes granting cash wages to most industrial workers.

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  • Tan, Elaine S., 2005. "Ideology, interest groups, and institutional change: the case of the British prohibition of wages in kind," Journal of Institutional Economics, Cambridge University Press, vol. 1(2), pages 175-191, December.
    • Handle: RePEc:cup:jinsec:v:1:y:2005:i:02:p:175-191_00
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    Cited by:

    1. DEMPSTER Gregory & KLUVER Jesse, 2019. "Institutional Entrepreneurship In Health Management: A Survey Experiment On Appreciative Inquiry®," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 14(1), pages 34-50, April.
    2. Ruttan, Vernon W., 2008. "Induced Technical Change, Induced Institutional Change and Mechanism Design," Staff Papers 7050, University of Minnesota, Department of Applied Economics.
    3. Karim Khan, 2013. "Distributive consideration in institutional change: the case of Zia’s Islamization policy in Pakistan," Constitutional Political Economy, Springer, vol. 24(2), pages 139-165, June.
    4. Elaine Tan, 2011. "Scrip as private money, monetary monopoly, and the rent‐seeking state in Britain," Economic History Review, Economic History Society, vol. 64(1), pages 237-255, February.

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