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No institution is a free lunch: a reconstruction of Ronald Coase

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  • Ugo Pagano

Abstract

The two major contributions of Ronald Coase, written at distant points of his long life, have been often interpreted as different and, somehow, contradicting views of the merits of the market mechanism. We argue that the underlying point of the two articles is the same and it can be summarized by the statement that no institution is a free lunch. When the unity of the Coasian theory is properly understood, it offers a powerful challenge to standard neo-classical production theory and opens new analytical tools to understand and to compare the institutions of production.
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  • Ugo Pagano, 2012. "No institution is a free lunch: a reconstruction of Ronald Coase," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 59(2), pages 189-200, July.
    • Handle: RePEc:spr:inrvec:v:59:y:2012:i:2:p:189-200
    DOI: 10.1007/s12232-012-0154-0
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    References listed on IDEAS

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    1. Ugo Pagano, 2010. "Marrying in the Cathedral: A Framework for the Analysis of Corporate Governance," Chapters, in: Alessio M. Pacces (ed.), The Law and Economics of Corporate Governance, chapter 6, Edward Elgar Publishing.
    2. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    3. Kevin Keasey & Steve Thompson & Mike Wright (ed.), 1999. "Corporate Governance," Books, Edward Elgar Publishing, volume 0, number 1708.
    4. Pagano, Ugo, 2011. "Interlocking complementarities and institutional change," Journal of Institutional Economics, Cambridge University Press, vol. 7(3), pages 373-392, September.
    5. Pagano, Ugo, 2000. "Public markets, private orderings and corporate governance," International Review of Law and Economics, Elsevier, vol. 20(4), pages 453-477, December.
    6. Chichilnisky, G. & Heal, G. & Pagano, U., 1994. "Property Rights and Returns to Scale: Patents, Firms and Market Failure," Papers 94-08, Columbia - Graduate School of Business.
    7. Usher, Dan, 1998. "The Coase theorem is tautological, incoherent or wrong," Economics Letters, Elsevier, vol. 61(1), pages 3-11, October.
    8. Vives,Xavier (ed.), 2000. "Corporate Governance," Cambridge Books, Cambridge University Press, number 9780521781640.
    9. Coase, R H, 2000. "The Acquisition of Fisher Body by General Motors," Journal of Law and Economics, University of Chicago Press, vol. 43(1), pages 15-31, April.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. In memoria di Ronald Harry Coase
      by info@crusoe.it in Robinson Crusoe on 2013-09-18 15:00:00

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    Cited by:

    1. Šastitko, Andrej E., 2013. "Effects of third party errors," EconStor Preprints 121747, ZBW - Leibniz Information Centre for Economics.
    2. Nicita, Antonio & Pagano, Ugo, 2016. "Finance-technology complementarities: An organizational equilibria approach," Structural Change and Economic Dynamics, Elsevier, vol. 37(C), pages 43-51.
    3. Ugo Pagano, 2013. "Technical assets and property rights," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 18, Edward Elgar Publishing.
    4. Ugo Pagano, 2016. "Governance, Institutional Reforms and Modernisation of Public Sector," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 55(4), pages 257-265.
    5. Massimiliano Vatiero, 2013. "Prof. Ronald H. Coase. An Obituary," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2013(2), pages 157-159.
    6. Shastitko, Andrey, 2014. "Effects of the Third Party Errors," Published Papers re9021, Russian Presidential Academy of National Economy and Public Administration.
    7. Ugo Pagano & Massimiliano Vatiero, 2017. "Positional goods and legal orderings," Department of Economics University of Siena 773, Department of Economics, University of Siena.
    8. Antonio Nicita, 2014. "The legacy of R. Coase (1910–2013): toward a theory of institutional 'moving equilibrium'?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 61(2), pages 93-108, June.
    9. A. Nicita & M. Rizzolli & H. Smith, 2012. "Exploring Coase’s world: an introduction," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 59(2), pages 111-120, July.

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    More about this item

    Keywords

    Coase; Returns to scale; Transaction costs; Production entitlements; B290; D020; D290; L230;
    All these keywords.

    JEL classification:

    • B29 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Other
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D29 - Microeconomics - - Production and Organizations - - - Other
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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