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The Concept of Institution: Context and Meaning

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  • Piet Keizer

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Abstract

When trying to understand what is meant by the concept of institution we must analyse the context in which institutions are assumed to play their role. In a typical economic analysis institutions are rules that serve the interests of economic-rational actors, and must enhance the efficiency of their actions. In a typical sociological analysis institutions are rules that serve the interests of social actors, and must enhance the formation of stable systems of hierarchically ranked groups. In the real world human behaviour also has a psychic aspect. In a typical psychological analysis institutions must promote the integration of different parts of a personality. This article assumes that in real life humans are driven by a composite of three categories of forces, namely the economic, the social and the psychic motive. Real life institutions have the function to mould these drives in such a way that economic, social and psychic goals can be reached more effectively. As a matter of illustration of this moulding process a short sketch of the emergence of the Dutch welfare state is given.

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Bibliographic Info

Paper provided by Utrecht School of Economics in its series Working Papers with number 08-22.

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Length: 21 pages
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:use:tkiwps:0822

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Keywords: economic; sociological; psychological; institution; welfare state;

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  1. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March.
  2. Pieter Keizer, 2005. "A socio-economic framework of interpretation and analysis," International Journal of Social Economics, Emerald Group Publishing, vol. 32(1/2), pages 155-173, January.
  3. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
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