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Interlocking Complementarities and Institutional Change

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  • Ugo Pagano

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Abstract

In biology, the laws that regulate the structuring and change of complex organisms, characterised by interlocking complementarities, are different from those that shape the evolution of simple organisms. Only the latter share mechanisms of competitive selection of the fittest analogous to those envisaged by the standard neoclassical model in economics. The biological counterparts of protectionism, subsidies and conflicts enable complex organisms to exit from long period of stasis and to increase their capacity to adapt efficiently to the environment. Because of their interlocking complementarities, most institutions share the laws governing the structure and change of complex organisms. We concentrate on the complementarities between technology and property rights and consider historical cases in which organizational stasis has been overcome by mechanisms different from (and sometimes acting in spite of) competitive pressure. The evolution of institutions cannot be taken for granted; but even when institutions seem frozen for ever by their interlocking complementarities, their potential for change can be discovered by analysis of those interactions

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Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 598.

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Date of creation: Aug 2010
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Handle: RePEc:usi:wpaper:598

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  1. Earle, John S. & Pagano, Ugo & Lesi, Maria, 2006. "Information technology, organizational form, and transition to the market," Journal of Economic Behavior & Organization, Elsevier, vol. 60(4), pages 471-489, August.
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Cited by:
  1. Ugo Pagano, 2012. "No institution is a free lunch: a reconstruction of Ronald Coase," International Review of Economics, Springer, vol. 59(2), pages 189-200, July.
  2. Landini, Fabio, 2013. "Institutional change and information production," Journal of Institutional Economics, Cambridge University Press, vol. 9(03), pages 257-284, September.
  3. Ugo Pagano, 2012. "Love, War and Cultures: an Institutional Approach to Human Evolution," Department of Economics University of Siena 632, Department of Economics, University of Siena.
  4. Samuel Bowles, 2013. "Darwin, Marx and Pagano: a comment on “Love, War, and Cultures”," Journal of Bioeconomics, Springer, vol. 15(1), pages 71-81, April.
  5. Landini, Fabio, 2012. "Technology, property rights and organizational diversity in the software industry," Structural Change and Economic Dynamics, Elsevier, vol. 23(2), pages 137-150.

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