Williamson’s legacy: A lasting influence

Building mainly on Coase (but also Arrow, Barnard, Simon, and many others), Williamson played a central role in the establishment and academic recognition of the economics of organizations and more generally the economics of institutions. Over numerous contributions, he introduced and/or enriched a set of interdependent concepts regarding transactions, rights, and contracts, defining the “golden triangle” of New Institutional Economics. The resulting framework provides solid theoretical ground to the analysis of the many alternative ways to organize the transfer/allocation of rights through transactions and delivered what became a key explanation to the trade-off among alternative organizational solutions faced by decision-makers. In doing so Williamson pointed out the need for an in-depth revision of traditional micro-economics and opened room for the analysis of the governance of these different structures, at the junction of economics, management, and sociology. It also led Williamson to consider the institutional embeddedness of all these micro-institutions, contributing to bridge the gap with the “macro-variant” of NIE personified by Douglass North. Williamson explored this connection mainly through the case of regulation, thus establishing links between economics and the law. In all these aspects his legacy has been and remains a source of lasting influence.