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The Institutional Revelation: A comment on Douglas W. Allen’s The Institutional Revolution

Author

Listed:
  • Joel Mokyr
  • José-Antonio Espín-Sánchez

Abstract

Institutions are a central topic in economic history. Allen’s work differs in that he is interested in institutions per se, not as a means to economic performance and prosperity. The purpose of this book is to explain the institutions of the premodern world and to show why they changed. His argument is that in a Principal-Agent situation, before the Industrial Revolution, it was harder for the Principal to attribute whether the failure of the project was due to acts of nature or some acts of the agent, hence the “strange” institutions. In a modern world, with a much improved monitoring technology, we can use more “efficient” institutions, hence the Institutional Revolution. Although innovative and interesting, the author over-stresses his argument. Much more than monitoring in a principal-agent relationship is needed to explain the Industrial Revolution and the changes in institutions associated with it. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Joel Mokyr & José-Antonio Espín-Sánchez, 2013. "The Institutional Revelation: A comment on Douglas W. Allen’s The Institutional Revolution," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(4), pages 375-381, December.
    • Handle: RePEc:kap:revaec:v:26:y:2013:i:4:p:375-381
    DOI: 10.1007/s11138-013-0235-7
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    References listed on IDEAS

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    1. Mokyr, Joel, 2001. "The rise and fall of the factory system: technology, firms, and households since the industrial revolution," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 55(1), pages 1-45, December.
    2. Regina Grafe, 2012. "Distant Tyranny: Markets, Power, and Backwardness in Spain, 1650-1800," Economics Books, Princeton University Press, edition 1, number 9625.
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    Cited by:

    1. Van Bavel, Bas, 2015. "History as a laboratory to better understand the formation of institutions," Journal of Institutional Economics, Cambridge University Press, vol. 11(1), pages 69-91, March.
    2. Markus Lampe & Paul Sharp, 2017. "ÔRationalÕ Farmers and the Emergence of Modern Accounting in Danish Dairying," Working Papers 0115, European Historical Economics Society (EHES).

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    More about this item

    Keywords

    Institutions; Technological change; Innovation; Monitoring; Moral hazard; B15; D72; N23; N43;
    All these keywords.

    JEL classification:

    • B15 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Historical; Institutional; Evolutionary
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913

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