Coordination mechanisms failures: An institutional approach

The article attempts to support and develop the ideas set out in the work by L. I. Jacobson concerning the presence of a self-regulation mechanism for three macrosystems and the possibility of combining institutions. From the author's point of view, the identified failures of the market, state and society can be explained using another methodology - based on the new institutional economic theory, since the manifestation and factors of failures are clearly associated with the characteristics of behavioral prerequisites (bounded rationality and opportunistic behavior), which underlie the approach of the new institutional economic theory. The article offers a more direct way to explain the comparative inefficiency of the three coordination mechanisms based on the Coase theorem, since it is the Coase theorem that allows us to assert that with positive transaction costs we have different discrete institutional alternatives with limited efficiency of each of these alternatives. The article shows that the combination of institutions can be also explained on the basis of the Coase theorem, since limited efficiency creates space for the invasion of another institutional coordination mechanism, and thereby provides prerequisites for combination. Cases of "strong" interaction in the article are explained by reference to the structure of informal institutions and are treated as rather rare exceptions. The last part of the article analyzes the role of trust and social capital in economic theory. It offers an interpretation of trust as an implicit contract - an extended exchange of expectations - and an indicator of the effectiveness of the social coordination mechanism, the inverse of the indicator of the level of transaction costs.