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Facing Crises: Economy, Democvracy, and Political Transaction Costs

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  • Claude Ménard

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper investigates the issues coming out of the existence of political transactiuon costs. Section 2 digs deeper in the concept of political transaction costs and assesses its relevance for understanding the (often chaotic) running of democracy. Section 3 discusses the conditions framing the formation and implementation of coalitions, pointing out the key role of ‘meso-institutions' in making coalitions possible and stable. Section 4 shows the complexity of issues involved in keeping political transaction costs under control, a necessary condition for democracies to survive. Section 5 derives some lessons from this analysis to explore why reforms are so difficult to draw and implement. Section 6 concludes with some comments about the hybrid nature of democratic regimes and the sources of their fragility.

Suggested Citation

  • Claude Ménard, 2017. "Facing Crises: Economy, Democvracy, and Political Transaction Costs," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-04000979, HAL.
    • Handle: RePEc:hal:cesptp:hal-04000979
    DOI: 10.1007/978-3-319-52168-8
    Note: View the original document on HAL open archive server: https://univ-rennes.hal.science/hal-04000979
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    References listed on IDEAS

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    1. Elinor Ostrom, 2014. "Do institutions for collective action evolve?," Journal of Bioeconomics, Springer, vol. 16(1), pages 3-30, April.
    2. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    3. Mã‰Nard, Claude, 2014. "Embedding organizational arrangements: towards a general model," Journal of Institutional Economics, Cambridge University Press, vol. 10(4), pages 567-589, December.
    4. Gary D. Libecap, 2014. "Addressing Global Environmental Externalities: Transaction Costs Considerations," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 424-479, June.
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