Knowledge and the Role of Institutions in Economic Theory
For many years there has been a dispute between the proponents of two different methodological views. These can be characterized as antiand proneoclassical. The former maintains that since a neoclassical market economy can be viewed as being merely one particular form of institutional setting, neoclassical economics is merely a special case of institutionalism (for example, Clarence Ayres, John Gambs, and Gunnar Myrdal). The latter declares that since one can explain any institutional setting and its evolution as merely the consequences of the logic of choice (that is, of optimization facing given constraints), our understanding of institutions is merely another example of neoclassical analysis (for example, James Buchanan, Gordon Tullock, and Douglass North).