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Richard Posner's economics of organization

Published online by Cambridge University Press:  25 January 2010

YOUNG BACK CHOI*
Affiliation:
Department of Economics and Finance, St. John's University, New York, United States
*

Abstract:

Posner's economics of organization yields an unconventional view that private organizations operating in the market, the publicly held US business corporation, despite the profit motive, ends up being inefficient, paying excessive compensation to CEOs, while some public organizations, the US federal judicial system (and the judicial system of Continental Europe and Japan), despite the insulation of judges from most of incentives and the near complete autonomy afforded to them, works reasonably well. Unfortunately, Posner does not state clearly the criteria by which he judges one ‘excessive’ and the others ‘works reasonably well’, nor does he explain well why professional norms of judges that play a crucial role in public organizations are not a factor in business organizations.

Type
Research Article
Copyright
Copyright © The JOIE Foundation 2010

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References

Posner, Richard A. (2010), ‘From the new institutional economics to organization economics: with applications to corporate governance, government agencies, and legal institutions’, Journal of Institutional Economics, 6 (1): 137.CrossRefGoogle Scholar