This study examines how meso-level institutions within Ostrom’s polycentric governance systems guide farmers’ deliberative preferences for collective adaptation to saltwater inundation in the Philippines and Viet Nam. Specifically, the paper investigates three mechanisms of meso-institutional influence: legitimacy creation, belief formation, and social enforcement that shape farmers’ collective adaptation. Using multinomial logistic regression with cluster-robust standard errors on survey data from rice farmers, results show that institutional embeddedness depends on both physical exposure and socioeconomic capacity; information access enhances belief accuracy and collective preferences in contexts where institutional trust is high; and legitimacy-based feasibility significantly strengthens support for collective measures. Findings also show country differences in managing high-externality adaptation measures, with only Viet Nam exhibiting sensitivity to institutional quality at higher externality levels. Comparative results reveal that autonomous, participatory meso-institutions in the Philippines generate stronger deliberative preferences and more cohesive collective adaptation than state-centred structures in Viet Nam.

Medieval lex mercatoria refers to the customary commercial law developed by merchants to govern cross-border trade, operating alongside and sometimes independently of territorial legal systems. This paper compares that historical form of autonomous ordering with contemporary blockchain governance. Both create institutional frameworks that facilitate exchange among diverse actors and provide mechanisms that function, to varying degrees, outside traditional state authority. The key difference lies in how rules are generated and enforced: medieval merchant law relied on flexible norms interpreted by merchant courts and other human adjudicators, whereas blockchain systems seek to reduce ambiguity by encoding rules ex ante in smart contracts and automating enforcement. Decentralized decision-making and emerging forms of on-chain adjudication further reimagine dispute resolution without centralized judicial power. The central claim is that both represent polycentric legal orders whose significance ultimately depends on how they interact with, complement, or challenge formal governmental institutions.

In behavioural economics, sludge is a novel umbrella term (introduced by Nobel laureate Richard Thaler) referring to the subjectively experienced excessive frictions in decision-making. Sludge researchers propose incorporating insights from institutional economics by linking sludge to subjective transaction costs that align with the subjectivist tradition in transaction cost theory. However, sludge research relies entirely on the i-frame: an individualistic and internalist (inside-the-brain) notion of decision-making. Although popular, the i-frame results in critical shortcomings and contradictions in sludge analysis. In contrast, I propose a systemic (s-frame) perspective for studying sludge. Along with a subjectivist view, sludge should be understood as an outcome of complex and evolving rule systems. Instead of focusing solely on the cost side of sludge, sludge analysis should be developed to include not only transaction costs but also transaction benefits that are unevenly distributed among heterogeneous actors. Furthermore, decision-making and sludge perception are not purely internal processes but socially extended cognitive processes governed by cognitive institutions and embedded in dynamic social interactions. Shifting the focus of sludge research toward the s-frame will allow us to understand sludge in all its institutional and socio-cognitive complexities.

This Comment assesses the legacy of the 2015 JOIE debate, critiquing the economic conflation of de jure ‘property’ and de facto ‘possession’. Citation analysis confirms the debate’s sustained intellectual footprint, but this did not translate into the lexical shift advocated by its proponents. A text-mining analysis of 58 economics journals finds negligible adoption of the specific term ‘possession’. A broader test for a conceptual basket of related de facto terms also fails to find robust evidence; a fragile signal in one dataset, not replicated in a second. We conclude that no significant, profession-wide lexical adoption occurred.

This paper studies the ‘liberal solidarity’ of Léon Bourgeois through two fundamental and interlinked ‘liberal solidarist principles’: (i) social debt and (ii) the quasi-contract. No real work has been proposed in economics in English in the context of Bourgeois’s work. It is this shortfall that we wish to fill in this article by restoring a little-known ancient thought and proposing an initial contribution to investigating future avenues of research in institutional economics. The solidarism of the Third French Republic allows us to rethink social democratic liberalism from an open and ongoing view of institutions as the driving force behind both individual rights and the collective order. Bourgeois solidarism is an interesting doctrine for rethinking from a moral perspective the role of human duty in economics and, more largely, in society.

Generalized trust supports social cooperation and institutional performance. Formal education is often assumed to foster trust, but competing theories make opposite predictions: the social-intelligence view holds that education sharpens belief accuracy about others’ pro-social behavior, while the selection/exposure view expects a systematic optimistic bias. We test these mechanisms using an original survey in which 800 respondents in Spain estimated the return rates of “lost wallets” across four countries, based on results from previous cross-national field experiments. Respondents misjudged others’ honesty (overestimating returns when no money was involved and underestimating them when money was present) and predicted a decline in honesty as the amount of money in the wallet increased, while actual return rates rose across those conditions. Higher education does not correct these errors or produce consistent optimism. The findings thus challenge both explanations and suggest that the education–trust link operates through other, yet-to-be-identified, institutional or normative pathways.

Organized, competitive wholesale power markets emerged in the U.S. during the 1990s, driven by technological change and regulatory restructuring. Regional Transmission Organizations (RTOs) manage these markets while governing a congestible transmission network whose physical coupling creates ill-defined property rights and persistent coordination problems. The growth of new generations, storage, and digital technologies further strains RTO governance by increasing heterogeneity in participants and business models. Integrating Elinor Ostrom’s common-pool resource (CPR) framework with James Buchanan’s theory of clubs, this paper analyses how RTOs govern reliability through rule-defined exclusion. The analysis argues that reliability is a CPR, but that RTOs formalize a scalable, club-like exclusion regime as a governance institution. Because transmission systems are non-replicable, governance institutions and polycentric oversight must substitute for competitive discipline. Institutional reforms that make boundary rules adaptive and participation more inclusive are essential to preserve reliability while enabling innovation and long-run efficiency.

This paper analyses whether the confiscation of real estate assets from organised crime affects citizens’ trust in government institutions and the legal system. The case of Italy is considered, where confiscation constitutes a distinctive policy tool against mafia-type organisations. The empirical analysis combines individual-level trust data from the Italian National Institute of Statistics’ Aspects of Daily Life survey with regional data on confiscations from the National Agency for Seized and Confiscated Assets for the period 2014–2022. Using linear and non-linear regression models, along with an instrumental variables approach, we find heterogeneous results. The confiscation of real estate assets from mafia organisations increases trust in government institutions and the legal system in the Southern regions, where organised crime is generally stronger. In Central and Northern regions, the positive effect is weaker and confined to the local tiers of government. Here, confiscations reduce trust in the legal system.

For received theories, (suboptimal) temptations arise first, and, consequently, people set up rules or institutions to control them. Hence, any deviation from institutions is suboptimal. However, these received theories face an anomaly, coined here the ‘Holiday License Paradox’: Why would people who adopt optimal institutions turn around and designate ‘holidays’ (cheat days) that allow them to indulge in suboptimal consumption? To solve this paradox, this paper reverses the entry point: people first set up rules – whereas temptations are identifiable only with respect to those rules. This solution raises a new question: what is the origin of rules? People adopt rules to control ‘temerity’, i.e., overconfidence. This raises a further question: what is the origin of temerity? Temerity is a default heuristic expressing the optimal response in life-and-death decisions. Thus, temerity-as-heuristics is rather efficient on average. However, temerity can become excessive, and, at second approximation, people adopt rules to control temerity. Once we regard rules or institutions to come first, i.e., prior to temptations, it becomes possible to solve the Holiday License Paradox.

This symposium grew out of dissatisfaction with the existing theories of institutions. Notwithstanding significant progress in the analysis of the macro-institutions through which systemic rules and norms are established and the micro-institutions through which actors decide and implement transactions within the playing field thus defined, researchers working along one or the other dimension faced a critical and largely unanswered question: how to bridge the gap between these two institutional layers? The selected articles assembled in this issue came out of efforts to identify and understand within a unified theoretical framework the arrangements through which these layers interact. Building on contributions in economics and other social sciences as well as from in-depth empirical studies, these articles explore the relevance of the concept of ‘meso-institutions’ to designate and characterize the devices (e.g. regulatory agencies) and mechanisms (e.g. guidelines) that connect the macro- and micro-institutional layers.

According to the Roy–Borjas model, the most talented workers will choose to migrate to countries exhibiting high income inequalities to achieve the highest earnings. The purpose of this article is to highlight that income inequalities in the country of origin, particularly the nature of inequalities, will affect high-skilled emigration. If the home country rewards productive efforts and sanctions unproductive behaviours (such as rent-seeking), emigration declines. We test this hypothesis by relying on panel data of 30 OECD countries for the period from 1990 to 2010. Two econometric techniques are used: the ordinary least squares and the system-Generalized Method of Moments estimation to tackle the endogeneity issue. The results show that when income inequalities in the home country are conditioned by the institutions’ quality, there is a negative relationship between inequalities and high-skilled emigration, suggesting that productive inequalities are detrimental to emigration. Thus, developed countries facing high-skilled emigration must change the nature of inequalities by reforming their institutions in order to attract and retain the most talented workers. Implementing institutions that reward productive efforts would limit high-skilled emigration.

John Rawls proposed a theory of justice for the basic structure of society. Surprisingly, his suggestions for tax institutions were not well articulated. Rawls’s principles of justice do not prescribe a unique set of tax recommendations, but his remarks on tax matters reflect his vision of society as a cooperative venture in which everyone must work. This paper makes two contributions. First, it offers a chronological, systematic, and contextual analysis of what Rawls wrote on taxation. Rawls’s comments on taxation reveal his lifelong concern for preserving market incentives and his rejection of ability-to-pay as a principle of taxation. Second, the paper argues that some of Rawls’s tax proposals belong to nonideal theory because they depend on a conception of individuals in tension with the conception of moral persons developed in his theory.

Much of economics is dedicated to studying conflicts of interest. What is less well studied is the question of how to make sense of conflicts of interest involving non-individuals like social institutions or social collectives. However, the latter is very important, too: from the occurrence of institutional corruption to the creation of workplaces with much internal conflict, understanding clashes between the interests of individuals and non-individuals is an important social phenomenon. How, though, can this phenomenon be studied? What, exactly, are the ‘interests’ of social institutions or collectives? To make progress with this, this paper uses recent work in social functionalism to develop a theory of cooperation and conflict involving non-individualist social entities. To make the discussion precise, the paper focuses on principal/agent problems (though it is not restricted to the latter). The paper ends by applying this theory to cases of internal conflicts in social collectives.

This paper examines relationships between AI occupational exposure and workforce patterns in U.S. federal agencies from 2019–2024. Using administrative employment data, we document systematic associations between agencies’ concentrations of AI-exposed occupations and employment dynamics. Agencies with higher AI exposure exhibit declining routine employment shares, expanding expert roles, and wage compression effects. We develop a theoretical framework incorporating institutional constraints distinguishing public organisations: employment protections, standardised compensation systems, and political oversight. The model features strategic interactions between budget-maximising directors and electoral-sensitive overseers, predicting workforce evolution under institutional constraints. Our identification exploits fixed occupational exposure scores, so observed changes in agency-level exposure reflect workforce composition shifts rather than measurement artefacts. Patterns suggest agencies with greater AI-susceptible occupations experience reallocation rather than displacement, providing insights for understanding technological change in institutionally constrained environments and informing governance frameworks balancing modernisation with democratic accountability.

The modern business corporation emerged from the medieval and chartered corporations. The medieval tradition of legal pluralism was replaced by two ‘pure’ disciplines – Law and Economics – that left no conceptual space to understand its hybrid nature, decentralizing law-making and centralizing market transactions, or to frame its person-thing duality. Under intellectual monopoly capitalism, this hybrid nature has degenerated: corporations have monopolized knowledge, outsourced production to dependent peripheral firms, and become deeply intertwined with financial markets and geopolitical rivalries – lending substance to notions of techno-feudalism, while marking a profound break with the medieval tradition of open science that first made competitive markets possible.

This paper provides a new theoretical framework and a criterion to model the choice between democratic, hybrid, and epistocratic modes of political governance. From a normative perspective, we claim that the specificity of information should guide the choice between these modes of political governance because of its impact on costs of political governance. Any issue has a degree of information specificity that determines costs of political governance, which are combined in a Social Costs Function. Therefore, the model helps to assess the relative efficiency between democratic, hybrid, and epistocratic decision-making procedures to reach collective choices. The last section proposes extensions of the model by discussing how political, cultural, and epistemic institutions as well as polycentric governance modify the parameters of the model.

Contested commodities such as kidneys, surrogate pregnancies, or sex work raise questions about whether these exchanges improve people’s lives or cause harm. We address this issue by examining how U.S. participants perceive changes in buyers’ and sellers’ welfare resulting from contested‑commodity transactions. Across both contested and non‑contested commodities, respondents predominantly evaluated exchanges through a zero‑sum lens – assuming that one party gains at the other’s expense. Despite normative debates emphasizing the vulnerability of sellers in contested markets, participants frequently viewed sellers as the beneficiaries, though less strongly than in non‑contested exchanges. These findings have implications for the institutional analysis of contested commodity markets. Because the perceived legitimacy of market institutions partly depends on public beliefs, our results help illuminate the moral and policy disputes that shape debates over commodification.

This paper investigates how the historical institutional legacies of the Habsburg and Ottoman Empires affect present-day attitudes toward women and minorities in Romania. We conduct a thorough historical analysis which shows that the institutional setup in the Ottoman part of Romania was more favourable toward women and minorities compared to that in the Habsburg part. Using the 2016 round of the EBRD-World Bank Life in Transition Survey, we find that these differences in historical institutions have long-run impacts on attitudes today. While we find mixed support for our hypotheses when it comes to gender attitudes, consistent with our expectations, men and women in ex-Habsburg locations report that women have less decision-making power in the household and are less tolerant towards people of different races, gay people, and Jews. The paper has important implications for advancing the debate on long-run imperial legacies by highlighting their persistent impact on women and minorities.

This study examines how institutional trust and governance quality shape citizens’ evaluations of water services. Drawing on psychological and institutional theories, we develop a multilevel framework linking individual trust in public authorities to regional governance performance. Using multilevel logistic models and pooled data from the Italian National Institute of Statistics (ISTAT) Multipurpose Household Survey (2014–2019), combined with a regional Institutional Quality Index, we show that trust in local institutions is the strongest predictor of perceived service quality. At the contextual level, higher government effectiveness and control of corruption are associated with more favourable perceptions. These findings suggest that institutional trust operates as a heuristic under limited observability, while governance conditions shape the context in which such evaluations are formed.