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GINE

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Cerrado

General Institutional Equilibrium theory and policy implications

Existing institutional theory, including political economics and contract theory, convincingly show that institutional details have large impacts on economic and policy outcomes. Once this is recognized, it follows that contracts... ver más

30/06/2016

Innovasjon Norge

760K€

Presupuesto del proyecto: 760K€

Líder del proyecto

Innovasjon Norge No se ha especificado una descripción o un objeto social para esta compañía.

Fecha límite participación Sin fecha límite de participación.

Financiación concedida El organismo FP7 notifico la concesión del proyecto el día 2016-06-30 No tenemos la información de la convocatoria

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Este proyecto no cuenta con búsquedas de partenariado abiertas en este momento.

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1 Participantes

Innovasjon Norge

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Líder del proyecto

Innovasjon Norge No se ha especificado una descripción o un objeto social para esta compañía.

Presupuesto del proyecto 760K€

Fecha límite de participación Sin fecha límite de participación.

Descripción del proyecto Existing institutional theory, including political economics and contract theory, convincingly show that institutional details have large impacts on economic and policy outcomes. Once this is recognized, it follows that contracts should depend on the organisational design of the institution to which the contract is offered. Stage 1 of Project Gine aims at characterising optimal contracts as a function of this design. Stage 2 develops a framework for endogenising and characterising the optimal institutional design. At Stage 3, sets of institutions are endogenised at the same time, where the design of one is an optimal response to the designs of the others. This outcome is referred to as a general institutional equilibrium. Such a theory or methodological framework has several immensely important applications. Development aid contracts should carefully account for the political structure in the recipient country; otherwise the effect of aid may surprise and be counterproductive. The major application motivating this study, however, is environmental policy. Not only must the optimal environmental policy be conditioned on political economy forces; it must also be a function of institutional details, such as the political system. This can explain why the choice of instrument differs across political systems, and why politicians often prefer standards rather than economic instruments. Furthermore, we still do not have a good knowledge of how to design effective and implementable international environmental treaties. The optimal treaty design as well as the best choice of policy instrument must take into account that certain institutions (e.g., interest groups, firm structures, and perhaps even local governance) respond endogenously to these policies.

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