I missed a critique (Journal of Economic Literature, 2007) by economic historian Gregory Clark of the 2006 book by Avner Greif on "Institutions and the Path to the Modern Economy." Now I managed to read it and it is an excellent article. This critique is one of the recently appeared pieces that criticize the alleged over-ambitious project of the New Institutional Economics, which tries to present market preserving institutions as the main driver of economic development, following the work of Ronald Coase and Douglas North. Other authors that have pieces (or sometimes paragraphs) containing criticisms of NIE are Samuel Bowles, Pranab Bardhan and Ha-Joon Chang.
These criticisms sometimes focus on aspects of the economics of institutions that some authors would not acknowledge as central to the whole enterprise, like the necessary survival of efficent institutions, or the recommendation of a limited role of government.
In my view, perhaps there are inherent problems in trying to institutionalize institutional economics. One of the lessons of this school, precisely, is that institutions do not travel well, and that attempts to sustain collective action are time and space-dependent.
Still, the best contribution of the economic analysis of institutions in the recent past is to emphasize the role of rules and organizations (of different nature) and transaction costs in modern economies, as practiced for example by Avinash Dixit. Elinor Olmstrom and Oliver Williamson were given the Nobel Prize for this reason.
Paul Krugman: Zombies of Voodoo Economics
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