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TERRA ECONOMICUS

Once again on the institutional economics’ teaching

TERRA ECONOMICUS, , Vol. 13 (no. 2),
p. 38-45

The paper is devoted to the critical analysis of two topics that are often noticed in the teaching and learning aids on institutional economics: qualification of institutions as public goods, and principle of methodological individualism content. It is shown that some part of teaching and learning aids includes irrelevant representations of these topics. Accordingly the correct treatments of the named topics are suggested. Institutions are not public goods because both attributes of the last one are violated: institutions are excludable since the access to the actions that institution presumes can be easy restricted (for example, persons that are not citizens of a country cannot participate in elections); institutions are rivalrous since the limited capacity of the enforcer. So strictly speaking institutions are congested club goods. Methodological individualism is frequently confused with selfishness and «atomization», i.e. agents’ independency from social environment. Direct citation of M. Weber, L. von Mises, J. Buchanan et al. clearly shows that it is not the case. Methodological individualism is the principle that asserts that only actor in economy is individual; only individual can have goals and interests, and be subject of action.


Keywords: institutional economics; institutions; public goods; methodological individualism

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