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A framework for the study of firms as constitutional orders

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  • Anthony Evans
  • Nikolai Wenzel

Abstract

Much of the literature on corporate performance focuses on institutional restructuring, and implicitly assumes that constitutional factors are determined exogenously. Existing theories of the firm—whether a “goal paradigm” or an “exchange paradigm”—provide useful insights; but we find them incomplete because they miss the extent to which companies build unique and meaningful constitutional orders. Building on Vanberg (Const Polit Econ 3(2):223–253, 1992 ), we investigate the extent to which the field of constitutional political economy (CPE) can improve our understanding of organisations, by providing a typology of CPE that can be applied to a study of firms. We make a distinction among (1) operational; (2) institutional; and (3) constitutional levels of management, and based on the CPE literature argue that “constitutional” considerations help us to define the boundaries of a firm and its operational environment. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Anthony Evans & Nikolai Wenzel, 2013. "A framework for the study of firms as constitutional orders," Constitutional Political Economy, Springer, vol. 24(1), pages 2-18, March.
    • Handle: RePEc:kap:copoec:v:24:y:2013:i:1:p:2-18
    DOI: 10.1007/s10602-012-9129-0
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    References listed on IDEAS

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    1. Nikolai Wenzel, 2010. "From contract to mental model: Constitutional culture as a fact of the social sciences," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(1), pages 55-78, March.
    2. Gifford, Adam, Jr, 1991. "A Constitutional Interpretation of the Firm," Public Choice, Springer, vol. 68(1-3), pages 91-106, January.
    3. Jensen, Michael C & Meckling, William H, 1979. "Rights and Production Functions: An Application to Labor-managed Firms and Codetermination," The Journal of Business, University of Chicago Press, vol. 52(4), pages 469-506, October.
    4. Voigt, Stefan, 1997. "Positive Constitutional Economics: A Survey," Public Choice, Springer, vol. 90(1-4), pages 11-53, March.
    5. Jankovic Ivan, 2010. "Firm as a Nexus of Markets," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 16(1), pages 1-29, October.
    6. Peter J. Boettke (ed.), 2010. "Handbook on Contemporary Austrian Economics," Books, Edward Elgar Publishing, number 12822.
    7. Gordon, Scott, 1976. "The New Contractarians," Journal of Political Economy, University of Chicago Press, vol. 84(3), pages 573-590, June.
    8. Viktor Vanberg, 1992. "Organizations as constitutional systems," Constitutional Political Economy, Springer, vol. 3(2), pages 223-253, March.
    9. James Buchanan, 1990. "The domain of constitutional economics," Constitutional Political Economy, Springer, vol. 1(1), pages 1-18, December.
    10. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    11. Toboso, Fernando, 2001. "Institutional Individualism and Institutional Change: The Search for a Middle Way Mode of Explanation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 25(6), pages 765-783, November.
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    Cited by:

    1. Anthony J. Evans, 2013. "Balancing corporate culture: Grid-group and Austrian economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(3), pages 297-309, September.

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    More about this item

    Keywords

    Constitutional management; Theory of the firm; Institutions; B53; D23; L22; P51;
    All these keywords.

    JEL classification:

    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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