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A New Institutional Economic Perspective on Alternative Governance Mechanisms at the Local Government Level

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  • Joe Wallis
  • Syed Rizvi

Abstract

The ‘new institutional economics’ (NIE) can go a long way towards comprehending the emerging complexities of local government. As local bodies seek to forge collaborative partnerships with other organisations, they have to decide whether to solve horizontal co-ordination problems through market, hierarchy or network mechanisms. NIE can show that where other governance mechanisms are incomplete or subject to high transaction costs, trust and co-operation can informally develop through the process by which network interactions become embedded within each other. We show how this approach can be revised to take into account the expressive dimension of behaviour in hope-based networks whose members are bound together not so much by structures of resource dependence as by the hope and trust they place in the advancement of common goals. JEL: L38

Suggested Citation

  • Joe Wallis & Syed Rizvi, 2023. "A New Institutional Economic Perspective on Alternative Governance Mechanisms at the Local Government Level," Journal of Interdisciplinary Economics, , vol. 35(1), pages 108-127, January.
    • Handle: RePEc:sae:jinter:v:35:y:2023:i:1:p:108-127
    DOI: 10.1177/02601079211036841
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    References listed on IDEAS

    as
    1. Randall Collins, 1993. "Emotional Energy as the Common Denominator of Rational Action," Rationality and Society, , vol. 5(2), pages 203-230, April.
    2. Joe Wallis & Brian Dollery, 1999. "Market Failure, Government Failure, Leadership and Public Policy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-37296-2, December.
    3. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
    4. Kuran, Timur, 1990. "Private and Public Preferences," Economics and Philosophy, Cambridge University Press, vol. 6(1), pages 1-26, April.
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    More about this item

    Keywords

    NIE; networks; local government; transaction costs; hope and trust;
    All these keywords.

    JEL classification:

    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy

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