Capitalism has outperformed all other systems and maintained a positive growth rate since it began. Svetozar Pejovich makes the case within this book that a major reason for the success of capitalism lies in the efficiency-friendly incentives of its basic institutions, which continuously adjust the rules of the game to the requirements of economic progress. The analysis throughout is consistent and is supported by evidence. Key components of the proposed theory are the rule of law, the market for institutions, the interaction thesis, the carriers of change, and the process of changing formal and informal institutions.
This book will be of great interest to academics and students of law and economics, new institutional economics, comparative systems and public choice throughout the world and especially in East Asia and South America where institutional issues are being debated.
Svetozar Pejovich, Professor Emeritus, Texas A&M University, US, Honorary Doctorate, University of Belgrade, Serbia and Professor of Law and Economics, University of Donja Gorica, Montenegro; with contributions from Enrico Colombatto, Professor of Economics, School of Economics, University of Turin, Italy
Contents: Foreword by Leonard P. Liggio Preface and Acknowledgments PART I: BASIC ECONOMIC CONCEPTS 1. The Game and the Rules of the Game 2. Transaction Costs PART II: TRANSFORMATION OF THE MEDIEVAL COMMUNITY INTO MODERN SOCIETY: THE RISE OF CLASSICAL LIBERALISM, THE RULE OF LAW AND CAPITALISM 3. From the Middle Ages to Capitalism 4. Capitalism and the Rule of Law Appendix: Afraid to be Free: Dependency as Desideraturm James M. Buchanan 5. The Law of Contract and the Judiciary 6. The Economic Functions of the Constitution 7. Private Property Rights 8. Capitalism, Economic Freedom and Performance 9. The Rule of Law and Capitalism: An Overview PART III: TOWARD A THEORY OF INSTITUTIONAL CHANGE 10. The Method of Analysis 11. The Interaction Thesis 12. The Carriers of Change: The Role of Entrepreneurs 13. Formal Institutions 14. Informal Institutions or Cultural Traditions: The Role of Pathfinders 15. Efficiency-Friendly Institutional Change within the Structure of Tradition Index