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New institutional economics (NIE) is an economic perspective that attempts to extend economics by focusing on the social and legal norms and rules that underly economic activity. Although NIE has its roots in Ronald Coase's fundamental insights about the critical role of institutional frameworks and transaction costs for economic performance, at present NIE analyses are built on a more complex set of methodological principles and criteria. They now depart from both mainstream Neoclassical economics and "old" institutional economics, though authors often care about both efficiency and distribution issues. The term 'New Institutional Economics' was coined by Oliver Williamson in 1975. Among the many concepts/aspects that are often taken into account in current NIE analyses these can be mentioned organizational arrangements, transaction costs, credible commitments, modes of governance, persuasive abilities, social norms, ideological values, decisive perceptions, gained control, enforcement mechanism, asset specificity, human assets, social capital, asymmetric information, strategic behavior, bounded rationality, opportunism, adverse selection, moral hazard, contractual safeguards, surrounding uncertainty, monitoring costs, incentives to collude, hierarchical structures, bargaining strength, etc. Major scholars associated with this school include Ronald Coase, Douglass North, Oliver Williamson, Avner Greif, and Claude Menard. In 1997 they founded the International Society for New Institutional Economics.
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