This seminar will be led by Professor jean-Michel Glachant. he is an economist specialisingin energu regulation who has also written widely on new institutional economics. he has provided two items of reading and a set of questions for reflection. Please prepare some answers to the questions – but there is no need to send in your answers before the seminar.
two chapters of Eric Brousseau & Jean-Michel Glachant “Institutional Economics. A Guidebook » (CUP, 2008)
First/ The introduction by Paul JOSKOW (former Dean Department of economics at MIT) pp1_22 (link); It is an introduction to institutional economics as Paul himself discovered it from 1975 onwards when doing research & teaching at MIT. Paul has been later on a President elect of the academic international association for Institutional Economics (ISNIE). Paul gives a vision of the theoretical frame and of its positioning vis-a-vis the old “classical economics” and a bit vis-a-vis the new classical economics sometimes known as “new microeconomics”.
Second/ Chapter 16 by Michel Glachant and Yannick Perez pp328_362 (link). It is an application of New Institutional Economics to an empirical policy question: the liberalization of the power sector.
Paul Joskow is known to have open this policy box as soon as 1988 with his very challenging book “Markets for Power. An Economic Analysis of Electrical Utilities Deregulation” (MIT Press 1988). However the policy has been much more difficult to conduct that this early book was suggesting. Hence my own paper… 20 years later.
1/ Paul Joskow favors in his introduction an approach of new institutional economics centered on the four levels distinguished by Oliver Williamson in the Journal of Economic Literature.
1-1 Do these four levels speak to your mind?
1-2 Do they make you fully understand what institutional economics is about?
1-3 Are these levels more convincing for economists of for lawyers?
1-4 Do you really think that anyone will someday elucidate how each level works and how all levels interact?
1-5 Hence: and so what?
2/ Glachant & Perez approach the empirical policy question by claiming that they do institutional economics.
2-1 Where do they lodge in the scale of four levels given by Williamson – Joskow?
2-2 Do Glachant-Perez really do institutional economics at all?
2-3 What do they finally conclude regarding the feasibility of a successful liberalization of the electricity sector?
2-4 Do they recommend any particular policy to succeed it (let say: in the European Union)?
2-5 Hence: and so what?