Methodological assumptions of the New Institutional Economics: A reconstruction of the approach
Methodological assumptions of the New Institutional Economics: A reconstruction of the approach

Summary/Abstract: Motivation: The emergence of the New Institutional Economics (NIE) was a response to the methodological limita-tions of neoclassical economic models, which lacked explanations concerning the costs of using the market mechanism,the structure of property rights, or institutional evolution. NIE enriches the neoclassical approach by embedding itsresearch models in social realities and focusing on institutions as fundamental variables of economic processes.Aim: This article aims to reconstruct and discuss the methodological foundations of NIE, with particular emphasison assumptions regarding individual rationality, methodological individualism, and opportunism among transactionpartners.Materials and methods: This paper adopts a theoretical-analytical approach based on a literature review. A compar-ative analysis and an attempt to identify common elements of the institutional research approach were applied.Results: Using the research method, the fundamental methodological assumptions of NIE were reconstructed. Theseassumptions bring neoclassical economics closer to the realities of socio-economic processes.

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