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The Evolutionary Analysis of Economic Policy
This important book analyses evolutionary approaches to economic policy. Its main purpose is to explore the policy implications of evolutionary economics, in particular of approaches inspired on the one hand by Schumpeter and revived by Nelson and Winter which deal with industrial evolution under constant institutions and, on the other hand, of approaches inspired by Hayek and North, which analyse the ways in which institutions themselves evolve.
More Information
Critical Acclaim
Contributors
Contents
More Information
This important book analyses evolutionary approaches to economic policy. Its main purpose is to explore the policy implications of evolutionary economics, in particular of approaches inspired on the one hand by Schumpeter and revived by Nelson and Winter which deal with industrial evolution under constant institutions and, on the other hand, of approaches inspired by Hayek and North, which analyse the ways in which institutions themselves evolve.
Hitherto evolutionary economists have paid little attention to policy issues, and the relatively few policy implications that they have produced are divergent. Whereas the Neo-Schumpeterian approach has often been used to support political interventions, the Hayekian viewpoint holds that economic policy detracts from economic performance. More systematic evolutionary analysis of economic policy is required if these one-sided findings are to be transcended. Furthermore, such analysis can be expected to develop a coherent theory of economic policy which will plug the gaps and rectify the errors (such as approval of socialist planning and Japanese industrial policies) of both neoclassical and alternative approaches to policy.
Evolutionary economists and policy analysts will find this book of great interest, as will economists and students of economics who are interested in enlarging their views with excursions outside the standard curriculum.
Hitherto evolutionary economists have paid little attention to policy issues, and the relatively few policy implications that they have produced are divergent. Whereas the Neo-Schumpeterian approach has often been used to support political interventions, the Hayekian viewpoint holds that economic policy detracts from economic performance. More systematic evolutionary analysis of economic policy is required if these one-sided findings are to be transcended. Furthermore, such analysis can be expected to develop a coherent theory of economic policy which will plug the gaps and rectify the errors (such as approval of socialist planning and Japanese industrial policies) of both neoclassical and alternative approaches to policy.
Evolutionary economists and policy analysts will find this book of great interest, as will economists and students of economics who are interested in enlarging their views with excursions outside the standard curriculum.
Critical Acclaim
‘. . . the book provides a good overview on the link between evolutionary economics and its relevance for economic policy. . . it makes clear the enormous complexity of economic processes and the policy responses to them. Thus, it seems to us to be a very promising starting point to make evolutionary economics more relevant in economic policy-making.’
– Andreas Freytag, Journal of Evolutionary Economics
‘Traditional doctrines of economic policy have largely failed to address the fact that human economies are evolving, complex adaptive systems rather than equilibrating mechanisms. The contributions collected in this volume represent a significant step towards a more adequate, evolutionary approach to economic policy, an approach that is at the same time more modest than its mechanical counterpart, but also more true to the nature of its subject.’
– Viktor J. Vanberg, Universität Freiburg, Germany
‘Until recently evolutionary economics has studied the evolution of organizations and economic systems but paid scant attention to problems of policy. This book may herald the beginning of a new era for this new and vibrant field by presenting a series of thoughtful, intelligent and fair essays that examine limits and opportunities in institutional policy. The authors make big strides developing a systematic evolutionary analysis of economic policies. I am particularly impressed by their attempts to analyze how the evolution of markets and governments often produces unintended effects for policy.’
– Thrainn Eggertsson, University of Iceland
‘Evolutionary economics has long had difficulties with economic policies, as the welfare implications of the various forms of evolutionary theory are by no means clear. This volume analyses arguments for policy to intervene in economies of different institutional makeup. The outcome is no simple set of prescriptions, but the basis for further development of policy thinking. It begins an important task in the research programme of evolutionary economics, especially that from an Austrian perspective, of demonstrating the policy relevance of these theories.’
– John Nightingale, University of New England, Australia
‘This study is a pioneering effort to attempt to integrate evolutionary and economic theory in order to have a better understanding of the way in which political, economic and social systems evolve over time. The result is an exciting series of essays exploring the various dimensions of evolutionary analysis of economic policy.’
– Douglass C. North, Washington University, US and Nobel Laureate
‘A brilliant but complex set of analyses tying and contrasting the Schumpeterian structured evolution of markets with Hayekian views of self-revealing market institutional development, this book is no quick-read; rather it is a sophisticated (if difficult) statement of the state-of-the-art of evolutionary economics. Its place in the evolution of important literature is similar to Joan Robinson’s 1956 Accumulation of Capital writ modern with a critique of Nelson and Winter’s An Evolutionary Theory of Economic Change as its starting point.’
– Mark Perlman, University of Pittsburgh, US
– Andreas Freytag, Journal of Evolutionary Economics
‘Traditional doctrines of economic policy have largely failed to address the fact that human economies are evolving, complex adaptive systems rather than equilibrating mechanisms. The contributions collected in this volume represent a significant step towards a more adequate, evolutionary approach to economic policy, an approach that is at the same time more modest than its mechanical counterpart, but also more true to the nature of its subject.’
– Viktor J. Vanberg, Universität Freiburg, Germany
‘Until recently evolutionary economics has studied the evolution of organizations and economic systems but paid scant attention to problems of policy. This book may herald the beginning of a new era for this new and vibrant field by presenting a series of thoughtful, intelligent and fair essays that examine limits and opportunities in institutional policy. The authors make big strides developing a systematic evolutionary analysis of economic policies. I am particularly impressed by their attempts to analyze how the evolution of markets and governments often produces unintended effects for policy.’
– Thrainn Eggertsson, University of Iceland
‘Evolutionary economics has long had difficulties with economic policies, as the welfare implications of the various forms of evolutionary theory are by no means clear. This volume analyses arguments for policy to intervene in economies of different institutional makeup. The outcome is no simple set of prescriptions, but the basis for further development of policy thinking. It begins an important task in the research programme of evolutionary economics, especially that from an Austrian perspective, of demonstrating the policy relevance of these theories.’
– John Nightingale, University of New England, Australia
‘This study is a pioneering effort to attempt to integrate evolutionary and economic theory in order to have a better understanding of the way in which political, economic and social systems evolve over time. The result is an exciting series of essays exploring the various dimensions of evolutionary analysis of economic policy.’
– Douglass C. North, Washington University, US and Nobel Laureate
‘A brilliant but complex set of analyses tying and contrasting the Schumpeterian structured evolution of markets with Hayekian views of self-revealing market institutional development, this book is no quick-read; rather it is a sophisticated (if difficult) statement of the state-of-the-art of evolutionary economics. Its place in the evolution of important literature is similar to Joan Robinson’s 1956 Accumulation of Capital writ modern with a critique of Nelson and Winter’s An Evolutionary Theory of Economic Change as its starting point.’
– Mark Perlman, University of Pittsburgh, US
Contributors
Contributors: K. Heine, W. Kerber, J.S. Metcalfe, S. Okruch, P. Pelikan, H. Peukert, H. Siegenthaler, T. Slembeck, G. Wegner, M. Wohlgemuth
Contents
Contents: Preface 1. Introduction: Evolutionary Thinking on Economic Policy 2. Why Economic Policies Need Comprehensive Evolutionary Analysis 3. Evolutionary Markets and the Design of Institutional Policy 4. Knowledge and Economic Policy: A Plea for Political Experimentalism 5. Democracy as an Evolutionary Method 6. Ideologies, Beliefs, and Economic Advice – A Cognitive–Evolutionary View on Economic Policy Making 7. Equilibrium and Evolutionary Foundations of Competition and Technology Policy: New Perspectives on the Division of Labour and the Innovation Process 8. Institutional Evolution, Regulatory Competition and Path Dependence 9. The German Neuer Markt as an Adaptive Institution 10. Understanding and the Mobilisation of Error: Eliminating Controls in Evolutionary Learning Index
