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Additional resources for Advances in Political Economy: Institutions, Modelling and Empirical Analysis
Transaction Cost Politics in the Map of the New Institutionalism 15 Fig. 1 Transaction Cost Politics (B) NIE points out that the economic world is characterized by positive transaction costs and institutions. It rejects instrumental rationality by assuming the implications of bounded rationality and considers that the passage of time matters. TCP assumes these three NIE foundations when studying political transactions and institutions. “A transaction cost theory of politics is built on the assumptions of costly information, of subjective models on the part of the actors to explain their environment, and of imperfect enforcement of agreements” (North 1990b, p.
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