Dopfer and Potts (2008) have proposed a new analytic foundation to evolutionary economics based on the unified rule approach. While they contend that their approach is ontologically and analytically coherent and useful, scholars sympathetic with it, e.g., Ostrom and Basurto (2011), have called for further methodological and empirical specification. In the same vein, this paper seeks to develop the Dopfer-Potts framework by proposing an analytic methodology to translate their rule-based approach into an operational method for identifying and testing hypotheses that relate to rules. It does so by defining a methodology connecting explanandum (response rule) and explanantia (factor rules) at the same level of rules. The concept of a ‘savings rule’ serves as a roving example that later is extended into a case study. The paper offers a methodological template for applied evolutionary analysis in economics.
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For reasons of simplicity, we refer to ‚generic rules’ as ‚rules’ throughout this contribution.
Ostrom and Basurto refer to these systems as ‚configurations’ (2010:318).
For the distinction between the analytical levels of rules and of operations, compare Table 1 in Dopfer K and Potts J (2009) On the Theory of Economic Evolution. Evolutionary and Institutional Economic Review 6(1):23–44.
It is insightful to compare the rule world of Ostrom with that of the RBA. There is a close correspondence with regard to 1st order social and behavioral rules and to 0th order rules. Ostrom’s “boundary rules” and “payoff rules” closely correspond to 0th order constitutional rules, and her “choice rules” and “position rules” fit well the bracket of 1st order rules in the RBA. The 2nd order rules receive little attention in the Ostrom approach, though her first “information rule” may be conceived as a 2nd order rule (a rule pertaining to other rules).
The RBA explicitly includes the possibility of a perfect congruency between the rule level and the operant level as a special case. Yet, as becomes obvious from our example, many empirical phenomena will not come with such congruency.
From our view, the pertinent literature would suggest considering real interest and a precautionary motive implicit in the providence rule, as well as tax law (e.g., Cagetti 2001). However, it might be difficult to identify a hedonist lifestyle (b), as opposed to the intention to bequeath one’s heirs (Hayashi and Ando 1988) exclusively on the basis of a review of extant literature.
For a detailed discussion of the RBA rule taxonomy (orders and classes of rules), refer to Dopfer and Potts (2008:8,9).
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We gratefully acknowledge most helpful comments and suggestions by Jason Potts, Kurt Dopfer, Manuel Wäckerle, Thomas Grebel, Raji Steineck, and two anonymous referees.
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Blind, G., Pyka, A. The rule approach in evolutionary economics: A methodological template for empirical research. J Evol Econ 24, 1085–1105 (2014). https://doi.org/10.1007/s00191-014-0382-4
- Rule-based approach
- Economic change
- Evolutionary economics
- Empirical methodology