Definition
Even if several definitions have been proposed in the literature (Crouch et al. 2005), they share the idea that institutional complementarity refers to situations of interdependence among institutions. Institutional complementarity is frequently used to explain the degree of institutional diversity that can be observed across and within socioeconomic system, and its consequences on economic performance. In particular, the concept of institutional complementarity has been used to illustrate why institutions are resistant to change and why introducing new institutions into a system often leads to unintended, sometimes suboptimal, consequences.
Institutional Complementarity
The canonical formal representation of the concept of Institutional Complementarity is due to Aoki (2001) and relies on the theory of supermodular games developed by Milgrom and Roberts (1990). The basic structure of the model takes the following form.
Let us consider a setting with two institutional...
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Landini, F., Pagano, U. (2023). Institutional Complementarity. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7883-6_196-2
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DOI: https://doi.org/10.1007/978-1-4614-7883-6_196-2
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Latest
Institutional Complementarity- Published:
- 04 June 2023
DOI: https://doi.org/10.1007/978-1-4614-7883-6_196-2
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Institutional Complementarity- Published:
- 20 May 2016
DOI: https://doi.org/10.1007/978-1-4614-7883-6_196-1