Institutional Competition: A New Theoretical Concept for Economic History

Abstract

The paper presents institutional competition between political authorities as a moving force behind institutional and economic change. It introduces the theoretical concept, stressing the interplay between political and economic actors and the transaction costs that the exit and voice options involve. Subsequentiy the concept is applied to German premodern economic history. The paper shows how it may help to explain the transformation from an economic order based on a corporate society to a modern market economy. In a final chapter, some possible further areas of research that might prove to be fruitful are outlined.