Formal institutions, informal institutions, and red tape: A comparative study

Formal and Informal Market Institutions : Embeddedness Revisited

Market exchange involves many cognitive and non-cognitive processes — e.g., search, inference, prediction, negotiation. Much attention has been devoted to these issues both in theory and in experimental economics. I focus on the enforcement of market transactions against opportunistic behavior. I first discuss the different mechanisms that can deter opportunistic breach of contract. Some of the...

How External Institutions Penetrate Schools Through Formal and Informal Leaders

Purposes: This study investigates the role of formal and informal leaders in the diffusion of external reforms into schools and to teachers’ practices. Formal leaders are designated by their roles in the formal organization of the school (e.g., principals, department chairs, and instructional coaches) and informal leaders refer to those who do not have any formal leadership roles but are nomina...

Informal Institutions and Property Rights

In recent years, the call for strong and clear property rights has grown in law and development circles. In the landmark book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, de Soto put forth the claim that “strong and clear” property rights, formalized rather than informal, are necessary for economic efficiency and for the protection of the poor, who occu...

Matching in Informal Financial Institutions.

This paper analyzes an informal financial institution that brings heterogeneous agents together in groups. We analyze decentralized matching into these groups, and the equilibrium composition of participants that consequently arises. We find that participants sort remarkably well across the competing groups, and that they re-sort immediately following an unexpected exogenous regulatory change. ...

Informal Institutions a “Weaknesses” of Hu Behavior