The use of knowledge in comparative economics

For most of the twentieth century, comparative economics asked one question: capitalism or socialism? The particulars of the question took many forms, both: positive and normative, from stark contrasts to shaded nuances (e.g., 'the mixed economy'), but the central theme was always planning versus markets. By contrast, the 'new comparative economics' (e.g., Djankov, et al. 2003) draws on diverse sub-disciplines such as law and economics, public choice, and new institutional economics. What makes these comparative exercises 'economics' is their method, not their question. Contemporary comparative economics, though focused broadly on issues of economic development, is not merely concerned with the proximate causes of the generation of wealth or the production and distribution of goods and services. Rather, it uses rational choice as a constant across institutional contexts to illuminate how different institutions engender different outcomes. Consequently, the capitalism-socialism debate no longer constrains the comparative discussion. Any sort of comparison is fair game: democracy versus dictatorship, common law versus civil law, and even cross-institutional comparisons such as democracy versus markets. The move to cross-institutional–rational-choice analysis is a large step forward in comparative economics. An insistence on behavioral symmetry—that, absent specified selection mechanisms, the same sorts of agents populate different institutional settings—creates a common grammar in which genuine, non-orthogonal comparisons can be made (as against, for example, comparing neoclassical perfect competition with a Leontieff input-output table). And in contrast with the institutionally antiseptic models of mid-century economics, models by which the profession judged the market socialists as the winners of the economic calculation debate, purely technocratic matters no longer dominate. The importance of property rights, governance, and even