The influence of political power on models of industrial organization: institutional approach

Abstract

The choice of industrial organization mechanisms always takes place in the context of approaches to economic regulation set by the political elite. In times of large-scale political upheavals which are taking place in 2022, economists are more and more concerned with this context, but operational tools that would allow it to take into account when analyzing the mechanisms of governance have not yet been found. This article is developing such tools from the perspective of the New Institutional Economics: combination of the “social orders” concept developed by D. North, J. Wallis, B. Weingast and the “mechanisms of governance” by O. Williamson. It is concluded that taking into account only the transaction costs minimizing principle while choosing the mechanism of governance excludes an important factor: the opportunism of politicians, which are often directly involved in the establishment of governance mechanisms.