Economic and corporate governance

Abstract

“Governance” has emerged in the social sciences and public policies only in the last two decades, although, according to Webster’s Collegiate Dictionary, the word is rooted in Middle English. There, however, it was identified with government, i.e. with state authorities. Nevertheless, it was hardly used until recently. With its re-invention, governance is no longer confined to public government but it now reflects renewed interest in diversity and comparative structures, processes and performance of allocation mechanisms, (economic) systems, or organisational forms through which economic agents interact and get coordinated. The shift is indicative of the fact that the ideal, competitive “market”, largely viewed as the optimal system and measuring-rod by mainstream economics and economic policies, is far from being the problem-solving device in a complex world and, therefore, has to be complemented, (re-) embedded or substituted by competing forms of coordination. Hierarchy (bureaucracy, private and public), network forms of cooperation and their hybrid forms are at stake. “Governance” now pertains to diverse forms of coordination of agents beyond the ideal “market”