In today’s world, we cooperate across legal and cultural systems in order to create value. However, this increases volatility, uncertainty, complexity, and ambiguity as challenges for societies, politics, and business. This has made governance a scarce resource. It thus is inevitable that we understand the means of governance available to us and are able to economize on them. Trends like the increasing role of product labels and a certification industry as well as political movements towards nationalism and conservatism may be seen as reaction to disappointments from excessive cooperation. To avoid failures of cooperation, governance is important – control through e.g. contracts is limited and in governance economics trust is widely advertised without much guidance on its preconditions or limits. This book draws on the rich insight from research on trust and control, and accommodates the key results for governance considerations in an institutional economics framework. It provides a view on the limits of cooperation from the required degree of governance, which can be achieved through extrinsic motivation or building on intrinsic motivation. Trust Control Economics thus inform a more realistic expectation about the net value added from cooperation by providing a balanced view including the cost of governance. It then becomes clear how complex cooperation is about ‘governance accretion’ where limited trustworthiness is substituted by control and these control instances need to be governed in turn. Trust, Control, and the Economics of Governance is a highly necessary development of institutional economics to reflect progress made in trust research and is a relevant addition for practitioners to better understand the role of trust in the governance of contemporary cooperation-structures. It will be of interest to researchers, academics, and students in the fields of economics and business management, institutional economics, and business ethics. Note that this work is the first of its kind that explicitly reflects on the societal realities, how these drive the assumption setting process, and how these assumptions influence the theory outcome.

Why does corporate governance--front page news with the collapse of Enron, WorldCom, and Parmalat--vary so dramatically around the world? This book explains how politics shapes corporate governance--how managers, shareholders, and workers jockey for advantage in setting the rules by which companies are run, and for whom they are run. It combines a clear theoretical model on this political interaction, with statistical evidence from thirty-nine countries of Europe, Asia, Africa, and North and South America and detailed narratives of country cases. This book differs sharply from most treatments by explaining differences in minority shareholder protections and ownership concentration among countries in terms of the interaction of economic preferences and political institutions. It explores in particular the crucial role of pension plans and financial intermediaries in shaping political preferences for different rules of corporate governance. The countries examined sort into two distinct groups: diffuse shareholding by external investors who pick a board that monitors the managers, and concentrated blockholding by insiders who monitor managers directly. Examining the political coalitions that form among or across management, owners, and workers, the authors find that certain coalitions encourage policies that promote diffuse shareholding, while other coalitions yield blockholding-oriented policies. Political institutions influence the probability of one coalition defeating another.

Some analysts have called distrust the biggest governmental crisis of our time. It is unquestionably a huge problem, undermining confidence in our elected institutions, shrinking social capital, slowing innovation, and raising existential questions for democratic government itself. What’s behind the rising distrust in democracies around the world and can we do anything about it? In this lively and thought-provoking essay, Donald F. Kettl, a leading scholar of public policy and management, investigates the deep historical roots of distrust in government, exploring its effects on the social contract between citizens and their elected representatives. Most importantly, the book examines the strategies that present-day governments can follow to earn back our trust, so that the officials we elect can govern more effectively on our behalf.

This volume explores the foundations of trust, and whether social and political trust have common roots. Contributions by noted scholars examine how we measure trust, the cultural and social psychological roots of trust, the foundations of political trust, and how trust concerns the law, the economy, elections, international relations, corruption, and cooperation, among myriad societal factors. The rich assortment of essays on these themes addresses questions such as: How does national identity shape trust, and how does trust form in developing countries and in new democracies? Are minority groups less trusting than the dominant group in a society? Do immigrants adapt to the trust levels of their host countries? Does group interaction build trust? Does the welfare state promote trust and, in turn, does trust lead to greater well-being and to better health outcomes? The Oxford Handbook of Social and Political Trust considers these and other questions of critical importance for current scholarly investigations of trust.

Tackles one of the most enduring and contentious issues of positive political economy: common pool resource management.

This collection of articles uses economic theory to explain the governance of organizations. It covers the governance of families, oligarchies, democracies, for profit firms and non-profit institutions such as religious organizations. The widespread and novel subject matter within a set of focused economic questions results in fascinating reading allowing the reader to see how similar issues can be answered in areas where the person has little knowledge of the subject. This is an engaging and useful tool for students, researchers and academics wanting to expand their area of expertise into new and exciting realms. Contributors include: D. Acemoglu, R. Gibbons, H. Hansmann, P. Leeson, P. Rubin, B. Weingast

In recent years transaction cost economics have come to dominate the discussion of the nature and organization of firms. In Transaction Costs Economics and Beyond Michael Dietrich offers a critical exploration of transaction costs. He argues that whilst they have much to offer, they are still an inadequate basis for a general theory of the firm. Drawing on theories of organizational behaviour as well as economics, he concludes by offering a theory of the firm that allows for both hierarchical and creative decision making.

If we believe that the small, open economies of Nordic Europe are paragons of good governance, why are they so prone to economic crisis? In Good Governance Gone Bad, Darius Ornston provides evidence that adapting flexibly to rapid, technological change and shifting patterns of economic competition may be a great virtue, but it does not prevent countries from making strikingly poor policy choices and suffering devastating results. Home to three of the "big five" financial crises in the twentieth century, Nordic Europe in the new millennium has witnessed a housing bubble in Denmark, the collapse of the Finnish ICT industry, and the Icelandic financial crisis. Ornston argues that the reason for these two seemingly contradictory phenomena is one and the same. The dense, cohesive relationships that enable these countries to respond to crisis with radical reform render them vulnerable to policy overshooting and overinvestment. Good Governance Gone Bad tests this argument by examining the rise and decline of heavy industry in postwar Sweden, the emergence and disruption of the Finnish ICT industry, and Iceland’s impressive but short-lived reign as a financial powerhouse as well as ten similar and contrasting cases across Europe and North America. Ornston demonstrates how small and large states alike can learn from the Nordic experience, providing a valuable corrective to uncritical praise for the "Nordic model."

In today’s world, we cooperate across legal and cultural systems in order to create value. However, this increases volatility, uncertainty, complexity, and ambiguity as challenges for societies, politics, and business. This has made governance a scarce resource. It thus is inevitable that we understand the means of governance available to us and are able to economize on them. Trends like the increasing role of product labels and a certification industry as well as political movements towards nationalism and conservatism may be seen as reaction to disappointments from excessive cooperation. To avoid failures of cooperation, governance is important – control through e.g. contracts is limited and in governance economics trust is widely advertised without much guidance on its preconditions or limits. This book draws on the rich insight from research on trust and control, and accommodates the key results for governance considerations in an institutional economics framework. It provides a view on the limits of cooperation from the required degree of governance, which can be achieved through extrinsic motivation or building on intrinsic motivation. Trust Control Economics thus inform a more realistic expectation about the net value added from cooperation by providing a balanced view including the cost of governance. It then becomes clear how complex cooperation is about ‘governance accretion’ where limited trustworthiness is substituted by control and these control instances need to be governed in turn. Trust, Control, and the Economics of Governance is a highly necessary development of institutional economics to reflect progress made in trust research and is a relevant addition for practitioners to better understand the role of trust in the governance of contemporary cooperation-structures. It will be of interest to researchers, academics, and students in the fields of economics and business management, institutional economics, and business ethics. Note that this work is the first of its kind that explicitly reflects on the societal realities, how these drive the assumption setting process, and how these assumptions influence the theory outcome.