what is organizational economics?

The most recent issue of the Journal of Institutional Economics has an excellent exchange of ideas on organizational economics.  The issue begins with an essay by Richard Posner: “From the new institutional economics to organization economics: with applications to corporate governance, goverment agencies, and legal institutions.”

The essay indirectly and directly touches on all kind of questions:  What are comparative similarities in governance between private versus public organizations?  What role do incentives and compensation play?  What is organizational economics?  Are executives overpaid?  Many of these issues are discussed in the context of looking at two government organizations — the intelligence community broadly, and the FBI.  Interesting stuff.

Even cooler than the essay itself: more than a dozen scholars were asked to write essays in response to the above, and they also raise a host of new issues: Who are actors and entities, what are markets?   What is the role of intrinsic versus extrinsic motivation?  Do theories readily apply across various contexts — e.g., across different types of organizations?  Where is mainstream economics versus more heterodox approaches?  Etc.  The responders include Elinor Ostrom, Bruno Frey, John Roberts, etc.  And, Posner then in turn responds to these comments.

Highly recommended.

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