Keywords: Institutionalism, Transaction costs economics, Institutions and development, Law and economics, Karl Polanyi.
This essay is aimed at illustrating the enduring value of Karl Polanyi’s institutional
approach for contemporary debates on the relationship between economics and
law, as well as other social sciences. After having summarized the main tenets of
Polanyi’s thought, it contrasts his ideas on the economy as an ‘instituted process’
(and related assumptions) with the different framework offered by Douglass North’s
economic neo-institutionalism. It argues that the latter suffers from the ‘economistic
fallacy’ criticized by Polanyi, negatively affecting the current dominant discourse on
institutions and economic development, famously exemplified by the World Banks’
Doing Business reports and the legal origins thesis. Polanyi’s radical critique of systems
of thought based on the generalization of market economy’s conditions is proposed
as a powerful counter-model, capable of neutralizing the risks of colonization of the
law and related institutions by economic imperialism.