What are institutions, and how should they be designed to achieve compliance with behavioral rules, including laws, social norms, religious rules, or cultural traditions? In a new conceptual paper, “Economic Governance and Institutional Design” (TILEC Discussion Paper 24-10), I introduce a typology of economic governance institutions and explain how it can be used both by policy makers, administrators, and researchers in law and economics to improve rule compliance. The paper explains how effective and efficient institutions can be identified for a given economic governance problem. The concepts are applied to two cases: how to create trust in cloud computing technologies, and how to implement data sharing of user-generated information on data-driven markets?

Explaining the economic governance methodology bottom-up and comprehensively and making it properly citeable is a novelty and the key contribution of this paper. The nice part is that it evolved both out of earlier research and out of 12 years of teaching. Therefore, I intellectually owe both several co-authors, especially Scott Masten, and many graduate students who gave feedback.

A 2-page policy brief is here.