The book develops the theory of institutional changes and presents a new direction of economic analysis: the institutional macroeconomics. The author develops the concept of economic dysfunction and applies it to the description of economic growth problems, offers a model of competition between agents within the "innovator-conservative" system, corrects the
doctrine of "creative destruction", offers a model of institutional change based on the effect of the chessboard, with the resulting conclusions from the change in criteria for public well-being that are not fair in terms of institutional change. In addition, the monograph develops a system of axioms for the theory of economic systems efficiency, and proposes a system to assess the economic efficiency of system dysfunction, using the methods of the theory of reliability. The author analyzes the problems of the evolution of technical and financial systems and economies, showing a gap
at the level of the fundamental principles of their joint development.
This book is an attempt to bring out the guidelines of economic changes
theory, having highlighted the basic problems and prospects of the theory
development. The problem is both difficult, and ambitious, and it does not
promise prompt solutions in every aspect. However, for its solution I have
selected the following scheme of actions: studying the fundamental reasons
of institutional inefficiency, the problems of economic growth and
institutions quality, the description of machinery and technologies
development mechanism, the research of institutional changes and
institutional movement trajectories, provision of a new approach to
efficiency estimation of economy functioning at organization's various
levels, including the problems of contracting and legal efficiency, and on
this basis explanation of transmission mechanism of economic policy.
There are four basic reasons of economic changes: 1) quantitative and
qualitative change of the population; 2) change of accumulated knowledge and
technological experience; 3) change of basic and subsidiary institutions
("rules infrastructure"); 4) change of the reaction models (agents'
intentionality) and the models of influence on the economic system
(political decisions and management). Many economists are of the same
opinion. In particular, Douglass Cecil North enumerates the similar reasons
in his book "Understanding the Process of Economic Changes". One of my
tasks was to make North's vague conclusions and loose definitions more or
less theoretical, having suggested or improved the method for studying
economic changes within the frameworks of institutional and evolutionary
I would like to mention "International Scientific Researches" journal and
its editor-in-chief S.V.Gorin for publication of my articles in English
which are the basis of this book, and for the permission to use this
material in the book; economic journal of Montenegro where 3 articles, the
ideas of which have been reflected here, were published. I would like to
express my special gratitude to Alla Vladimirovna Nikitina, the Director of
Russian Publishing House "Kurs" ("Course") "Infra-M", the longstanding
editor of my works Nataliya Fedorovna Karpycheva, and my constant translator
Galina Gennadjevna Lepeshkina. This book would have never been published in
English without their participation and selfless labor. I am fully
responsible for the scientific part of the book and G.G.Lepeshkina bears
responsibility for its translation.
Dr, Professor, Senior Fellow at the Center of Evolutionary Theory and Economic Development
Institute of Economics Russian Academy of Science, University Professor of Finance of the Russian
Government, the author of more than 20 books and more than 300 paper on institutional economics,
macroeconomics policy, innovation theory of the firm and industry, the theory of economic growth
and institutional change. The author of the concept of dysfunction of institutions and economic
systems, has developed a method for measuring dysfunctional states and evaluate the effectiveness
of the system of economic organization, has proposed a model neoshumpeterian competition such as
"innovator-conservative" with the correction of the findings for economic policy.
Professor, Head of Sector of Institutional Analysis of Economic Dynamics at the Center of Evolutionary Theory and Economic Development of the Institute of Economics of the Russian Academy of Science. Author of more than 20 books and more than 300 papers on institutional economics, macroeconomics policy, innovation theory of companies and industry, theory of economic growth and institutional change. Oleg S. Sukharev is the author of the concept of dysfunction of institutions and economic systems, has developed a method for measuring dysfunctional states and evaluating the effectiveness of the system of economic organization, and proposed a model of neo-Shumpeterian competition “innovator–conservative” with correction of the findings for economic policy.