Economics of Convention and its Perspective on Knowledge and Institutions

Abstract

The chapter introduces a French approach, economics of convention, which is an institutional way of integrating pragmatist and structuralist concepts for the analysis of economic production, distribution, and consumption. The author presents its two core models: the system of quality conventions and the worlds of production. Both systematize logics of coordination and valuation. Other concepts such as form investment and global value chains are discussed. Economics of convention criticizes the externalist perspective on institutions as transaction-cost theory does. From the standpoint of economics of convention, the meaning of institutions is incomplete, and competent actors mobilize conventions to handle institutions in situations. The approach’s situationalist perspective brings in an internalist concept of institutions. Economics of convention can thereby combine the analysis of institutions with the analysis of empirical normativity that conventions represent. Conventions can be regarded as the deeper structures of economic knowledge. Finally, the article presents ongoing trends and perspectives of economics of convention.