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By Burns, Robert M. & Rayment-Pickard, Hugh

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Americal Political Science Review 82: 593-596. Wildavsky, A. (1994) Why Self-Interest means less outside of a social context. Cultural contributions to a theory of Rational Choice. Journal ofTheoretical Politics 6: 131-159. Williamsom, O. E. (1985) The Economic InstitutionsofCapitalism: Firms, Markets, Relational Contracting. New York: Free Press. Windhoff-Heritier, A. (1991) Institutions, Interest and Political Choice. In: R. M. Czada and A. Windhoff-Heritier (eds) Political Choice: Institutions, Rules and the Limits of Rationality.

Rockman (eds) (1993) Do Institutions Matter? Government Capabilities and Abroad. Washington: The Brooking Institution. Weber, M. (1978) Wirtschaft und Gesellschaft: Grundriss der Verstehenden Soziologie. Tübingen: Mohr-Siebeck (Fifth Edition). Wildavsky, A. (1987) Choosing preferences by constructing institutions: a cultural theory of preference formation. Americal Political Science Review 81: 3-22. Wildavsky, A. (1988) Political Culture and Political Preferences. Americal Political Science Review 82: 593-596.

10 His argument is derived from the observation that markets (the place for exchange) and societal production (or: public welfare) operate better by means of external controls, monitoring mIes and credible commitments. e. e. production): 'Institutions affect the performance of the economy by the costs of exchange and transformation' (North, 1990: 6). Transaction costs are effective if they promote market behavior and efficient if they increases economic wealth. Institutions are part of this idea and indispensable as they reduce uncertainty for individuals in exchange relations and complexity as monitoring devices of societallife for organizations.

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