In seeking to replace the traditional approach, the new institutional economics has developed. Some economists have emphasised the role of transaction costs, incorporating an important feature of the real world into theory.
What today’s orthodoxy represents is, above all, a particular (and not inevitable) refinement and elaboration of the core ideas from that broader tradition relating to market functioning and self interested behaviour. The price paid for the refinement has been a considerable narrowing of focus and a tendency to segregate from the main corpus of theory the questions and phenomena for which the refined theory is ill-suited (1982, p. 43).
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