Abstract
This paper introduces the notion of surprising institutions. We often carry incorrect beliefs about the world surrounding us and we are often mistaken about the nature of the institutional structure. The case story in this paper shows that an institution may come as a surprise, even though its origins lies some 500 years back, and that the information we receive as feedback on our actions does not necessarily improve our understanding of the institutional structure. It turns out that it is possible for an “ordinary citizen (professor of economics)” to win a case against a multinational corporation and an age-old government agency (what a surprise!), but it also transpires that even if you win, you lose (not quite a surprise).
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Notes
- 1.
As noted in behavioural economics, our beliefs tend to be wrong on average, for example, because we are overconfident, we conclude from too small samples, and we expect our future preferences to be close to the present ones, cf. DellaVigna (2009).
- 2.
Even today, Karl IX seems to have a less good reputation in this part of Sweden compared to the rest of the country where Karl’s efforts to present himself as the bulwark against papism (suspect friendliness towards Catholicism) seems to have worked better (Petersson 2009). Linköping is situated in the County of Östergötland, which incidentally is where our property was situated.
- 3.
- 4.
Sweden was relatively early with many public institutions. For example, the Bank of Sweden (Sveriges Riksbank) was founded in 1665, and in 1749 demographic statistics were collected for the first time making Sweden and Finland the countries with the longest continuous records of that kind.
- 5.
Heckscher (1936, 688).
- 6.
Institutions are sometimes defined as shared beliefs, e.g., Aoki (2001). This obviously makes it pointless to talk about surprising institutions. However, the phenomena I deal with in this essay would still have to be considered.
- 7.
The overarching principle behind the extensive rules and regulations in classical Athens was “that absolutely nobody is to be trusted” (Davies 1994, 204). Similarly, Hansen (1999, 310), concludes that “the Athenians had the characteristic of being honest with themselves about themselves. […] they went on the basis that, given the chance, every one of them would have his hand in the till and make a profit out of political activity, and they took every possible means to limit the chances.”
- 8.
The county court of Dalarna has been assigned this function as a court of administrative law (Förvaltningsrätt).
- 9.
In Swedish: “ändamålsenliga undersökningar”. Minerallagen, 2 kap, § 6.
- 10.
Mineralförordningen SFS 1992:285, § 7.
- 11.
I hate to admit it, but this sound reasonable. It still feels unfair though, when you as an individual is confronting a major company.
- 12.
The fact that Lundin Mining wrote such a sloppy application could be seen as an indication that they firmly believe that Bergsstaten will be on their side and will grant them an extension anyway.
- 13.
Förvaltningsrätten i Dalarna, Dom 2010-12-01, Meddelad I Falun, Mål nr 394-10, Enhet 2.
- 14.
For the record, however, the buyer himself is one of the more friendly persons we have ever met.
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Lyttkens, C.H. (2015). Surprising Institutions. In: Bitros, G., Kyriazis, N. (eds) Essays in Contemporary Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-10043-2_8
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