Economic governance and social networks

27May10

With my long-time co-authors Emmanuel Lazega and Lise Mounier, we have just drafted a new paper on issues of economic governance, based on a case study of the Commercial Court of Paris and using social network analysis as a tool. The paper will be presented next week at a conference on Economic Governance hosted by the University of Greenwich. It is available here.

The interest of economists for governance issues has increased a lot in recent decades, and literature in this area has been growing exponentially. This pre-dates the current financial crisis and is evident in the policy orientations of international economic institutions such as the IMF and the World Bank in the 2000s -a major turn with respect to the strongly pro-free-market, anti-regulation ideologies of which many accused them in the aftermath of the Asian, Russian and Argentinian crises of the late 1990s.

The interesting thing about governance is that norms and regulations are not only those that are formally codified  and imposed by national or super-national authorities. Economic sociology and social network analysis have long emphasized how norms may have a more informal nature and grow out of agents’ own perceptions, actions, and inter-individual interactions. This bottom-up approach is now of great interest for economists as well.

In this perspective, there is scope for greater inter-disciplinary dialogue and cross-fertilisation. In particular, social networks may constitute the channel through which norms emerge and spread over a population or community, and thus shape the structure of incentives and costs that business and other economic actors face.

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Filed under: Business networks, Economic sociology, Social networks   |  3 Comments
Tags: Economic governance, Intra-organisational networks, Network Analysis