Social models and institutional policy: four walks in the dark

Thráinn Eggertsson

Chapter 9 in Handbook on Institutions and Complexity, 2025, pp 174-189 from Edward Elgar Publishing

Abstract: Abstract: The chapter is a retrospective on my empirical studies in institutional change and discusses institutional policy in the context of uncertainty and incomplete social models. The first section, The Framework: Social Models and Institutional Policy, contains a brief outline of my theoretical framework. The second section, Social Models in Action, discusses four empirical issues and their link to social models: The Gold Standard and Macroeconomics discusses macroeconomic models and the reintroduction of the gold standard during the interwar years. My social-models approach was inspired by the old (and new) theory of macroeconomic policy. In recent decades, macroeconomics has increasingly recognized the role of uncertainty and incomplete social models. Game Against Nature in Historical Iceland looks at the logic and deadly consequences of a persistent norm in the farm community of pre-modern Iceland that required farmers to share their feed reserves with neighbors. Electronic Health Database as a Matryoshka Doll revisits the struggle between the corporation Decode Genetics and Icelandic doctors over control of Iceland's health records. The struggle was motivated by incomplete social and biological models. China and the Democracy Constraint: Artificial Civic Virtue? outlines President Xi Jinping's attempt to override the democracy constraint and put China's economy on the world productivity frontier, using artificial intelligence and digital technology to generate civic virtue and the spirit of innovation. I argue that Mr Xi's ambitious strategy is a walk in the dark.

Keywords: Imperfect knowledge; Social Models; Gold standard; Norms; Health records; Digital dictatorship (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035309719
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