The Course is divided into three main parts. The first part introduces and describes the main characteristics of the institutions. After the explanation of the main definitions, the concept of institutional change is described. The theoretical problem of cooperation is discussed by recalling the main references of economic theory, before introducing the topic of the logic of behavior, also in the theory of institutions. In the following, the theory of exchange, in light of the theory of institutions, is proposed, before explaining in detail the formal and informal constraints involving both individuals and organizations. The theme of organizations is discussed in parallel, as a useful aspect for understanding institutional change. The first part of the program ends with an explanation of the so-called application guarantee, transaction costs and transformation costs. This part of the program contributes to understanding the effectiveness of historical changes, of differences between countries and of divergent development paths, even conceptually distancing from the traditional economic theory.
The second part of the program is entirely focused on institutional change. It is necessary to resume and deepen the role and characteristics of organizations, introduced in the previous modules. To these notions, those of learning and the associated institutional change must be added. In the following, we discuss the relationship between institutional change and stability, finally tracing the so-called path of institutional change.
Starting from the neoclassical model, and after having clarified aspects such as incomplete information, limited cognitive abilities, the tendency of individuals not to cooperate for the collective advantage, the third part of the program is introduced, which substantially concerns the concept of evolution of the economy. The first aspect considered is, of course, the relationship between institutions, economic theory, and economic evolution. The theme of the institutions that shape the environment where the economic agents operate is once again considered, which institutions try to shape for its best functioning. We consider the costs of negotiation, execution and implementation (transaction costs) to create institutions, comparing them with the benefits offered. The program ends with the consideration of stability and change from the perspective of economic history, and of the problems of integration between economic theory, economic history, and the analysis of institutions.