Far back in 1990, the organizers of one Nobel Symposium had noticed, as appeared later in the conference proceedings, that "...we even found that the phenomenon called 'the firm' seemed to be nothing more than a structure of particular contracts. An enormous black box thus revealed itself at the very center of economic theory, waiting to be opened." Sure enough, this symposium produced a Nobel Prize the next year – to Ronald Coase, "for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy."
However, that was the last time anyone heard of contract theory or organizations or institutional economics from the Swedes until last October, when they cited Oliver Williamson and Elinor Ostrom for “major contributions to our understanding of economic governance” (if you don’t count Douglass North for his work in history to explain institutional and economic change, that is). Why such a long silence?
Here are some thoughts from the Economic Principles. At the end, it pointed out, and I totally agree that "It’s worth remembering, therefore, that economics is a very young science, and that it still has got a long way to go. If the Swedes have been cautious, it is because the larger framework of the economics of organizations remains, for the most part, an enormous black box."