(Monday, November 05, 2007)
Economists have traditionally studied markets and the state. They have developed a sophisticated theory that uncovers the desirable balance between the two institutions. What has been missing from that enormous literature is an institution of the greatest importance in the lives of people in the poor world, namely, communities. In this lecture, Prof. Dasgupta regarded communities as a class of economic institutions. Specifically, he showed the way in which communities solve resource allocation problems in villages and towns; and described the ways in which they differ from markets. He also pointed out the strengths and weaknesses of communities as well as related the idea of communities to a somewhat different subject studied recently by sociologists and political scientists, namely, "social capital".