This chapter turns to the explicit evaluative and normative issues that have been raised in judging institutions and institutional change and the way they have been dealt with by both old and new institutionalists. The first and most fundamental of these issues is how “efficiency” or “social good” is to be defined. Within the context of changing institutional rules these terms become extremely difficult to delineate in any unambiguous way. Another issue concerns the extent to which evolutionary, market, and non-political processes generally are better guarantors of efficiency or social benefit (however defined) than processes of deliberative governmental intervention and design. The third question of concern here is what is the most desirable type of institutional reform, assuming, of course, that some “failure” in existing institutions has been found to exist. The answers given to these questions vary both within and between the old and the new institutionalism. It useful to begin the discussion with some of the principal approaches and areas of debate.

Approaches to appraisal

The various approaches to normative issues found within the OIE and NIE can be categorized in a variety of ways. In some categories, the approaches of the old and the new tend to finish up on opposite sides, although with varying degrees of difference and with less distance between the more moderate representatives of each group than is sometimes thought. With other categories, however, no such clear division between the old and new appears.