The Role of Institutions in Interorganizational Collaboration within Tourism Regions

The new institutional economics (NIE) developed in 1960s and 1970s as a continuation of traditional institutionalism at the turn of the nineteenth and twentieth centuries. Its representatives are, among others: Williamson (1981), Jensen and Meckling (1976), Fama and Jensen (1983), and North and Thomas (1973, 1995). The approach adopted by NIE is different from neoclassical economics (Pejovich, 1999; Williamson, 1981), according to which entities when making a decision follow a utility maximizationpolicy. In this orthodox thinking represented by neoclassical economics, factors such as mentality, habits, and value systems of the entities do not matter. On the contrary, according to NIE many noneconomic determinants influence entities’ behavior. In this approach, an entity and its rationality are embedded in their social, historical, and cultural contexts. Contexts are created by formal institutions (i.e., different types of legal rules) and informal ones (such as values, traditions, customs, habits, culture, morality, and so on) rooted in the cultural heritage of a particular community. Representatives of NIE stress that formal institutions exist and operate within informal ones, being a historical heritage of a particular nation.