GIFTS AND MARKETS: An institutionalist perspective Ioana Negru Anglia Ruskin University Ashcroft International Business School

Issues to discuss Implications of the Polanyi/Hicks perspective on the development of economic systems; Co-existence of gift and markets; Conventional understanding of gift within mainstream economics - and the acceptance of the historical evolution from gift-economy to market-economy; The neglect of the concept of gift by mainstream economists.

Polanyi (1957) and Hicks (1969) Polanyi (1957) and Hicks (1969) have considered whether norms and markets are two rival institutions; Both these historical accounts establish the presence of markets within society prior to the emergence of capitalism; Both emphasise the importance of the institutional context of markets.

Polanyi (1957) and Hicks (1969) Both models place self-regulating markets in historical opposition to earlier modes of economic provisioning and transaction; Linear model of market development has subsequently been widely accepted within contemporary economics; Two consequences of this are (a) the acceptance of the incompatibility of gifts and markets; and (b) the location of altruism as a phenomena outside the realms of market and economic behaviour.

Institutional nature of markets Historical studies identify the institutional nature of markets beyond simple exchange; Presence of certain features of modern markets co-existed within primitive economies; Likewise within present day capitalist systems, social institutions that are supposedly in opposition to market mechanisms continue to flourish; Therefore the transformation of economic systems is neither entirely linear nor completely self-substituting.

Gift-giving, altruism and economics Gift and gift-giving is a complex institution which has manifested itself with different meanings throughout time; Economic anthropological literature distinguishes between (a) assimilated gift as a form of exchange; and (b) presented gift in opposition to market; Neoclassical economics has accepted this position - and has neglected the analysis of gift as part of the confines of the market (e.g. Arrow, Sugden, and Becker); Beyond considering altruism as an explanatory trait of human behaviour, this approach neglects the social dimension of developmental processes.

Implications for economic analysis and development economics A linear model of development which emphasizes an organic replacement of a gift- economy with a market system has to be challenged; The historical evidence and the current economic experience within transitional and developing economies could be an argument for more attention paid to gift-giving and the importance of gift as an institution;

Implications for economic analysis and development economics Narrow conception of gift and markets within mainstream economics; Institutional plurality and diversity within contemporary economic systems; Whilst NIE does not discuss the gift institution, OI economists such as Hodgson mention gift, but still endorse the Polanyian system that generates an absence of the gift elements from the contemporary systems based on markets.