Economics, institutional economics and economic sociology

Abstract

The division that existed between economics and sociology survived until the 1970s. Economics focuses on the market by emphasizing the framework of rational choice under the constraints of given preferences, whereas sociology emphasizes the roles of culture, structures and values. These disciplinary definitions changed radically after the 1970s, when both new institutional economics and economic sociology made significant achievements in terms of both theory and research. The nature of the relationship between orthodoxy and heterodoxy in economics also radically changed after the 1970s. The aim of this paper is to discuss the relationship between economics and sociology by focusing on the developments in orthodoxy and heterodoxy in economics. As the label of institutional economics is used by both orthodoxy and heterodoxy, the paper will also focus on institutional economics.