How is credibility related to neo-classical theory, particularly neo-institutionalism?

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Accepted Answer

“It is not being insinuated that a single body of literature exists that represents the ‘neo-liberal’ or the ‘neo-classical’ theory that is consistent in its entirety. Instead, their premises comprise diverse inconsistencies and constituent elements that may concur or be contradictory in nature. However, it is asserted that certain neo-liberal, neo-classical postulates or assumptions exist around which scholarly debate and regular empirical validation occur. These wield significant ascendancy over developmental policy and intervention. These postulates include: (1) institutions can be designed exogenously (i.e. intentionally) and subsequently enforced; (2) institutional change is characterized by equilibrium; and (3) the form of institutions (i.e. formal, secure and private property rights) is imperative for development and growth. By contrast, alternative postulates are put forward.” See: P. Ho, “An endogenous theory of property rights: opening the black box of institutions”, Journal of Peasant Studies, 2016, 43/6, p. 1124. [ap_toggle title="ALTERNATIVE POSTULATES" status="close"]The constituting premises of the Credibility Thesis are as follows:

“Institutions are the resultant of endogenous, unintentional development. Although actors have intentions there is no agency that can externally design institutions, as all actors’ actions are part of the same autonomous, spontaneously ordered game.”
“Institutional change is driven by disequilibrium. Contrary to the notion that institutions settle around equilibrium, actors’ interactions are seen as an ever-changing and conflicting process in which stable status is never reached. One could see it as a ‘Dynamic Disequilibrium’ or institutional change as perpetual alteration, yet with alternating speeds of change: sometimes imperceptibly slow, sometimes sudden and with shocks.”
“Institutional form is subordinate to function. In other words, the use and disuse of institutions over time and space is what matters for understanding their role in development, not their appearance.”

See P. Ho, “An endogenous theory of property rights: opening the black box of institutions”, Journal of Peasant Studies, 2016, 43/6, pp. 1124-25. [/ap_toggle]