Collective objectives, particular objectives, and structural conditions: On Pasinetti’s natural economic system and the “institutional problem”

The paper builds on Pasinetti's separation between a dynamic path that provides a normative framework (the “natural economic system”) and the need to devise concrete institutions to approximate that path (the “institutional problem”). The paper argues that addressing the “institutional problem” requires theorising the role of actions within economic structures. By doing so, it proposes an approach to institutional analysis that shows how an economy growing with structural change offers opportunities for, and imposes constraints on, the pursuit of collective objectives as well as particular objectives by social groups variously defined. It also makes it possible to address the interplay between collective and particular objectives. A key argument is that how social groups themselves represent structures and their position therein is a nonreducible factor to explain which dynamic path an economy follows out of those which a given structure makes possible.