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Ronald Coasewas a British-born American economist who was awarded the Nobel Prize for Economics in 1991. The field known as new institutional economics, which attempts to explain political, legal, and social institutions in economic terms and to understand the role of institutions in fostering and impeding economic growth, originated in work by Coase and others.
Coase attended the London School of Economics (LSE), receiving a bachelor of commerce degree in 1932, and then earned a D.Sc. in economics from the University of London in 1951. He was employed at various universities, including the LSE (1935â51), the University of Buffalo, New York (1951â58), and the University of Virginia, Charlottesville (1958â64). At the University of Chicago Law School he served as professor of economics (1964â81), professor emeritus and senior fellow in law and economics (from 1982), and editor of the Journal of Law and Economics (1964â82). He was the founding president of the International Society for New Institutional Economics (1996â97). From its creation in 2000 he served as research adviser to the Ronald Coase Institute, which promotes the study of new institutional economics.
Coase did pioneering work on the ways in which transaction costs and property rights affect business and society. In his most influential paper, The Problem of Social Cost (1960), he developed what later became known as the Coase theorem, arguing that when information and transaction costs are low, the market will produce an efficient solution to the problem of nuisances without regard to where the law places the liability for the nuisance. His work was a call to legal scholars to consider the process of bargaining about rights outside the context of litigation. Coaseâs other published works include The Nature of the Firm (1937), his seminal paper in which he introduced the concept of transaction costs to explain the evolution of companies and industries; The Firm, the Market, and the Law (1988); and How China Became Capitalist (2012; with Ning Wang).
