Economic Governance and Institutional Design

ABSTRACT How should institutions be designed to achieve compliance with behavioral rules, including laws, social norms, religious rules, or cultural traditions? This conceptual paper introduces a typology of economic governance institutions and explains how it can be used both by policy makers, administrators, and researchers in all social sciences to improve rule compliance. It explains how effective and efficient institutions can be identified for a given economic governance problem. The framework is built on the microeconomic foundations of economic governance theory, and its applicability extends to any compliance problem that can be formalized as a social dilemma or coordination game. The concepts are applied to two cases: how to create trust in cloud computing technologies, and how to implement data sharing of user‐generated information on data‐driven markets.