Investigation of the Components of the Complexity Paradigm in the New Institutional Economics

According to Kuhn, science in general has a paradigm that comprises three elements, namely, epistemology, ontology, methodology. The simplicity paradigm was formed after the Renaissance based on the ideas of Descartes and Newton. The method of understanding was based on the reduction of each phenomenon to its components. From the second half of the nineteenth century, with the discovery of irregular phenomena, quantum theories, and chaos, simplification was challenged and a new approach called the "complexity paradigm" was formed.
 The neoclassical, as the representative of the economic mainstream, is dominated by simplicity. New Institutional Economics (NIE) as the dominant institutional approach has a corrective (rather than critical) approach to neoclassical. This issue, in combination with the diverse and complex institutional structures in different societies, defines the purpose of this study to examine the components of complexity in NIE. Scholars introduce these institutions as the structure, rules of interaction, and patterns that govern human life. The findings show that institutional ontology is a complex realism and its methodology is pluralistic. The use of institutions to reduce uncertainty in combination with different mental models suggests that this approach benefits from both objectivism and subjectivism. Given the role of institutions in interaction, it is clear that the Inter- Objectivity of knowledge and strategy is emphasized by institutionalists. Consistent with the results, the NIE is influenced by the complexity.