Issues of governance have been at the heart of the ongoing world economic crisis. The failure by boards of directors, for instance, to police excessive compensation, or prevent bonuses that reward excessive risk taking, can be considered a corporate governance issue.
There are two things that annoy me about this quote. First, the application of the modifier "excessive" to other people's judgements of appropriate levels of risk and reward betrays a misunderstanding of the origin of values. Value cannot exist independently of a person (or company of people) facing a choice between different courses of action. What level of risk and reward is to be considered "excessive" is a question exclusively for those bankers and financiers deciding how to pay their employees. Were Karl Ritter and Matt Moore to start telling me that my intake of coffee, for example, was "excessive" I'd quite rightly tell them to get stuffed (there is no category error in this comparison - don't fall into that hole).
Second, other aspects of the economic crisis, including monetary policy for example, are not even mentioned as contextual limits to the importance of Ostrom & Williamson's research. Would such corporate governance problems have arisen to such a degree had the US Federal Reserve not kept interest rates so low for the best part of the last two decades? One does wonder...
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