Abstract
The aim of this paper is twofold. First, we offer a methodological
reflection on how the explanatory virtues of economic theories can be assessed
in a systematic way. Second, we use that theoretical apparatus to study the
explanatory virtues of Transaction Cost Economics (TCE, henceforth).
Precisely, we are primarily interested in assessing the progress within TCE
with respect to its explanatory power rather than directly comparing TCE’s
explanatory virtues to alternative theories. The paper offers also some general
insights into the way we compare economic theories.