Moral Capabilities and Institutional Innovation - An Extended Transaction Cost Approach

When facing complex ethical problems, assigning responsibility is a difficult undertaking with far-reaching consequences. Chapter 3 by Thomas Beschorner and Martin Kolmar addresses this foundational issue by arguing for a multilevel approach that rejects this either/or thinking of moral actions versus institutions. It proposes using an extended transaction cost approach (inspired by economics) in order to determine a fair sharing of moral responsibilities among individual and organizational actors and social institutions. As moral agency and institutions are interdependent – which is obvious from a dynamic perspective – they not only shape but also are shaped by each other. This multilevel approach implies that governance is important at each level and requires coordination to address complex ethical problems.