The paper "The New Comparative Economics" by Simeon Djankov, Edward L. Glaeser, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer explores the revival of comparative economics with a focus on capitalist economies. The authors argue that institutions play a profound role in economic development and that understanding the tradeoff between the costs of disorder and dictatorship is crucial for comprehending capitalist institutions. They apply this logic to study the structure of efficient institutions, the consequences of colonial transplantation, and the politics of institutional choice. The paper begins by discussing the traditional field of comparative economics, which primarily compared socialism and capitalism. However, with the collapse of socialism, the focus shifted to understanding the differences among capitalist models. The authors highlight that each capitalist economy has numerous public and private institutions that function to choose political leaders, secure property rights, redistribute wealth, resolve disputes, govern firms, and allocate credit. These institutions vary significantly across countries and have significant impacts on economic performance. The authors introduce the concept of the Institutional Possibility Frontier (IPF), which represents the tradeoff between the social costs of disorder and dictatorship. They argue that efficient institutional choices lie at the tangency point of the IPF and the efficient institutional choice for a given society or sector. The shape and location of the IPF vary across activities and societies, influenced by factors such as civic capital, technology, human capital, and inequality. The paper then applies this framework to three historical episodes: the divergence between France and England in their legal systems, the rise of the regulatory state in the United States during the progressive era, and the post-communist transition in Eastern Europe and the former Soviet Union. Each case study illustrates how efficient institutional choices were made based on the institutional possibilities of the respective societies. Finally, the authors discuss the implications of their framework for understanding the transition from socialism to capitalism in Eastern Europe and the former Soviet Union. They argue that the collapse of communism led to a sharp decline in dictatorship and an increase in disorder, with Russia experiencing a more dramatic shift along its IPF compared to non-reforming states like Belarus and Uzbekistan. The paper concludes by emphasizing the importance of considering economic and social change within the context of each country's institutional possibilities.The paper "The New Comparative Economics" by Simeon Djankov, Edward L. Glaeser, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer explores the revival of comparative economics with a focus on capitalist economies. The authors argue that institutions play a profound role in economic development and that understanding the tradeoff between the costs of disorder and dictatorship is crucial for comprehending capitalist institutions. They apply this logic to study the structure of efficient institutions, the consequences of colonial transplantation, and the politics of institutional choice. The paper begins by discussing the traditional field of comparative economics, which primarily compared socialism and capitalism. However, with the collapse of socialism, the focus shifted to understanding the differences among capitalist models. The authors highlight that each capitalist economy has numerous public and private institutions that function to choose political leaders, secure property rights, redistribute wealth, resolve disputes, govern firms, and allocate credit. These institutions vary significantly across countries and have significant impacts on economic performance. The authors introduce the concept of the Institutional Possibility Frontier (IPF), which represents the tradeoff between the social costs of disorder and dictatorship. They argue that efficient institutional choices lie at the tangency point of the IPF and the efficient institutional choice for a given society or sector. The shape and location of the IPF vary across activities and societies, influenced by factors such as civic capital, technology, human capital, and inequality. The paper then applies this framework to three historical episodes: the divergence between France and England in their legal systems, the rise of the regulatory state in the United States during the progressive era, and the post-communist transition in Eastern Europe and the former Soviet Union. Each case study illustrates how efficient institutional choices were made based on the institutional possibilities of the respective societies. Finally, the authors discuss the implications of their framework for understanding the transition from socialism to capitalism in Eastern Europe and the former Soviet Union. They argue that the collapse of communism led to a sharp decline in dictatorship and an increase in disorder, with Russia experiencing a more dramatic shift along its IPF compared to non-reforming states like Belarus and Uzbekistan. The paper concludes by emphasizing the importance of considering economic and social change within the context of each country's institutional possibilities.