A Practical Approach to Understanding: The Possibilities and Limitations of Applied Work in Political Economy

Abstract What can the applied economist do? In order to explore issues playing out in the “real world” of the past or present, the applied social scientist has to make a series of decisions about what they will accept as the facts of the situation. Particularly for research questions in which the beliefs, plans, and motivations of individuals matter – such as institutional analysis – this task requires the development of some degree of intersubjective understanding, or verstehen. For over 50 years, the Bloomington School of Institutional Analysis has been using fieldwork and deep archival history to conduct meaningful institutional analysis that takes interpretation and the quest for understanding seriously. As such, those who wish to take up the call for economists to take an “interpretive turn” can gain a great deal of insight and practical advice from the study of the Bloomington School’s methods and approach.