Meso-Economics: The Proper Dimension of Institutional Emergence and Cultural Development—A Conceptual Frame

The “meso” level of a socio-economy, logically located between “micro” and “macro”, but in fact a theoretical tier on its own, has been neglected in mainstream economics. However, in the tradition of evolutionary-institutional and complexity economics, it has been theorized, focusing on informal institutions emerging as “structures” from collective problem-solving of intricate direct interdependencies and interactions, the ubiquitous “commons” or social dilemma problems. Institutions may condense into norms and ethics and represent a larger cultural development. As an emerging phenomenon, this is beyond static-statistical “mid-sized” entities. While agents and their interactions define the micro level, “aggregation” in entire populations and economies remains “macro”, including the state and its formal-legal rules. But the dimension of structural emergence of institutions is meso. With the rise of evolutionary modeling and agent-based computation and simulation, its size dimension could be analyzed. Limited human cognitive capacities and the experienced expectations of future “meeting again” interaction partners depend on entire population size, interaction arena, and co-evolving group sizes. Meso-size is also consistent with findings of evolutionary anthropology and modern brain science. In an “evolution-of-cooperation” approach, we analyze the meso-size of the group of institution-carriers. Agents may learn collective problem-solving in such co-evolution of the carrier-group size, above some minimum size, but below the size of the entire population, while attaining a higher performance and a superior evolutionary replication. Beyond the deterministic model solution, we provide a stochastic population approach, explore required agency capacities, and determine minimum and maximum critical masses of cooperators. Meso-size thus is the logical space of cultural evolution.