Abstract:

This paper examines Thomas Piketty’s proposals for reducing economic inequality through the lens of New Institutional Economics (NIE) as the primary analytical framework, complemented by Public Choice Theory as a secondary explanatory layer addressing political constraints. Inequality is conceptualized as an institutional outcome embedded in historically evolved rules, enforcement mechanisms, and political equilibria rather than as a purely market-driven phenomenon. The study evaluates Piketty’s reform agenda, including progressive taxation, social ownership, and universal capital endowments, using an institutional feasibility framework based on incentive compatibility, enforcement capacity, and political sustainability. The analysis demonstrates that although institutions are central in shaping inequality, Piketty’s proposals face structural constraints arising from transaction costs (Coase, 1937, pp. 386-392), institutional path dependence (North, 1990, pp. 80-92), and political economy distortions (Olson, 1965, pp. 53-65; Buchanan & Tullock, 1962, pp. 19-35). The findings suggest that his framework is normatively coherent but institutionally constrained within contemporary capitalist systems characterized by global capital mobility and fragmented governance.