POSXXX10.1177/0048393120971545Philosophy of the Social Sciencevan Basshuysen 971545research-article2020 Article Philosophy of the Social Sciences 1 –24 How to Build an © The Author(s) 2020 Institution https://doi.org/10.1177/0048393120971545Article reuse guidelines: sagepub.com/journals-permissions DOI: 10.1177/0048393120971545 journals.sagepub.com/home/pos Philippe van Basshuysen1 Abstract How should institutions be designed that “work” in bringing about desirable social outcomes? I study a case of successful institutional design—the redesign of the National Resident Matching Program—and argue that economists assume three roles when designing an institution, each of which complements the other two: first, the designer combines positive and normative modeling to formalize policy goals and to design possible mechanisms for bringing them about. Second, the engineer refines the design by conducting experiments and computational analyses. Third, the plumber implements the design in the real world and mends it as needed. Keywords economic design, engineering, plumbing, normative modeling, algorithmic bias 1. Introduction Economists increasingly aspire to create or change institutions in order to bring about desirable social outcomes. While this field of economic design is growing, philosophers of social science have to date focused on a single case, namely the design of the early spectrum auctions conducted by the Federal Communications Commission (FCC) (Alexandrova 2008; Guala 2005). But by focusing on one case only, they have fallen short of providing a general Received 11 October 2020 1Leibniz University Hannover, Hannover, Germany Corresponding Author: Philippe van Basshuysen, Leibniz University Hannover, Im Moore 21, 30167 Hannover, Germany. Email:
[email protected] 2 Philosophy of the Social Sciences 00(0) account of the practice of economic design.