Governing the Environment: the Intitutional Economics Approach

2009 ◽  
pp. 61-86
Author(s):  
Arild Vatn
Keyword(s):  
Transaction Costs ◽  
Environmental Governance ◽  
Institutional Economics ◽  
Specific Area ◽  
New Institutional Economics ◽  
Neoclassical Economics ◽  
Institutional Perspective ◽  
Institutional Structures ◽  
Plural Rationalities ◽  
Jel Classifications

- Analyzing environmental governance implies foremost to analyze institutional structures and their implications. In doing so, the present paper utilizes insights primarily from the tradition of classical institutional economics. The paper is divided in three. In the first part I describe the main features of the classical position and compare it briefly with that of neoclassical economics and the tradition of new institutional economics. In the second part I clarify what is considered the main aspects of governance as seen from an institutional perspective. In part three I move to the more specific area of environmental governance. The concept of resource regimes is defined. Moreover I analyze how different regimes influence which environmental problems appear and how they can be treated. I discuss how institutions influence the formation and articulation of knowledge and values, how they form and protect interests, how they influence the level of transaction costs and hence the possibilities for coordination, and finally how they form the motivations underlying human choices in concrete contexts. Given that all these variables are shown to be endogenous to the institutional system, the use of comparative analysis in the assessment of various governance options is emphasized.Keywords: classical institutional economics, interdependence, resource regimes, value articulation, interest protection, transaction costs, plural rationalities.JEL classifications: B52; Q50; D02; D70.

scholarly journals Organizations and Markets

1991 ◽  
Vol 5 (2) ◽  
pp. 25-44 ◽  
Author(s):  
Herbert A Simon
Keyword(s):  
Asymmetric Information ◽  
Organizational Behavior ◽  
Transaction Costs ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Neoclassical Economics ◽  
Profit Motive ◽  
Highly Effective ◽  
Market Driven ◽  
Organizational Mechanisms

The economies of modern industrialized society can more appropriately be labeled organizational economies than market economies. Thus, even market-driven capitalist economies need a theory of organizations as much as they need a theory of markets. The attempts of the new institutional economics to explain organizational behavior solely in terms of agency, asymmetric information, transaction costs, opportunism, and other concepts drawn from neoclassical economics ignore key organizational mechanisms like authority, identification, and coordination, and hence are seriously incomplete. The theory presented here is simple and coherent, resting on only a few mechanisms that are causally linked. Better yet, it agrees with empirical observations of organizational phenomena. Large organizations, especially governmental ones, are often caricatured as “bureaucracies,” but they are often highly effective systems, despite the fact that the profit motive can penetrate these vast structures only by indirect means.

scholarly journals Gender and Transaction Costs in Use of Zero Grazing Net for Tsetse Fly and Trypanosomiasis Control in Stall Feeding Systems in Kenya

2017 ◽  
Vol 7 (3) ◽  
pp. 96
Author(s):  
Jared Isaboke Mose
Keyword(s):  
Transaction Costs ◽  
Institutional Economics ◽  
Survey Design ◽  
Sampling Technique ◽  
New Institutional Economics ◽  
Tsetse Fly ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Men And Women ◽  
Zero Grazing

Trypanosomiasis is a widespread constraint in livestock production, mixed farming and human health in Africa. Several technologies have been developed to ameliorate the effects of the disease but delivery of these technologies to farmers has been undertaken on trial and error basis without a proper strategy leading to more failure than success and wastage of scarce resources. The purpose of this paper was to carry out an analysis of transaction costs incurred in accessing and using insecticide treated net in tsetse and trypanosomiasis control among smallholder cattle farms in Busia County, Kenya. The study utilized cross–sectional survey design and was guided by the New Institutional Economics approach and utilized stratified and simple random sampling technique to get 211 respondents for the study. Data was collected by use of structured questionnaires and analyzed using descriptive and inferential statistics. Conjoint analysis results for zero grazing net showed that cost was the most important factor influencing farmers’ decision, accounting for 38.52% of the total while durability and availability each accounted for 25% and retreatability accounted for 10% of the decisions. Further t-test results showed that there were significant differences between men and women with respect to attribute scores (at 99 d.f. and alpha = 0.05%) suggesting that men and women face different transaction costs in accessing T&T control technologies. Therefore there is need for gender sensitive strategies in T&T technology design and dissemination. Tsetse fly and Trypanosomiasis control by use of low cost technologies such as insecticide treated zero grazing net should be promoted by government and other development partners. The net should be affordable, available at supply outlets close to farmers, long lasting and re-treatable for famers to take it up.

scholarly journals Experiments as a Tool of Verifying Efficiency of Implicitly Agreed-Upon Market Organizations

Ekonomika ◽  
2008 ◽  
Vol 83 ◽  
Author(s):  
Rafał M. Jakubowski ◽  
Paweł Kuśmierczyk
Keyword(s):  
Experimental Study ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Market Institutions ◽  
Coordination Problem ◽  
Market Participants ◽  
Potential Market ◽  
Institutional Structures ◽  
Pareto Efficient ◽  
Market Organization

We analyse the possibility of an experimental study of the efficiency of market institutional structures. In the paper “On the new institutionalism of markets: the market as an organization” by R. Richter, the implicitly agreed upon market organization is regarded as a Nash equilibrium of a game between potential market participants. The solution of such coordination problem is not necessarily Pareto-efficient but could be efficient given assumptions of New Institutional Economics (i. e. could be NIE-efficient). This framework can be very helpful as a descriptive tool used to explain the persistence or transition of market institutions, but in can be difficult to be verified empirically.Economic experiments have been successfully applied to analyse market institutions and to compare their efficiency. In the paper, we demonstrate how this methodology could be used to analyse the “spontaneous” market organizations reached as a tacit agreement in a coordination problem. We also advocate that economic experiments can be a very useful tool to verify the efficiency of such institutions.

Institutional Structures and the Prevalence of Foreign Ownership of Firms

2018 ◽  
pp. 455-479
Author(s):  
Otuo Serebour Agyemang
Keyword(s):  
Institutional Economics ◽  
Positive Association ◽  
Foreign Ownership ◽  
New Institutional Economics ◽  
African Countries ◽  
Significant Positive Association ◽  
Country Level ◽  
Regulatory Quality ◽  
Institutional Structures ◽  
High Voice

This chapter examines how country-level institutional structures influence the prevalence of foreign ownership of firms in Africa. It reinforces the new institutional economics perspective by empirically highlighting that institutional structures influence the prevalence of foreign ownership of companies in an economy. Using archival data from 39 African economies, the authors found that there is a significant positive association between regulatory quality and foreign ownership prevalence. Also, foreign ownership is prevalent in African countries that are politically stable and embrace rule of law. However, the authors found that countries with high voice and accountability structures are associated with low foreign ownership prevalence.

scholarly journals Barriers to exit encountered by small farms in light of the theory of new institutional economics

2018 ◽  
Vol 64 (No. 6) ◽  
pp. 277-290 ◽  
Author(s):  
Satola Lukasz ◽  
Wojewodzic Tomasz ◽  
Sroka Wojciech
Keyword(s):  
Transaction Costs ◽  
Eastern Europe ◽  
Structural Changes ◽  
Central And Eastern Europe ◽  
Institutional Economics ◽  
Rent Seeking ◽  
New Institutional Economics ◽  
Financial Resources ◽  
Small Farms ◽  
Production Resources

For at least 25 years, processes involving structural changes have been growing more and more intense in the countries of Central and Eastern Europe, with these processes including a decline in the number of small farms. The main aim of this paper is to present the mechanisms involved in, as well as barriers to and costs preventing the exit of farms from agriculture, including those that make it difficult to transfer production resources which are being released to other companies. This research takes the form of an overview and is based on the output of new institutional economics, and on transaction cost and rent-seeking theories in particular. The most frequent difficulties encountered in the process of exit from farming include low profitability of production and the shortage of capital among potential buyers, while the lack of sellers’ financial resources and the necessity of incurring expenses related to preparing and finalising the sale of resources held by them (the actual transaction costs related to closing down farms) are frequently overlooked. The most important barriers preventing the complete liquidation of farms are the inherent transaction costs categorised as expenses, as well as the emotional costs and costs of alternatives, which are difficult to evaluate and estimate. The following notions are particularly helpful in explaining barriers to exit from farming: the concept of transaction costs and rent-seeking theory, which are both a part of the stream of thought of new institutional economics.

The future of new institutional economics: from early intuitions to a new paradigm?

2014 ◽  
Vol 10 (4) ◽  
pp. 541-565 ◽  
Author(s):  
CLAUDE MÉNARD ◽  
MARY M. SHIRLEY
Keyword(s):  
Institutional Economics ◽  
New Institutional Economics ◽  
Neoclassical Economics ◽  
New Paradigm ◽  
Success Story ◽  
Policy Debates ◽  
The Future ◽  
Nobel Laureates ◽  
Analytical Tools

Abstract:The trajectory of institutional economics changed in the 1970s when new institutional economics (NIE) began to take shape around some relative vague intuitions which eventually developed into powerful conceptual and analytical tools. The emergence of NIE is a success story by many measures: four Nobel laureates in less than 20 years, increasing penetration of mainstream journals, and significant impacts on major policy debates. This rapid acceptance is remarkable when we consider that it was divided from birth into distinct schools of thought. What will be the future of NIE? Will it be quietly absorbed by mainstream theory, or will it radically transform neoclassical economics into a new paradigm that includes institutions? To address these questions, we follow the sometimes-bumpy road to NIE's current successes and ponder the challenges that lie ahead.

Blood, Sweat, and Tears: The Rise and Decline of the East German Economy, 1949–1988 / Blut, Schweiß, Tränen: Aufstieg und Niedergang der ostdeutschen Wirtschaft, 1949–1988

2000 ◽  
Vol 220 (4) ◽  
Author(s):  
Ulrich Blum ◽  
Leonard Dudley
Keyword(s):  
Information System ◽  
Life Cycle ◽  
Institutional Economics ◽  
Foreign Capital ◽  
German Economy ◽  
Economic Structure ◽  
New Institutional Economics ◽  
Neoclassical Economics ◽  
Economic Decline ◽  
East German

SummaryThe rise of the East-German economy in the 1950s and 1960s and its decline in the 1970s and 1980s is difficult to explain by neoclassical economics. However; the observed life cycle may be explained by the inclusion of concepts from old and new institutional economics and from functional economics. Three distinct periods may be identified. During the “blood” period of forced development and autocratic rule, the information system and the system of property rights were roughly compatible with the economic structure. Then, in the “sweat” period, an attempt to overtake the capitalistic societies failed. Finally, in the “tears” period, economic decline could only be disguised by unsustainable inflows of foreign capital. This institutional explanation of the East-German collapse is tested with data for the period 1949-1988 and cannot be rejected.

scholarly journals Let’s Break the Law: Transaction Costs and Advance Rent Deposits in Ghana’s Housing Market

2018 ◽  
Vol 7 (2) ◽  
pp. 333-354
Author(s):  
Kofi Oteng Kufuor
Keyword(s):  
Transaction Costs ◽  
Housing Market ◽  
Institutional Economics ◽  
Financial Burden ◽  
New Institutional Economics ◽  
The Law

A feature of the Ghana private rental accommodation market is that landlords usually demand advance rent of, in some instances, up to 5 years before signing a tenancy agreement. This is in violation of the 1963 Rent Act and recent initiatives are in the direction of curing this problem in the interest of protecting prospective tenants. However while advance rent is a financial burden this is offset by transaction costs in the housing market. Hence, in this paper and influenced by New Institutional Economics, I argue that it is possible for tenants and landlords to continue to bargain outside the shadow of the law to secure mutually beneficial tenancy agreements.

Governance in der Waldwirtschaft | Governance in forest economy

2003 ◽  
Vol 154 (2) ◽  
pp. 42-50 ◽  
Author(s):  
Martin Hostettler
Keyword(s):  
Transaction Costs ◽  
Basic Concept ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Added Value ◽  
Governance Structures

The Swiss forest economy has been trying for many years to improve logistics in the chain of the added value of wood. This work addresses necessary reforms to the system within the context of new institutional economics. The basic concept is explained, transaction costs of markets and hierarchies are presented systematically and the forms of governance structures outlined. The example of Swiss forest economy shows that fruitful points of departure can be developed aimed at reforming the vertical and horizontal relations between enterprises, as well as internal questions of governance. A pre-condition to achieve more efficient governance in forest economy is the reduction of restrictive institutions, whether formal or informal.

scholarly journals Gender and Transaction Costs in Crush-Pen Spraying for Trypanosomiasis Control in Kenya

2017 ◽  
Vol 9 (11) ◽  
pp. 144
Author(s):  
Jared Isaboke Mose
Keyword(s):  
Transaction Costs ◽  
Institutional Economics ◽  
Survey Design ◽  
Sampling Technique ◽  
Simple Random Sampling ◽  
New Institutional Economics ◽  
Tsetse Fly ◽  
Group Affiliation ◽  
Cross Sectional Survey ◽  
Cross Sectional

Trypanosomiasis a widespread constraint in livestock production, mixed farming and human health in Africa has necessitated development of several technologies to ameliorate the effects of the disease. However delivery of these technologies to farmers has been undertaken on trial and error basis without a proper strategy leading to more failure than success and wastage of scarce resources. The purpose of this paper was to carry out an analysis of transaction costs associated with the use of communal crushpen in tsetse fly and trypanosomiasis control among smallholder cattle farms in Busia County, Kenya. The study utilized cross-sectional survey design and was guided by the New Institutional Economics approach. Stratified and simple random sampling technique was adopted to get 211 respondents. Data was collected by use of structured questionnaires and analyzed using descriptive and inferential statistics. Conjoint results showed that price was the most important factor influencing the farmers’ decision for crushpen use, accounting for 55.58%; distance accounted for 20.7% while trust accounted for 14.6% and group affiliation 8.7%. It is recommended that crush pens should be close to farms, managed by trustworthy people preferably belonging to farmers’ groups and charges levied for spraying the cows should be within the reach of farmers. The necessity of developing affordable Tsetse fly and Trypanosomiasis control methods in the war against Tsetse and Trypanosomiasis is supported by this study.

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