New Institutional Economics: Transaction Cost Theory and Agency Theory

2017 ◽  
pp. 167-192
Author(s):  
Mehmet Barca
Keyword(s):  
Agency Theory ◽  
Transaction Cost ◽  
Institutional Economics ◽  
New Institutional Economics ◽  
Transaction Cost Theory

scholarly journals Transaction Costs in Planning Literature: A Systematic Review

2021 ◽  
pp. 088541222110620
Author(s):  
Sina Shahab
Keyword(s):  
Systematic Review ◽  
Transaction Costs ◽  
Transaction Cost ◽  
Institutional Economics ◽  
Empirical Studies ◽  
New Institutional Economics ◽  
Transaction Cost Theory ◽  
Planning Systems

“Transaction costs,” as a well-established theory in New Institutional Economics, has been used to explain and analyze various planning matters for about 30 years since its introduction to planning literature. However, there is no study on how planning-related studies have utilized the theory. This paper conducts a systematic review that aims to develop a better understanding of how transaction-cost theory is used in planning literature. The review shows that while potential contributions and implications of transaction costs have been conceptually discussed in planning literature, the empirical studies have remained limited, particularly concerning the magnitude of such costs in planning systems.

scholarly journals Illuminating the formal–informal dichotomy in land development on the basis of transaction cost theory

2018 ◽  
Vol 18 (1) ◽  
pp. 100-121 ◽  
Author(s):  
Hassan Darabi ◽  
Danon Jalali
Keyword(s):  
Transaction Costs ◽  
Transaction Cost ◽  
Institutional Economics ◽  
Land Development ◽  
New Institutional Economics ◽  
Institutional Framework ◽  
Transaction Cost Theory ◽  
Financial Return ◽  
Partial Ownership ◽  
Informal Development

Transaction cost theory is largely used to investigate the formal domain of land and housing. In the informal domain, however, this perspective has been employed largely as a supplement in addressing the other fundamental notion in new institutional economics—property rights—despite the possibility that informality in land development can emerge regardless of the informality or formality of such rights. To cover this gap, this study developed a theoretical framework based on transaction cost theory to explain the formal–informal dichotomy in land development. The proposed framework maintains that land development depends on engaging in transactions that involve total or partial ownership of a combination of capital and land through lease and/or sale contracts, which enable landowners to earn from the new rental prices produced by the increase in land prices. Landowners are afforded two avenues from which to reduce transaction costs, namely, formal and informal institutional frameworks, each defining and enforcing restrictive rules on agents’ actions. These avenues, however, are simultaneously a source of new transaction costs that can affect the expected financial return of land development. Landowners therefore tend to choose the institutional framework that entails lower transaction costs but enables higher gains. Thus, the higher transaction costs associated with a formal institutional framework are the primary deterrents to the selection of this structure. In turn, informal land development continues to expand, regardless of the existence of formal prohibitive measures. We investigated the formal–informal dichotomy in the rural land development process in Tehran Province, Iran. The results indicated that transaction costs cause inefficiency in formal institutions, thereby driving the perpetuation of informal development.

scholarly journals Reform of Compulsory Education Teachers’ Communication System from the Perspective of New Institutional Economics

2016 ◽  
Vol 4 (7) ◽  
pp. 176-183
Author(s):  
Liang Chen
Keyword(s):  
Institutional Economics ◽  
Compulsory Education ◽  
State Theory ◽  
New Institutional Economics ◽  
Transaction Cost Theory ◽  
Exchange System ◽  
Education Teacher ◽  
Property Rights Theory ◽  
Theory State ◽  
Teacher Exchange

According to the four main theory of transaction cost theory, property rights theory, state theory and the theory of institutional change from the new institutional economics, this paper gives a theoretical analysis about our country’s compulsory education teacher exchange system and puts for ward the reform path of the system.

Oliver E. Williamson,

2016 ◽  
Author(s):  
Andrew B. Whitford
Keyword(s):  
Transaction Cost ◽  
Critical Analysis ◽  
Institutional Economics ◽  
Transaction Cost Economics ◽  
Antitrust Policy ◽  
New Institutional Economics ◽  
Policy Analysts ◽  
The Impact ◽  
First Time

This chapter comments on Oliver Williamson’s 1975 book,Markets and Hierarchies: Analysis and Antitrust Implications, a critical analysis of how firms operate in markets. Williamson describes a new way of understanding markets and hierarchies by using the term “New Institutional Economics” for the first time. This chapter examines Williamson’s approach and the impact of his book, first by discussing his arguments about markets and hierarchies in relation to what policy analysts sometimes call “the politics of ideas”. It then considers Williamson’s particular interest in antitrust policy as well as his thesis about transaction cost economics. Finally, it evaluates the implications of Williamson’s research for the long-term development of a politics of ideas about firms in markets.

scholarly journals THEORY OF CONTRACTS IN THE LIGHT OF NEW INSTITUTIONAL ECONOMICS. THE SPECIFICITY OF AGRICULTURAL CONTRACTS

2018 ◽  
Vol 17 (4) ◽  
pp. 97-104
Author(s):  
Marzena Lemanowicz
Keyword(s):  
Economic Theory ◽  
Transaction Costs ◽  
Transaction Cost ◽  
Institutional Economics ◽  
Agricultural Sector ◽  
Transaction Cost Economics ◽  
New Institutional Economics ◽  
Economic Literature ◽  
Contract Signing

The article reviews Polish and foreign economic literature regarding new institutional economics (NIE) and various research approaches used in the framework of NIE. Particular attention was paid to the economic theory of contracts and the transaction costs, as the limitation of transaction costs is indeed the main stimulus for contract signing. Special attention was given to agricultural contracts and their specificity. The article discusses different theories applied in the analysis of contracts, characterizes contracts according to different criteria, and draws attention to the importance of transaction costs in the theory of contracts. In addition, factors which contribute to these costs have been identified, indicating the necessity of adapting the principles of transaction cost economics to the needs of the agricultural sector.

New Institutional Economics

2020 ◽  
pp. 102-124
Author(s):  
Barak Richman
Keyword(s):  
Twentieth Century ◽  
Transaction Cost ◽  
Real World ◽  
Institutional Economics ◽  
Transaction Cost Economics ◽  
New Institutional Economics ◽  
Production Functions ◽  
Governance Structures ◽  
Intellectual Traditions ◽  
Micro Level

This chapter assesses New Institutional Economics (NIE). It begins by describing the author’s own understanding of the New Private Law (NPL). The chapter then provides a brief introduction to NIE and its intersection with the study of legal doctrines and institutions. NIE’s roots extend—at least—to Ronald Coase’s famous 1937 article, “The Nature of the Firm,” and more likely to the writings of nineteenth- and early twentieth-century political economists. These intellectual traditions have shaped what is now known as NIE into two distinct branches. The first branch examines institutions as “humanly designed constraints that structure political, social, and economic interactions.” The second branch of NIE focuses on more micro-level behavior. Called “the governance branch” and operationalized by transaction cost economics, the foundational idea is to describe firms not in neoclassical terms as production functions, but in organizational terms as governance structures. The chapter explains how both NPL and NIE exhibit the hallmarks of interdisciplinary, scholarly pluralism, and an inquisitive focus on real-world, tractable problems. It concludes with some thoughts about the future of NPL and, in particular, the lessons it can take from NIE’s successes.

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