technology and transaction cost economics a reply abstract i argue here as i have previously that technology is neither fully determinative of nor irrelevant to economic organization transaction cost economizing occupies a prominent position in any effort to assess the efficacy of alternative forms of economic organization

the environment and emerging development issues development economics for the most part has failed to recognize renewable environmental resources as economic goods yet the lives of the poor in developing countries are intimately tied to the fate of their local common property resources soil fuel wood water and so on ignoring the loss of common property renewable resources via degradation centralization or privatization in calculations of net national product can mask the destruction of resources available to a country s poor behind the false appearance of a growing national economy this paper describes the difference between the problem of managing local common property resources in developing countries and the problem of protecting the global commons such as the atmosphere and oceans it outlines the calculations that would include the local commons in the national income accounting of capital assets and argues that the interests of those most dependent on the increasingly scarce local commons will be best served by placing control in their hands while the central government provides infrastructure and educational support to control the pollution of the global commons on the other hand the paper sketches a plan in which most countries would have a high incentive to participate a global allocation of limited tradable permits to discharge defined pollutants

cost sharing arrangements under sharecropping moral hazard incentive flexibility and risk this paper explains the rationale and describes the characteristics of cost sharing arrangements in rural developing economies focusing on the risk and incentive properties of alternative cost contracts and on their flexibility their ability to adapt to environmental changes it is shown that where labor inputs are difficult to monitor the rule that cost shares and output shares be equalized will not hold and is not constrained pareto efficient and that cost sharing contracts have a decided advantage over contracts which specify the level of inputs whenever there are asymmetries of information regarding production technology between the landlord and the tenant

evidence of slowing yield growth the example of swiss cereal yields we analyze trends in crop yields and yield variability of barley maize oats rye triticale and wheat in switzerland from 1961 to 2006 it shows that there have been linear increases in crop yields since the 1960s however yields of barley oats rye triticale and wheat have leveled off in switzerland since the early 1990s which contrasts linear trends in cereal yields that is usually assumed for europe we show a relationship between the introduction of agricultural policy measures towards environmentally friendly cereal production that fostered widespread adoption of extensive farming practices and the observed leveling off of crop yields thus this paper emphasizes that agricultural policy can be an important reason for slowing crop yield growth agricultural policy measures will be one of the key driving forces of future crop yields thus the potential leveling off of crop yields that is indicated in this study should be considered in analyses of future land use and food supply as well as in the evaluation of agri environmental measures and policy reforms

asset specificity and economic organization abstract this paper examines the optimization problem of firm and market organization in which both production cost and transaction cost differences are expressed as a function of asset specificity in general markets enjoy advantages by aggregating the demands of many buyers thereby realizing economies of scale or scope such production cost savings need to be assessed in relation to the transaction cost advantages that internal organization sometimes enjoys over markets in adapting to changed circumstances as it turns out both production cost economies and the transaction cost differences between firm and market organization vary systematically with the characteristics of the investments this paper employs a unified framework to assess the choice of organization form the condition of asset specificity is featured

resources transactions and rents managing value through interfirm collaborative relationships this paper offers a theoretical explanation for why interfirm collaborations form yet fail and further suggests how firms might manage them for a more positive outcome based on a perspective of value we explain how a more inclusive and integrative perspective one which combines elements from transaction costs and resource based theory provides more robust insight into collaboration formation management and instability in doing so we differentiate rent yielding firm specific assets at the core of the resource based view from the transaction specific assets at the core of transaction cost theory the paper makes a crucial distinction between the potential value attainable through collaborations and its actual realization the crux of our argument is that firms enter into collaborative relationships because these are expected to yield superior value relative to alternate organizational forms in certain situations offering potentially synergistic combinations of complementary resources and capabilities yet such relationships are frequently prone to failure because the partner firms tend not to recognize ex ante the nature and extent of transaction specific investment that is required in the collaborative relationship to attain these synergies in our argument critically the relationship between organizations is seen not simply as a governance structure of a hybrid nature but more importantly as a productive resource for value creation and realization in this light transaction specific investment in what we term relational specificity becomes imperative in the search for value we explain why the transaction costs incurred in the exchange of resources are not independent of the nature of resources to be transacted and similarly why the returns realized from these resources are not independent of the relationship and transaction specific expenditures incurred in effectively combining them and maintaining the combination the interdependence between the two mediated by the quality of the relationship has direct implications for the earning of rents through collaborations these relationship specific expenditures can be of an internally generated nature endogenous to the alliance form itself and need not exceed alternative forms while the associated benefits have the capacity to potentially exceed the alternatives this translates into potentially superior value the paper contributes in three key related ways a the explicit recognition of the relationship as a value bearing asset embedded in a larger and endogenous institutional context namely a system of resource relationships both intraorganizational and inter organizational among partner firms and the collaboration b the recognition of the evolving relationship between production and exchange which at the level of the collaboration is directly dependent on the nature evolution and dynamics of the relationship among the parties to the transaction and c the provision of a nontrust explanation for why firms might knowingly forego opportunities to take advantage of their partners drawing from this the paper occasions a a shift in focus from the form to the process of governance which has direct implications for value creation and realization and b a shift in the primary identity of transaction specific and relationship specific expenditures from cost to investment in future value

the organization of work a historical dimension abstract an evaluation of the organizational efficiencies of various modes of production by o e williamson has led him to conclude that given identical technologies the factory was more efficient than the putting out system the superior organizational efficiency of the former he maintains was one reason for the transition to factory production during the nineteenth century this paper challenges that view it is argued that the way in which williamson evaluates efficiency is open to methodological and other objections and that there is limited empirical support for his hypothesis given an identical technology the evidence suggests that the putting out system was usually able to compete with the factory

resource allocation and use under collective rights and labour management in peruvian coastal agriculture a critical issue in the evaluation of labour management as a development policy is its impact on production in an effort to contribute to that evaluation and to the economics of labour management this study analyses production data collected from cooperative firms established by the peruvian agrarian reform the data present an unusual opportunity for careful microeconomic analysis of the reform itself as well as an opportunity to confront and refine existing propositions about the effects of the collective property rights of labour management on production property rights may affect production because of their effort on incentives for conventional resource allocation decisions they may also affect intrafirm principal agent decisions which determine the intensity with which given resources are utilised beginning with ward s i 958 paper a number of theoretical studies have compared labour managed and capitalist resource allocation and an approximate consensus has emerged about conditions under which differences occur in this study measures of the allocative behaviour of peruvian firms are estimated and compared with the theoretically expected behaviour of both capitalist and peasant agricultural producers the impact of collective ownership on the intensity of resource utilisation i e technical efficiency of the observable production function arouses greater theoretical dispute than the resource allocation question a collective assignment of property rights may weaken supervisory authority which can control free rider externality problems within the production process on the other hand participation of labour in management may foster cooperative attitudes and other social control devices which can fulfill the same functions as hierarchical supervision existing literature offers the competing hypotheses that labour management leads either to a breakdown in intrafirm coordination and the observable technical efficiency of production as jensen and meckling i 979 claim or to an improvement as vanek i 969 claims the results of the present paper do not unequivocably support either view instead they portray a diversity in labour managed production performance and suggest the importance of policy and institutional factors which condition the impact of labour management on production the results also provide a

household contributions to community development in indonesia summary critical to the success of community development is the degree to which citizens contribute their resources the paper develops regression models to examine the effects of household and community characteristics on household contributions of time and money to three types of participatory community development efforts governance social welfare and environmental infrastructure households with indicators of lower socio economic status generally contributed less time and money to community development integration into social networks was also a strong predictor of the amount of time a household contributed because most of the community development efforts analyzed rely on reciprocity where participants contribute resources in order to receive benefits the findings raise doubts about the extent to which these efforts help the poor and socially excluded

designing payments for environmental services in theory and practice an overview of the issues abstract payments for environmental services pes have attracted increasing interest as a mechanism to translate external non market values of the environment into real financial incentives for local actors to provide environmental services es in this introductory paper we set the stage for the rest of this special issue of ecological economics by reviewing the main issues arising in pes design and implementation and discussing these in the light of environmental economics we start with a discussion of pes definition and scope we proceed to review some of the principal dimensions and design characteristics of pes programs and then analyze how pes compares to alternative policy instruments finally we examine in detail two important aspects of pes programs their effectiveness and their distributional implications pes is not a silver bullet that can be used to address any environmental problem but a tool tailored to address a specific set of problems those in which ecosystems are mismanaged because many of their benefits are externalities from the perspective of ecosystem managers pes is based on the beneficiary pays rather than the polluter pays principle and as such is attractive in settings where es providers are poor marginalized landholders or powerful groups of actors an important distinction within pes is between user financed pes in which the buyers are the users of the es and government financed pes in which the buyers are others typically the government acting on behalf of es users in practice pes programs differ in the type and scale of es demand the payment source the type of activity paid for the performance measure used as well as the payment mode and amount the effectiveness and efficiency of pes depends crucially on program design

agrarian reform in the dominican republic an associative solution to the collective individual dilemma abstract the dilemma of appropriate organizational structure for agrarian reform projects is pervasive in all of latin america collectives or production cooperatives provide superior vehicles for necessary credit and technical assistance but unlikely family plots they are wrought with administrative problems and low worker incentive this case study of land reform projects in the dominican republic presents the limitations of collective and individual farming structures and characterizes an intermediate associative preferred by the dominican reform beneficiaries empirical evidence shows higher productivity as the reform projects adopt the associative structure

the efficiency of alternative policies for the ec s common agricultural policy comment in a recent article in this journal de gorter and meilke dgm compare the redistributive efficiency of agricultural price support policies under alternative assumptions about accompanying supply control measures using a long run supply curve which is assumed invariant with respect to policy choice dgm assess the consumer taxpayer cost per ecu of total producer surplus under different policies and conclude that individual production quotas followed closely by a two tier price policy are preferable to price reductions or a coresponsibility levy the main substance of this note is that dgm s failure to recognize the underlying structural problems of ec agriculture and to identify the true political target of income support measures renders their approach incapable of yielding a determinate ranking of these measures in terms of their medium term efficiency and invalidates their policy recommenda

common property institutions and sustainable governance of resources abstract the literature on common property based resource management comprises many important studies that seek to specify the conditions under which groups of users will self organize and sustainably govern resources upon which they depend using three of the more comprehensive such studies and with an extensive review of writings on the commons this paper demonstrates that the enterprise of generating lists of conditions under which commons are governed sustainably is a flawed and impossibly costly research task for a way out the paper examines the relative merits of statistical comparative and case study approaches to studying the commons it ends with a plea for careful research design and sample selection construction of causal mechanisms and a shift toward comparative and statistical rather than single case analyses such steps are necessary for a coherent empirically relevant theory of the commons

the firm size farm size and transaction costs the case of hazelnut farms in turkey this study analyzes the effects of transaction costs on the size of hazelnut farms in turkey the study finds that higher land slope and higher variance of rain as transaction cost increasing natural effects lead to smaller hazelnut land holdings high slope and weather variation can increase the costs of monitoring the laborers make moving inputs or output up and down harder limit the use of machinery and reduce contractual performance of labor contracts for farm production functions land is a complex input with measurable interactions with nature contrary to common production theory approaches that take natural properties of land as given the study develops a production function that incorporates natural properties such as slope and rain variance the study utilizes two separate data sets for the estimations the first data set explores the characteristics of hazelnut farmers while the second one analyzes the regional characteristics of hazelnut farms

prices technology and farm size in this paper we construct and empirically test a theory of the agricultural firm which explains the long term growth in farm size in the united states typically the u s farm unit is a family enterprise consequently the ratio of the opportunity cost of farm labor to the price of machinery services determines the size of the farm operation by influencing the machine labor ratio applying the model to u s data we explain virtually all of the growth in the machine labor ratio and in farm size over the 1930 70 period by changes in relative factor prices without reference to technological change or economies of scale

common property equality and development the appeal of common property ideas may be traced in large measure to the fact that they seem to embody widely held values of equality on the other hand empirical examination of common property institutions reveals that they can coexist with significant inequality in this paper the relationship between common property and equality is examined it is argued that the role of common property can only be understood in the context of the associated private property institutions common property in agriculture is interpreted as part of a system based on small scale peasant proprietorship of arable land common property institutions provide a method of capturing scale economies and thereby increasing the efficiency of small scale proprietorship in competition with large scale production based on wage labor

death rates life expentancy and china s economic reforms a critique of a k sen abstract sen s recent work has emphasized the ineffectiveness of economic growth in achieving fundamentally important human ends here his influential propositions concerning post mao china are assessed factors affecting mortality rates and life expectancy in china since the mid 1970s are discussed in section 2 in section 3 it is shown that contrary to his claims post mao china achieved a widespread decline in death rates an improvement in life expectancy and a reduction in the number of people living in absolute poverty the poorest rural households were not excluded from the benefits of rapid growth of output after the reforms

quality variations and the choice between foreign and indigenous goods or technology abstract in this paper different production techniques are distinguished by both their resource requirements and the quality of their outputs the optimal choice of production methods depends upon demand conditions as well as the economy s capital labor endowment and the technical characteristics of the alternatives when product quality improvement is possible through the adoption of a foreign advanced capital intensive technique at most two techniques should be employed and the more closely matched are the capital labor requirement of the advanced method and the aggregate capital labor ratio the greater the extent of adoption the presence of a competing quality improving activity using the indigenous technology reduces the range of aggregate capital labor endowments for which the advanced technique should be employed we consider quality inspection of units which reduces the amount of tradable output produced by given inputs as its market value increases economies of scale in that the per unit cost of a given quality improvement falls with increasing sectoral output are included

wealth based trust and the development of collective action interpersonal trust is one possible mechanism by which wealth inequality affects the success of efforts in cooperation specifically the presence of perceived economic differences between members of small agricultural cooperatives in northwest ecuador s agricultural frontier encourages trust in the wealthy thus facilitating co op development during the initial stage of cooperative formation but such inequality and exclusive trust may later negatively affect co op success these generalizations are only possible through refinement of frameworks currently used in the study of heterogeneity and common pool resource management this refinement is made possible by paying closer attention to the operationalization of variables and by synthesizing already existing hypotheses

agency costs and the agricultural firm in the last decade there has been a major rekindling of interest among economists in the form of institutions used to organize resources for production and distribution jensen 1983 distinguishes two agency literatures that share the comparative institutions perspective introduced by coase 1937 1960 principal agency theory e g stiglitz 1975 harris and raviv 1978 shavell 1979 h61mstrom 1979 lewis 1980 provides a mathematical formulation of contractual choice and has been primarily directed to the trade off between risksharing and incentives against labor shirking positive agency theory pioneered by coase 1937 resurrected by alchian and demsetz 1972 and currently represented for example by fama and jensen 1983a is nonmathematical and places relatively more emphasis on explaining actual patterns that characterize industrial organization in agriculture the theory of organizational form has centered largely around tenure choice the theory of tenure choice has an illustrious history in the economics literature e g smith 1922 marshall 1920 heady 1955 day 1967 cheung 1969 rao 1971 stiglitz 1974 reid 1976 newbery and stiglitz 1979 binswanger and rosenzweig 1984 in recent years alternative tenancy arrangements are commonly viewed as types of employment contracts e g newbery and stiglitz 1979 braverman and stiglitz 1975 harris and raviv 1978 shavell 1979 hw1mstrom 1979 lewis 1980 in an innovative departure from the view of tenancy as an employment contract eswaran and kotwal 1985 have modelled share tenancy as a partnership between a landowner who specializes in decision making and a tenant who specializes in labor supervision more generally questions of tenure choice employment contracts manag ment systems and farm size can all be usefully viewed as aspects of agricultural organization the purpose of the present paper i to elucidate this view and to investigate tenure choice as a part of the general study of the nature and causes of the agricultural firm the paper is organized to highlight the inductive approach employed section 2 classiies agricultural firms according to the degree of specialization and who gets the residual payment the classification is combined with previously documented patterns of tenure choice in order to posit a preliminary hypothesi about the relationship between the econo ic environment and the nature of the agricultural firm section 3 uses a principalagency framework to construct a theory of the hypothesized relationship between the degree of separation between labor and management nd l nd quality section 4 provides an illustrative statistical verification of the hypothesis based on a sample of philippine sugarcane f rms section 5 summarizes the paper and discusses two implications of the transaction cost approach for institutional design

household resources transaction costs and adjustment through land tenancy this paper examines the role of household endowments of imperfectly tradeable factors of production e g male female child labor and draft animals on land leasing an explicit attempt is made to account and test for the role of transaction costs on the incidence and extent of adjustment taking place through the land lease market the econometric model is implemented using pooled data from six villages in the semiarid region of india the results confirm the significant role of nontradeable family endowments and indicate the presence of frictions in the land tenancy market

the ideology of efficiency searching for a theory of policy analysis the potential pareto improvement criterion and other measures of economic efficiency do not pass the test of consistency and coherence within economic theory nor do such measures accord with what public decision makers seek in policy advice from economists such efficiency measures are nonetheless durable components of the ideology of economics in general and benefit cost analysis in particular the objectivity of the policy scientist has been confused with the objectivity of the science while economic efficiency has no claim to objectivity the policy scientist can be an objective analyst of policy choices

a modified collective agriculture in rural growth with equity reconsidering the private unimodal solution abstract this paper identifies limitations of an agricultural structure of small private farms as a basis for rural growth with distributive equity and points out potential advantages of democratically managed collectives characterized by flexibility with respect to production scale group checks on inequality in land use and avoidance of the underemployment generating tendencies of large scale non collective agriculture after a critique of recent literature on scale economies and a discussion of stratification tendencies in private agriculture a model of democratic rural collectives incorporating features of chinese and tanzanian precedents is introduced and evaluated political feasibility is considered in a concluding discussion

incumbents use of pre entry alliances before expansion into new technical subfields of an industry industry incumbents frequently delay entry into emerging technical subfields fearing product cannibalization and uncertain investment and enter only after technical and market uncertainties have subsided we predict that many incumbents particularly stronger firms will participate in alliances with other firms before their standalone entry the alliances will be used to realize part of the value of specialized assets and to gain information about the emerging products and markets we support the predictions with evidence from the us market of the medical diagnostic imaging industry

communal property and land markets agricultural development policy in st lucia abstract communal land tenure in st lucia was targeted for privatization in 1986 on the premise that its undercapitalization and low productivity could be corrected by establishing an efficient land market this article takes the neoclassical analysis which was used to support this policy to task with empirical evidence from st lucia it argues that the inefficiencies attributed to communal land only are not justified many of these inefficiencies are in fact also shared with freehold tenure in addition family land performs socioeconomic functions that cannot be achieved with freehold tenure and fulfills a critical function in the development process

scattered landholdings in common property systems abstract concepts of common property have received increasing attention in recent years this has been associated with a re evaluation of historical common property institutions such as the medieval commons one of the major problems raised in the process has been the need to explain the phenomenon of scattering of a farmer s landholdings into a number of separate strips an explanation is sought in the need for a smoothly operating collective decision process scattering is seen as a means by which intra group conflict can be minimized other aspects of the problem such as externalities are also examined

towards an appraisal of the impact of rural reform in china 1978 85 china s economic institutions have been radically transformed since 1978 the most dramatic changes have been in the countryside where a virtual de collectivisation has taken place see nolan 1983 with profound direct effects on the 800 million rural dwellers as well as important implications for china s 200 odd million urban population 1 the significance of these changes goes beyond china s boundaries their self evident success in stimulating output growth must lead to a wide ranging reassessment of the appropriateness of collective institutions in agriculture it is no surprise that a delegation of soviet economists in china early in 1985 showed special interest in the agricultural reforms in contemporary china official policy changes so fast as to render obsolete any appraisal of their prospective consequences and to make forecasts somewhat akin to astrology and given the severely incomplete while rapidly improving statistical base analysis of the past still borders on archaeology nonetheless evidence from a wide range of sources both official and informal as well as written oral and visual is sufficient to construct a reasonably comprehensive picture of the impact of the agricultural reforms of 1978 83 this article examines two main issues the first section looks at some important indicators of the performance of the rural economy and considers some of the main factors that have affected it the second section examines the impact of the reforms on inequality and poverty in the countryside

the nature of the agricultural firm abstract models explaining the choice between rent wage and share contracts in agriculture abstract from the large variations within the classes of rent share and owner managed forms of organization regarding the extent to which a specific form accommodates specialization between labor and management as a result modern explanations of agricultural organizations are misleadingly dependent on risk aversion or the assumption that landowners have an absolute advantage in production decisions viewing the agricultural firm as a constitution instead of as a nexus of contracts facilitates an agency explanation of alternative organizational forms and their amenability to specialization

contractual structure in agriculture abstract this paper develops a generalized double sided moral hazard model of contract choice in agricultural production with mutual monitoring of each other by the landlord and the tiller who generally have different levels of farming efficiency and are risk averse using this model we formally prove that the optimal contract maximizes the output net of the risk bearing and agency costs of both the parties and carry out a simulation exercise which helps explain many of the tenancy related issues the difference in the farming efficiency of the two sides often ignored in previous analysis turns out to be the principal determinant of the contract offered to a tiller

social heterogeneity and wasteful lobbying using a general equilibrium model with endogenous policy we explore how heterogeneity affects wasteful lobbying by sectoral interest groups with the help of a simulation approach we first investigate the impact of information heterogeneity on how lobbies react to a shift from a soft to a strict government budget constraint next we examine how lobbying is influenced by heterogenous perception of the general equilibrium implications of lobbying effort finally we explore the consequences of heterogenous specialization in households asset portfolios we conclude that social heterogeneity in information perceptions and portfolio compositions increases incentives to lobby

revenue neutral tax policies under price uncertainty reply in their comment on my 1990 article yeh suwanakul and mai extend my analysis which focused attention exclusively on firm output to allow for simultaneous endogeneity of price aggregate output and numbers of firms they show that with downward sloping demand industry output adjusts positively to revenue neutral changes in the marginal rate of taxation this result is significant for two reasons first we are more often interested in predictions about aggregate phenomena than we are in predictions about individual firms indeed firm level predictions are frequently irrefutable since firm data are often unavailable second the authors derive their result under a set of conditions that appear to be more general than those invoked in my 1990 article in particular they circumvent the need to invoke specific assumptions about the nature of firms aversions toward risk i consider this a useful extension and i appreciate the careful scrutiny of my paper

r d cooperation between firms a perceived transaction cost perspective transaction cost is considered as an explanatory variable for the choice between markets and various organizational arrangements for performing some predefined tasks such as engaging in private r d with respect to r d cooperation between firms we show that the perception of high transaction cost is related to certain characteristics of the firm and to the type of r d task we also show a relationship between the perception of transaction cost and the perceived success of the cooperation the analysis sheds light on various determinants of transaction costs

returns to scale generated from uncertainty and complementarity abstract a choice theoretic model of capital production which generates u shaped long run average cost curves is presented increasing returns to scale are not caused by indivisibilities and decreasing returns to scale by a fixed factor uncertainty and complementarity lead to increasing returns in durability which leads to the decline in long run average costs production generates an integrated capital system comprising capital components each component is complementarity with the others and uncertainty with respect to component durability exists diminishing returns occur because capital services must be extracted through time and the time cost of deferred consumption eventually dominates the increasing returns

economic implications of inalienable and communal native title the case of wik forestry in australia abstract wik people on cape york peninsula in queensland australia have been granted native title over 18 500 km2 of customary land this was seen as a coup by wik people and it appears that they have a relatively unencumbered right to manage a large proportion of this land including for commercial timber production however economists of the private property rights tradition are of the view that the inalienable and communal nature of native title presents an obstacle to economic development in remote indigenous communities that will prevent the land from being managed in an economically and ecologically efficient manner and preclude the land from realising its full market value this negative view has risen to prominence in australia and privatisation of the indigenous land estate is being debated in this paper it is argued that privatising australian native title land will not suddenly provide conditions where indigenous enterprise will flourish nor will it necessarily maximise resource use efficiency where cultural and ecological values are important for the wik and other indigenous australians factors such as their low western education and skill levels poor health limited financial resources complex social environment the remoteness and low productive capacity of their land and the high importance of non pecuniary land management objectives are more important impediments to economic development than the broad type of property right held over natural resources

strategic integration of hospitals and physicians a striking development in the healthcare market place has been the formation of strategic relationships between hospitals and physicians hospital physician integration appears to be a response to rapidly expanding managed care health insurance we examine whether integration lead to efficiency gains from transaction cost economies thereby allowing providers to offer managed care insurance plans lower prices or whether integration is really a strategy to improve bargaining power and thereby increase prices we find that integration has little effect on efficiency but is associated with an increase in prices especially when the integrated organization is exclusive and occurs in less competitive markets

common property in agricultural production the determination of the property rights structure in agriculture and particularly the role of common property may be viewed as a problem in industrial organization the analysis will focus on the determination of the efficient property rights structure in a multi output technology characterized by economies of scale and scope but also including outputs for which technology is essentially linear given an appropriate analysis of transactions costs common property may be shown to be an efficient alternative to systems based purely on small scale or large scale private property

governance and uncertainty the trade off between administrative control and commitment this study elaborates upon the motives for initiating equity based collaborations vs acquisition of another firm already having a desired technology we characterize both minority direct investments and joint ventures as options to defer either internal development or acquisition of a target firm in domains where learning about growth opportunities dominates investment activity this incremental mode of governance economizes on the cost of committing resources to a technology with an uncertain value using a sample of 402 transactions in the biotechnology industry we find strong support for the theoretical model the findings suggest that the cost of commitment in the face of technological uncertainty may offset the administrative benefits of hierarchical governance 1998 john wiley sons ltd

choosing rules to govern the commons a model with evidence from mexico abstract i develop a model to assess distributive rules observed in field data on 48 mexican farmer managed irrigation systems households decide whether to contribute maintenance effort the aggregate amount of which affects the level of output distributive rules with congruence between the sharing of collective costs and benefits elicit the highest level of effort empirically however incongruent rules dominate the surveyed systems i argue that transaction costs offset some efficiency benefits of congruent rules i estimate a model of rule choice inequality and the age of the water users association strongly increase the likelihood that a system chooses proportional water allocation

technology and oliver williamson s transaction cost economics abstract oliver williamson has greatly contributed to refining neoclassical economics by incorporating transaction costs and internal organization yet his new institutional economics too easily dismisses the role of technology in doing so he has replaced the determinism of technological production efficiencies with the determinism of transaction cost efficiencies a review shows that williamson s new institutionalism has evolved through three stages in terms of the focus of his analysis and his views of transactions throughout this evolution however his proposed solutions to organizational failures have actually continued to rely heavily upon technology

rural industrialization an engine of prosperity in postreform rural china abstract the postreform period post 1978 in china has been marked by very sharp increases in both income and consumption of peasant households such sustained high growth over a period of more than a decade is impressive by any standard the fast growing rural industries acted as the engine of prosperity achieved by the peasant households of china during this period with very high rates of growth achieved by such industries the emergence and rapid growth of private enterprises and institutional changes that took place in methods of recruitment and payment of wages in collectively owned industries rural industries as a whole became an important source of income for peasant households in addition to the direct contribution these industries played an important role in fostering the growth of agriculture e g by providing funds for social investment in irrigation and by facilitating farm mechanization and the use of fertilizers and thus made a valuable indirect contribution to peasant income

transaction costs risk aversion and the choice of contractual arrangements publisher summary this chapter discusses transaction costs risk aversion and the choice of contractual arrangements every transaction involves a contract and the transactions conducted in the marketplace entail outright or partial transfers of property rights among individual contracting parties the contractual arrangements through which these transfers are negotiated are several and varied the chapter presents a theory that states that economic efficiency is the same under various land tenure arrangements subject to the constraint of private property rights although transaction costs exist in the real world the theory enables the understanding of much of the farming behavior however the presence of a variety of contractual arrangements under the same constraint of competition poses the question of the choice of these arrangements if a firm can increase efficiency in production by employing productive resources of more than one resource owner a contract to combine the resources will be obtained the formation of the contract involves partial transfers of property rights in one form or another such as leasing hiring or mortgaging

cost functions under production uncertainty we characterize the cost functions which would be consistent with expected utility maximization when production is uncertain it is not generally possible assuming risk aversion to use only expected output as the constraint in a cost minimization problem in some leading cases cost functions consistent with expected utility maximization are particularly useful because they are devoid of risk preferences

is farming a constant cost industry measurement of cost size relationships for farming has long been an important area of research in agricultural economics much of this research has had a farm management and production economics orientation and firm industry interdependencies have often been ignored research results stemming from such an orientation should be interpreted with care when used for policy purposes pecuniary externalities may be of greater importance than indicated by research to this time a suggestion is made for treating induced technical change as comparable to a pecuniary externality questions are raised on both theoretical and empirical grounds whether farming in the united states should be considered a constant cost industry for policy purposes

a translog cost function analysis of u s agriculture 1939 77 over the past four decades major changes have occurred in u s agriculture a new era in agricultural production in the united states began in 1939 world war ii gave a boost to agriculture still bogged in the depression productivity increases over the period 1939 77 have been quite impressive measured crudely by the ratio of the indices of output and input the productivity index 1967 100 increased from 59 in 1939 to 119 in 1977 to study this phenomenon a multi input translog cost function incorporating hicks neutral technical change hntc was specified annual timeseries data for the united states was used to estimate the model neoclassical duality theory provides an approach for computing the pairwise elasticities of substitution between inputs for each year as well as the annual own and cross price elasticities of demand for inputs

organising for socio ecological resilience the roles of the mountain farmer cooperative genossenschaft gran alpin in graubunden switzerland risks are increasing for agriculture particularly for marginal systems like the cereal production systems of the swiss alps the article critically examines the outcomes of innovative governance responses to socio ecological risk through an analysis of the roles of the cooperative organisation genossenschaft gran alpin according to the perceptions of its farmer members gran alpin provides a secure premium price for cereal producers in graubunden linked to the uniqueness of local organic mountain cropping systems and all the values of local identity landscape stewardship biodiversity conservation and regional development that such systems represent gran alpin is enabling an alternative approach for rural development to evolve around key elements including high quality breads pastas flours and beer the mountains the extreme production system organic production and animal welfare landscapes aesthetics in a core tourism region and the cooperation of like minded farmers resilience within the socio ecological system is enhanced as the cooperative exploits evolving forms of collaboration market niches and private and public governance relationships to respond implicitly and explicitly to agro ecological economic and political risks

management response to the demands of global fresh fruit markets rewarding harvesters with financial incentives abstract competition in global fresh fruit markets is now much more intense than a decade ago producers and exporters face an increasing number of quality requirements and regulations that are costly and challenge established practices paying harvesters by the amount they harvest and trying to control quality with sanctions based on a field study this article discusses how lemon producers in northern argentina are responding to these challenges why some have responded only by introducing non contractual innovations while others by rewarding harvesters for careful performance to insure fruit quality the findings elucidate arguments about the instrumentality of transaction costs on the choice of both managerial practices and forms of remunerating labourers it also illustrates that added quality demands of foreign markets eased the task of harvesters but had a varying effect on labourers income

theoretical isolation and explanatory progress transaction cost economics and the dynamics of dispute two related goals are pursued first the development of and debates around oliver williamson s version of transaction cost economics are organised in terms of an emerging metatheoretical framework it proposes looking at economic theorising and its changes in terms of rival theoretical isolations which are often responses to challenging explanatory questions as a side product williamson s strategy of theorising is portrayed second using transaction cost economics as an illustration and as a source of inspiration the paper amends and refines the earlier framework of theoretical isolation by incorporating notions of explaining and explained items notions of progress in questions as well as increased causal penetration and increased degree of unification and the notion of the dynamics of dispute copyright 2004 oxford university press