In the talk, he expressed his anger that many people misjudged him as an opponent against state intervention. But equally, there is no reason why, on occasion, such government administrative regulation should not lead to an improvement in economic efficiency. He stressed that it was clearly different from saying that government intervention was always undesirable. He speculated that his association with the University of Chicago might partly lead to this misinterpretation. Needless to say, I benefited tremendously from his talk.
All institutions are viable options.
More important, the examination must be done with the consideration of existing institutional environment within which the new system is going to be operated. Connections between Coase's idea of transaction costs and formalization While many scholars are trying to perfect the Coase Theorem, some economists, such as Douglass North, Oliver Williamson, Thrainn Eggertsson, and many others, are treating transaction costs as a focus of analysis. Simply put, their analytical framework places a paramount importance on the transaction costs and property rights. I think that this analytical framework is very relevant for studying formalization of informal sectors in developing countries. Let me explain why.