Extension to the basic design of Transaction Cost Theory analysis

C. Ferro-Soto and M. Guisado-Tato

International Journal of Management Concepts and Philosophy, 2006, vol. 2, issue 2, 118-139

Abstract: Transaction Cost Theory (TCT) has been acknowledged as a valid tool for dealing with institutionalist decisions. However, it should be pointed out that the basic analysis layout put forward by Oliver E. Williamson shows certain limitations in its explanations of dynamic situations in both time and space. This lack of dynamism may be overcome by including new explanatory factors (socio-political-cultural factors) or reconsidering the treatment of certain basic premises of the Theory (unit of analysis). In our bid to surmount the static nature of TCT, the paper proposes a reflection on this analytic tool in order to identify the gaps generated by these limitations, and thus enables us to propose the required extensions or corrections. These modifications are inspired by the suggestions put forward by other disciplines, such as the Relational Exchange Theory (RET), the Institutional Isomorphism Theory (IIT), the Institutional Economic Theory (IET) or evolutionist theories.

Keywords: transaction cost theory; TCT; new institutional economics; dynamic neo-institutionalism; relational exchange theory; RET; institutional isomorphism theory; IIT; institutional economic theory; IET; evolutionist theories. (search for similar items in EconPapers)
Date: 2006
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