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Transaction Costs and Problems in the Development of the Mineral and Raw-Material Base of the Resource Region

I. Glazyrina and S. Lavlinskii
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I. Glazyrina: Institute of Natural Resources, Ecology and Cryology SB RAS, Chita, Russia
S. Lavlinskii: Sobolev Institute of Mathematics, Novosibirsk, Russia

Journal of the New Economic Association, 2018, vol. 38, issue 2, 121-143

Abstract: The article examines the mechanism of cooperation between the state and the private investor in the process of development of mining sector of the region with a low level of developing the production infrastructure. Under this mechanism, the government provides assistance to the investor not only in infrastructure but also in the implementation of the required environmental protection measures. To assess the impact of transaction costs (TC) on the productivity of such cooperation from the point of view of efficiency of the dividing of natural resource rent authors design special tools on the basis of the model of Stackelberg. A model test site is constructed to demonstrate the capabilities of the approach. The actual data of the model test site capture the specificity of the modeled object and make possible a practical study of the properties of the Stackelberg equilibrium. The methodology is based on analyzing the sensitivity of the solutions of the corresponding bilevel Boolean programming problem to changes in the basic parameters of the model. To raise the efficiency of cooperation mechanism with rent-seeking investor and fair sharing of rent this article suggests some steps that can significantly improve state institutions and reduce the level of TC both for the state and a private investor.

Keywords: cooperation mechanisms of the state and investor; sharing of natural-resource rents; model of Stackelberg (search for similar items in EconPapers)
JEL-codes: C6 Q32 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:nea:journl:y:2018:i:38:p:121-143