On the ‘Efficient Boundaries of the State’: The Contribution of Transaction-Costs Economics to the Analysis of Decentralization and Devolution in Natural Resource Management

Regina Birner () and Heidi Wittmer
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Heidi Wittmer: UFZ-Center for Environmental Research Leipzig-Halle, Permoser Strasse 15, D-04318 Leipzig, Germany

Environment and Planning C, 2004, vol. 22, issue 5, 667-685

Abstract: Decentralization and devolution—also referred to as ‘rolling back the boundaries of the state’—are important policy trends in natural resource management. Drawing a parallel with the efficient-boundary problem in industrial organization, the authors show how transaction-costs economics can be applied to identify the efficient boundaries of the state in natural resource management. The following extensions of the transaction-cost framework are proposed: (1) introduction of care intensity and contest intensity as additional key attributes of transactions; (2) introduction of cooperative types of organization as a third governance structure besides market and hierarchies; and (3) introduction of natural resource characteristics, social capital, and state capability as contextual variables. The authors also discuss the possibilities for empirical application.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:22:y:2004:i:5:p:667-685

DOI: 10.1068/c03101s

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