 MARKET INSTITUTIONS, TRANSACTION COSTS, AND SOCIAL CAPITAL IN THE ETHIOPIAN GRAIN MARKETEleni Z. Gabre-Madhin No 16540, Research Reports from CGIAR, International Food Policy Research Institute (IFPRI) Abstract: This report addresses the overarching question regarding the role of institutions in enhancing market development following market reforms. It uses the New Institutional Economics framework to empirically analyze the role of a specific market institution, that of brokers acting as intermediaries to match traders in the Ethiopian grain market in reducing the transaction costs of search faced by traders. Brokers play a key role in facilitating exchange in a weak marketing environment where limited public market information, the lack of grain standardization, oral contracts, and weak legal enforcement of contracts increase the risk of contract failure. Relying on primary data, it analyzes traders' microeconomic behavior, social capital, the nature and extent of their transaction costs, and the norms and rules governing the relationship between brokers and traders. The study uses an innovative approach to quantify the costs of search and demonstrates that the brokerage institution is economically efficient both for individual traders and for global economic welfare. Keywords: Institutional; and; Behavioral; Economics (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ags:iffp21:16540 Access Statistics for this paper More papers in Research Reports from CGIAR, International Food Policy Research Institute (IFPRI) Contact information at EDIRC. |
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