Governing structural change and externalities in agriculture: toward a normative institutional economics of rural development

Martin Petrick

No 73, IAMO Discussion Papers from Leibniz Institute of Agricultural Development in Transition Economies (IAMO)

Abstract: The paper aims at a conceptual contribution to the normative economic analysis of rural de-velopment (RD) policies. RD is regarded as a problem of interaction between individuals; (lacking) structural change or the (missing) integration of externalities are therefore recon-structed as coordination rather than allocation problems. A social dilemma is taken as the paradigmatic core of normative institutional economics: how can potential gains from coop-eration be realised by way of institutional policy? Starting from a critique of the hitherto dominating welfare economics conception, three principles for institutional policy are de-rived: (1) the realisation of gains from cooperation as the normative, regulative idea, (2) in-centive-compatible self-regulation as the principle of individual action, and (3) institutional-ised competition as the institution-related principle. An application to rural credit markets demonstrates how these principles can be used to structure institutional policy of RD.

Keywords: rural development; institutional economics; welfare economics; social dilemma; ländliche Entwicklung; Institutionenökonomik; Wohlfahrtsökonomik; soziales Dilemma. (search for similar items in EconPapers)
JEL-codes: D63 D74 Q18 Q58 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: GOVERNING STRUCTURAL CHANGE AND EXTERNALITIES IN AGRICULTURE: TOWARD A NORMATIVE INSTITUTIONAL ECONOMICS OF RURAL DEVELOPMENT (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iamodp:14878

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