Transaction Cost and Environmental Economics: Towards a New Approach

Abstract

From p. 3: "First, I will discuss the different impacts of Coase's 1937 and 1960 papers. I will argue that although the papers share the same argument and the same message, they differ significantly in the way in which they approach the central problem of economic organization. This is one part of my argument. The second part is that different scholars, namely George J. Stigler and Oliver E. Williamson, picked up the central argument and created some kind of path dependencies in economic thinking. Third, I will highlight on the impact of Oliver E. Williamson in the development of Transaction Cost Economics. I will address the question, why this approach has been so influential in industrial organization. I argue that there are mainly two aspects: (1) Williamson defines the transaction as the basic unit of analysis and (2) approaches the questions of the institutional structure in a comparative way based on transaction cost considerations. Forth, I apply the logic of TCE to the problem of harmful effects. I will show that the approach of Williamson can be applied to environmental economics too. Finally, I will discuss some implications of making the transaction to be the unit of analysis in environmental and resource economics."