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

In: Environment and planning. C, Government and policy, Band 22, Heft 5, S. 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.