S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
European Instiute of Japanese Studies, Stockholm School of Economics EIJS Working Papers Series

No 160:
INSTITUTIONAL TRANSITION AND TRANSITION COST: A METHODOLOGICAL CONSIDERATION

Jang-Sup SHIN

Abstract: This paper attempts to explain why institutional changes, whose direction look obvious at the beginning, arouse controversies and, more often than not, face ‘setbacks’. It starts from critically assessing North’s (1981; 1990) analysis of relating transaction cost and economic performance and argues for considering ‘transition cost’, separately from transaction cost, in designing institutional change. The ‘reformers’ are often interested in possible transaction cost reducing effect of institutional transition. But an institutional transition can be justified only if the reduction in transaction cost more than compensates for transition cost involved. It seems that many institutional reforms face problems because they ignore or underestimate the aspect of transition cost, the size of which is specific to institutions concerned.

Keywords: Institutional change; transaction cost; transition cost; economic reform; (follow links to similar papers)

JEL-Codes: L50; O10; O53; P00; (follow links to similar papers)

25 pages, October 1, 2002

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

eijswp0160.pdf    PDF-file (154kB) 
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Nanhee Lee ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:eijswp:0160 This page was generated on 2015-05-27 22:01:40