Bibliography and Links

North, D. (1990). Institutions, Institutional Change and Economic Performance, Cambridge University Press.
North develops an analytical framework for understanding the role of institutions in economic development and for elaborating a theory of institutional change. The text provides a concise definition of institutions and explains their distinction from organisations. The author demonstrates that institutions, and the way in which they change, affect the performance of economies, by explaining the manner in which institutions create the incentive structure within an economy.

Eggertsson, T. (1990). Economic Behavior and Institutions. Cambridge, Cambridge University Press.
A survey of institutional analysis within various branches of economics, this book gives a strong, whilst readily accessible, theoretical account of New Institutional Economics. A particular strength is its focus on the relationships between property rights and transaction costs, as they affect economic organisation.

Nabli, M. K. and J. B. Nugent (1989). "The New Institutional Economics and its Applicability to Development." World Development17(9): 1333-1347.
This paper serves two important purposes: (a) it clearly identifies the interrelationships between what are sometimes considered to be diverse strands of analysis within the NIE, and (b) illustrates how the concepts might be used to approach the analysis of development. The authors suggest that "LDC governments can change the nature of transaction costs and information costs, either reducing their importance or magnifying them and thereby creating additional sources of opportunistic behavior"

The International Society for New Institutional Economics (ISNIE) http://www.isnie.org
This website provides information on forthcoming ISNIE conferences and holds online papers on a wide range of NIE related topics

From Neo-classical Economics to New Institutional Economics
The brief extract demonstrates that an extremely valuable attribute of NIE is that it rests on a firm conceptual and theoretical basis, thus allowing for rigorous analysis of the efficiency of resource use. NIE shares with neo-classical economics the assumptions of rational, maximising, self-interested, economic agents. However, it relaxes some of the more restrictive assumptions of neo-classical perfect competition to reflect more common, real world situations.

A useful distinction for those wishing to access the wider literature, can be made between the Transaction Costs school which focuses on contractual arrangements for asset exchange in private transactions and the Property Rights school where the interest is on the contractual arrangements for co-ordinating access and control of assets which may or may not be held in private ownership.

Williamson, O. (1985). The Economic Institutions of Capitalism. New York, Free Press.
This book explains in detail, the basic constructs of transaction cost economics, and demonstrates how it can be applied to the study of economic organisations. The text covers such topics as the determination and governance of contractual arrangements, vertical integration and asset specificity.

Workshop in Political Theory And Policy Analysis, Indiana University http://www.indiana.edu/~workshop
Elinor Ostrom and associates at the Workshop have played a central role in the understanding of how the design of an institution motivates actors who provide, access and/or use common pool resources.
The workshop has developed a large on-line bibliographical database on Institutional analysis, at http://www.indiana.edu/~workshop/wsl/wsl.html
Particularly useful papers/texts developed at the Workshop include:

• Ostrom, E. (1990). Governing the Commons: The Evolution of Institutions for Collective Action. New York, Cambridge University Press.
• Ostrom, E. and R. Gardner (1993). "Coping with Asymmetries in the Commons - Self Governing irrigation Systems can Work." Journal of Economic Perspectives 7(4): 93-112.
• Ostrom, E., L. Schroeder, et al. (1993). Institutional Incentives and Sustainable Development: Infrastructure Policies in Perspective. Boulder, Westview Press.

International Association for the Study of Common Property (IASCP) at http://www.indiana.edu/~iascp/articles.html

UNU/WIDER Research and Training Programme Studies of Institutional and Distributive Issues http://www.wider.unu.edu/
Provides information and papers on a research theme which draws upon the NIE in the context of development. A recent paper provides a useful review of the issues involved in the group access/use of resources, as informed by NIE : Group Behaviour and Development by Judith Heyer, Frances Stewart and Rosemary Thorp, June 1999. (No longer available online) For Abstract go to: http://ideas.repec.org/p/fth/wodeec/161.html

Property Rights Revisited
This excerpt from the Wye College External Programme course: Natural Resource Economics (Unit 10 Section 1) examines the relationship between property rights regimes and transaction cost economics. Particular attention is paid to how the type of property rights regime and the distribution of these rights between interested parties affect the outcome of transactions in the natural resource sector.

Bromley, D. (1991). PROPERTY RIGHT PROBLEMS IN THE PUBLIC DOMAIN Chapter 7 pages 137- 145 In: Environment and Economy: Property rights and Public Policy. Oxford, Basil Blackwell.
In this chapter Bromley demonstrates that establishing private property rights over some resources (e.g. rangeland, forests etc) is often difficult if not impossible, and that a system of property rights involving state or communal ownership may be less costly to implement by developing a simple model to demonstrate the relationship between the property right regime and the cost of implementing that regime. A useful elaboration of the role of property rights is also provided by the author at http://www.idrc.ca/en/ev-3230-201-1-DO_TOPIC.html

New Institutional Economics and Sustainable Livelihoods Development

A number of illustrative examples of research initiatives applying the insights of NIE in the context of livelihoods development are given below:

Multiple uses of common pool resources in semi-arid West Africa: A survey of existing practices and options for sustainable resource management November 1998, Timothy O. Williams http://www.oneworld.org/odi/nrp/38.html

Land tenure

The Land Tenure section of Sustainable Development Dimensions, a service of the Sustainable Development Department (SD) of the Foodand Agriculture Organization of the United Nations (FAO) http://www.fao.org/WAICENT/FAOINFO/SUSTDEV/LTdirect/default.htm contains information on land tenure issues.

Similarly, see the Land Tenure Center at Wisconsin University– Maddison http://www.ies.wisc.edu/ltc/

Input marketing

Dorward, A., J. Kydd and C. Poulton (eds.) (1998) Smallholder Cash Crop Production Under Market Liberalisation: A New Institutional Economics Perspective. CAB International.
This book examines some of the challenges facing smallholder cash crop production in Sub-Saharan Africa and South Asia under current policies of market liberalisation. It looks not just at activity in the crop output market, but also at the performance of liberalised markets for seasonal inputs and, in particular, at linkages between the input and output markets, drawing on case studies from Ghana, Tanzania and Pakistan. The book is informed by a New Institutional Economics perspective, which focuses attention, inter alia, on problems of market failure and the incentives for economic agents to devise "institutional" responses to these problems. It highlights the importance of informal, as well as formal, institutional development in the establishment of an efficient market economy. At points the book considers the role that aid donors and NGOs can play in specific situations. However, its major concern is with the capacity of the (emerging) private sector to tackle the problems inherent in providing services in liberalised rural markets. This is combined with a frank assessment of the capacity of the state in many Sub-Saharan Africa and South Asian nations to "correct" for failures in liberalised markets and to pursue effectively any wider equity and environmental objectives

Commercial financing of seasonal input use by smallholders in liberalised agricultural marketing systems Number 30, April 1998, Andrew Dorward, Jonathan Kydd, Fergus Lyon, Nigel Poole, Colin Poulton, Laurence Smith and Michael Stockbridge http://www.oneworld.org/odi/nrp/30.html
This briefing paper provides summary information on the application of NIE to input marketing

The Imperial College, London, Wye Campus website http://www.imperial.ac.uk/wyecampus/research/aebm/themes/agrarian/interlocking/index.htm
This site contains information on a DFID funded research project "Interlocking Transactions: Market Alternatives for Renewable Natural Resource (RNR) Services"