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The ‘make or buy’ decision in private environmental transactions

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  • Douadia Bougherara
  • Gilles Grolleau
  • Naoufel Mzoughi

Abstract

A theoretical framework combining the two branches of TCE, i.e., the governance branch (Williamson, 2005) and the measurement branch (Barzel, 2005) may explain the choice of the governance structure for private environmental transactions. Four case studies, i.e., the market for pure air in polluted cities, the contractual arrangement between La Esperanza and the Monteverde Conservation League, the case of the French mineral water bottler Vittel and the case of land ownership by land trusts are briefly developed in order to support the theoretical framework. Special attention is devoted to the presence (or not) of a 3-D (defined, defended and divestible) property rights system and its influence on the way environmental property rights are likely (or not) to be re-arranged. Lessons and policy implications are drawn in order to foster research on these challenging issues.
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  • Douadia Bougherara & Gilles Grolleau & Naoufel Mzoughi, 2009. "The ‘make or buy’ decision in private environmental transactions," European Journal of Law and Economics, Springer, vol. 27(1), pages 79-99, February.
    • Handle: RePEc:kap:ejlwec:v:27:y:2009:i:1:p:79-99
    DOI: 10.1007/s10657-008-9080-8
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    Cited by:

    1. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
    2. Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000. "Measuring Trust," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 811-846.
      • Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000. "Measuring Trust," Scholarly Articles 4481497, Harvard University Department of Economics.
    3. Grolleau, Gilles & McCann, Laura M.J., 2012. "Designing watershed programs to pay farmers for water quality services: Case studies of Munich and New York City," Ecological Economics, Elsevier, vol. 76(C), pages 87-94.

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    More about this item

    Keywords

    Property rights; Environmental transactions; Measurement; Transaction-cost economics; D23; K32; Q58;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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