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

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  • Regina Birner

    (Institute of Rural Development, Georg-August University of Göttingen, Waldweg 26, D-37073 Göttingen, Germany)

  • Heidi Wittmer

    (UFZ-Center for Environmental Research Leipzig-Halle, Permoser Strasse 15, D-04318 Leipzig, Germany)

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.

Suggested Citation

  • Regina Birner & Heidi Wittmer, 2004. "On the ‘Efficient Boundaries of the State’: The Contribution of Transaction-Costs Economics to the Analysis of Decentralization and Devolution in Natural Resource Management," Environment and Planning C, , vol. 22(5), pages 667-685, October.
    • Handle: RePEc:sae:envirc:v:22:y:2004:i:5:p:667-685
    DOI: 10.1068/c03101s
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    References listed on IDEAS

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    9. Lehmann, Paul, 2011. "Making water affordable to all: A typology and evaluation of options for urban water pricing," UFZ Discussion Papers 10/2011, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
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    11. Volker Meyer & Sally Priest & Christian Kuhlicke, 2012. "Economic evaluation of structural and non-structural flood risk management measures: examples from the Mulde River," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 62(2), pages 301-324, June.
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    13. Chobotová, Veronika, 2013. "The role of market-based instruments for biodiversity conservation in Central and Eastern Europe," Ecological Economics, Elsevier, vol. 95(C), pages 41-50.
    14. Thiel, Andreas & Schleyer, Christian & Hinkel, Jochen & Schlüter, Maja & Hagedorn, Konrad & Bisaro, Sandy & Bobojonov, Ihtiyor & Hamidov, Ahmad, 2016. "Transferring Williamson's discriminating alignment to the analysis of environmental governance of social-ecological interdependence," Ecological Economics, Elsevier, vol. 128(C), pages 159-168.
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    18. Kamanda, Josey & Birner, Regina & Bantilan, Ma Cynthia S., 2013. "Strategic positioning of international agricultural research centres: Comparative advantage and trade-offs from a transaction cost economics perspective," 2013 Conference (57th), February 5-8, 2013, Sydney, Australia 152160, Australian Agricultural and Resource Economics Society.
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