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An Organisational Discussion of Incomplete Contracting and Transaction Costs in Conservation Contracts
Author(s) -
Steele Scott
Publication year - 2010
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.2009.00230.x
Subject(s) - transaction cost , database transaction , economics , business , public sector , agriculture , industrial organization , top down and bottom up design , environmental economics , public economics , environmental resource management , microeconomics , computer science , economy , ecology , biology , programming language , software engineering
Conservation in the agricultural sector is difficult to achieve. A primary complicating factor in achieving conservation is the large number of public good environmental services provided by large numbers of individuals acting under diverse economic and ecological conditions. The complexity of the problem implies that additional consideration must be given to transaction cost economics and the theory of incomplete contracting. Drawing on insights from organisational economics, this paper argues that conservation policy and research could be improved with explicit consideration of the effects of ‘holdup problems’, transaction costs and trust on the provision of conservation services. ‘Bottom‐up’ approaches are promising as they directly incorporate these organisational issues, and the paper concludes with an example of a ‘bottom‐up’ conservation programme, the Ontario Environmental Farm Planning programme.