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Is Transaction Cost Economics Applicable to Public Governance?

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Abstract

The applicability of Transaction Cost Economics (TCE) to the public sphere is examined with the use of institutional legal theory. First, Oliver E. Williamson's 1985 general theory of private governance structures is analyzed. Following on this, his 1999 attempt at extending the theory to capture governance structures in the public sphere as well, is analyzed with the use of the insights gained from the first stage. Finally, on the basis of the whole two-stage analysis, an attempt is made at solving some fundamental problems concerning the applicability of TCE to public governance.

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Authors and Affiliations

  1. School of Business, Public Administration and Technology, University of Twente, P.O. Box 217, NL-7500 AE, Enschede, The Netherlands

    Dick W. P. Ruiter

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  1. Dick W. P. Ruiter
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Correspondence to Dick W. P. Ruiter.

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JEL Classification: B52, D73, H11, K0, L22, L33

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Ruiter, D.W.P. Is Transaction Cost Economics Applicable to Public Governance?. Eur J Law Econ 20, 287–303 (2005). https://doi.org/10.1007/s10657-005-4197-5

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  • DOI: https://doi.org/10.1007/s10657-005-4197-5

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