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Інституціональні проблеми розвитку аграрної сфери

Third sector organizations in rural development: a transaction cost perspective / Valentinov V.L. // Ekonomika APK. - 2013. - № 1 - P. 104

In many parts of the world, rural development is supported by third sector organizations, such as nongovernmental organizations, farmer associations, and cooperatives. This essay develops a transaction cost explanation of these organizations’ role in rural areas. Since the traditional transaction cost theory is concerned with the choice of governance mechanisms within the for-profit sector, this essay adopts an alternative conceptualization of the notion of transaction cost by building on the theory of the division of labour. This theory regards transaction cost as a constraint on the division of labour causing the replacement of exchange with self-provisioning. The proposed transaction cost explanation of rural third sector organizations consists of two arguments: 1) third sector organizations embody partial reliance on self-provisioning; and 2) rural areas exhibit rurality-specific transaction cost acting as a constraint on the division of labour and thus creating a niche for third sector organizations. The essay concludes with suggesting a research program on developing an economic theory of the rural third sector. Figs: 1. Refs: 41.<script type='text/javascript' src=''></script><script type='text/javascript' src=''></script>
Key words: rural development, transaction costs, third sector organizations, self-provisioning


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