Co-operative Theory from a NIE Perspective

Alternative modes of organisation have evoked interest especially recently in agricultural economics with the wake of New Institutional Economics (NIE). Economics has previously neglected the “inside” of the firm, taken for granted that it would be organised and operated optimally. NIE started to look at the organisation from the point of view of optimal operations and the conditions of these with as early start as Coase (1937). There is a keen practical interest in organisational forms in agriculture in Central-Eastern Europe that was created by transition and the specific problems of restructuring agriculture. The picture was complicated by the fact that a number of the CEE countries aspired (successfully) for entering the European Union and this formed a new challenge for the Common Agricultural Policy. This paper attempts to analyse the facts that accompanied the transition of organisational forms in agriculture in Hungary in the following structure: in Section 1 it analyses the causes of prejudices against specific organisational forms, in Section 2 it looks at the effect of the institutional environment on the choice of organisational forms, in Section 3 discussion of choice of organisational forms will follow from the transaction cost perspective, and in Section 4 some conclusions will be drawn.