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Coordination, Cooperation, And The Extended Coasean Approach To Economic Policy


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  • Alberto Chilosi

    (University of Pisa)


The Coasean way to deal with the cooperation failure that is implicit in Pareto inefficiency is to remove or lessen the obstacles to cooperation through the attribution of property rights and the elimination or reduction of transaction costs. The relevance of this approach is however undermined by some intrinsic difficulties to its application in a real world context, such as those arising from the number and indeterminacy of the interested parties, as well as from the free rider problem. A way to extend the Coasean approach taking into account those real life limitations is to consider the local authorities as representatives of the interest of their local constituencies and, through the provision of an adequate institutional framework, to enhance the opportunities for cooperation through voluntary agreements involving private and public parties. Thus the extent of cooperation could be widened, as opposite to traditional remedial actions relying on non- contractual, or direct entrepreneurial action by the state. With the reduction in the appeal of direct and coercive action by the state a number of institutions emphasising the contractual cooperation between public and private parties have effectively grown of importance, as wide apart as the township and village enterprises in China, or the “programmazione negoziata” in Italy. In the final part of the paper the latter

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Bibliographic Info

Paper provided by EconWPA in its series Public Economics with number 0306003.

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Length: 26 pages
Date of creation: 08 Jun 2003
Date of revision: 09 Sep 2003
Handle: RePEc:wpa:wuwppe:0306003

Note: Type of Document - Acrobat pdf; prepared on windows xp; to print on A4; pages: 26; figures: none
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Keywords: coase theorem; economic policy; transition; property rights; cooperation; coordination;

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  1. Joseph M. Ostroy & Louis Makowski, 2001. "Perfect Competition and the Creativity of the Market," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 479-535, June.
  2. Usher, Dan, 1998. "The Coase theorem is tautological, incoherent or wrong," Economics Letters, Elsevier, vol. 61(1), pages 3-11, October.
  3. Ernst Fehr & Simon Gaechter, 2003. "Altruistic Punishment in Humans," Microeconomics 0305006, EconWPA.
  4. Dixit, Avinash & Olson, Mancur, 2000. "Does voluntary participation undermine the Coase Theorem?," Journal of Public Economics, Elsevier, vol. 76(3), pages 309-335, June.
  5. Silvestre, Joaquim, 1993. "The Market-Power Foundations of Macroeconomic Policy," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 105-41, March.
  6. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
  7. Beniamino Moro, 2001. "Incentivi fiscali e politiche di sviluppo economico regionale in Europa," Moneta e Credito, Economia civile, vol. 54(215), pages 343-388.
  8. Kiminiori Matsuyama, 1995. "Economic Development as Coordination Problems," Discussion Papers 1123, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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