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An Organisational Discussion of Incomplete Contracting and Transaction Costs in Conservation Contracts

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  • Scott Steele

Abstract

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.

Suggested Citation

  • Scott Steele, 2010. "An Organisational Discussion of Incomplete Contracting and Transaction Costs in Conservation Contracts," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(1), pages 163-174, February.
    • Handle: RePEc:bla:jageco:v:61:y:2010:i:1:p:163-174
    DOI: 10.1111/j.1477-9552.2009.00230.x
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    References listed on IDEAS

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    1. Murphy, Geraldine & O’Donoghue, Cathal & Hynes, Stephen & Murphy, Eithne, 2014. "Modelling the Participation Decision in Agri-Environmental Schemes," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183069, European Association of Agricultural Economists.

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