IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Factors that influence transaction costs in development offsets: Who bears what and why?

  • Coggan, Anthea
  • Buitelaar, Edwin
  • Whitten, Stuart
  • Bennett, Jeff

Environmental policy instruments generate transaction costs to public and private parties. There is a growing literature reporting on the size of transaction costs produced by environmental policy instruments. This paper extends that literature through an analysis of the factors that influence transaction costs in environmental policy and how this influence occurs. The theory based factors that influence transaction costs are categorised as: 1) transaction characteristics; 2) transactor characteristics; 3) nature of the institutional environment; and 4) nature of the institutional arrangements. We examined how these factors influenced transaction costs through the analysis of two Australian-based development offset schemes with different policy designs. We found evidence of all four theory-based categories of influence in the policy case studies. The degree of influence and how each factor influenced transaction costs varies across the two policies and between parties. Policy design as a component of the institutional environment had a particularly large bearing on transaction costs of offset buyers and the policy administrator. An important contribution to transaction cost theory assumes the institutional environment as given.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 88 (2013)
Issue (Month): C ()
Pages: 222-231

in new window

Handle: RePEc:eee:ecolec:v:88:y:2013:i:c:p:222-231
DOI: 10.1016/j.ecolecon.2012.12.007
Contact details of provider: Web page:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Pannell, David J. & Roberts, Anna M. & Park, Geoff & Alexander, Jennifer, 2013. "Improving environmental decisions: A transaction-costs story," Ecological Economics, Elsevier, vol. 88(C), pages 244-252.
  2. Geraldine Ducos & Pierre Dupraz & Francois Bonnieux, 2009. "Agri-environment contract adoption under fixed and variable compliance costs," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 52(5), pages 669-687.
  3. Arild Vatn, 2001. "Environmental resources, property regimes, and efficiency," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 19(5), pages 665-680, October.
  4. Fredrik Olof Laurentius Nilsson, 2009. "Transaction costs and agri-environmental policy measures: are preferences influencing policy implementation?," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 52(6), pages 757-775.
  5. Williamson, Oliver E, 1999. "Public and Private Bureaucracies: A Transaction Cost Economics Perspective," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 306-42, April.
  6. Dahlman, Carl J, 1979. "The Problem of Externality," Journal of Law and Economics, University of Chicago Press, vol. 22(1), pages 141-62, April.
  7. Williamson, Oliver E, 1973. "Markets and Hierarchies: Some Elementary Considerations," American Economic Review, American Economic Association, vol. 63(2), pages 316-25, May.
  8. Masten, Scott E & Meehan, James W, Jr & Snyder, Edward A, 1991. "The Costs of Organization," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(1), pages 1-25, Spring.
  9. Evy Mettepenningen & Ann Verspecht & Guido Van Huylenbroeck, 2009. "Measuring private transaction costs of European agri-environmental schemes," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 52(5), pages 649-667.
  10. Arild Vatn, 1998. "Input versus Emission Taxes: Environmental Taxes in a Mass Balance and Transaction Costs Perspective," Land Economics, University of Wisconsin Press, vol. 74(4), pages 514-525.
  11. Vatn, Arild, 2010. "An institutional analysis of payments for environmental services," Ecological Economics, Elsevier, vol. 69(6), pages 1245-1252, April.
  12. Mettepenningen, E. & Beckmann, V. & Eggers, J., 2011. "Public transaction costs of agri-environmental schemes and their determinants--Analysing stakeholders' involvement and perceptions," Ecological Economics, Elsevier, vol. 70(4), pages 641-650, February.
  13. Katherine Falconer & Pierre Dupraz & Martin Whitby, 2001. "An Investigation of Policy Administrative Costs Using Panel Data for the English Environmentally Sensitive Areas," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(1), pages 83-103.
  14. Coggan, Anthea & Whitten, Stuart M. & Bennett, Jeff, 2010. "Influences of transaction costs in environmental policy," Ecological Economics, Elsevier, vol. 69(9), pages 1777-1784, July.
  15. Ning Wang, 2007. "Measuring Transaction Costs: Diverging Approaches, Contending Practices," Division of Labor & Transaction Costs (DLTC), World Scientific Publishing Co. Pte. Ltd., vol. 2(02), pages 111-146.
  16. Garrick, Dustin & Whitten, Stuart M. & Coggan, Anthea, 2013. "Understanding the evolution and performance of water markets and allocation policy: A transaction costs analysis framework," Ecological Economics, Elsevier, vol. 88(C), pages 195-205.
  17. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
  18. McCann, Laura M.J. & Easter, K. William, 2000. "Estimates Of Public Sector Transaction Costs In Nrcs Programs," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(03), December.
  19. McCann, Laura & Colby, Bonnie & Easter, K. William & Kasterine, Alexander & Kuperan, K.V., 2005. "Transaction cost measurement for evaluating environmental policies," Ecological Economics, Elsevier, vol. 52(4), pages 527-542, March.
  20. Vatn Arild & Bromley Daniel W., 1994. "Choices without Prices without Apologies," Journal of Environmental Economics and Management, Elsevier, vol. 26(2), pages 129-148, March.
  21. North, D.C., 1990. "A Transaction Cost Theory of Politics," Papers 144, Washington St. Louis - School of Business and Political Economy.
  22. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
  23. Laura McCann & K. William Easter, 1999. "Transaction Costs of Policies to Reduce Agricultural Phosphorous Pollution in the Minnesota River," Land Economics, University of Wisconsin Press, vol. 75(3), pages 402-414.
  24. Per Kristian Rørstad & Arild Vatn & Valborg Kvakkestad, 2007. "Why do transaction costs of agricultural policies vary?," Agricultural Economics, International Association of Agricultural Economists, vol. 36(1), pages 1-11, 01.
  25. Ofei-Mensah, Albert & Bennett, Jeff, 2013. "Transaction costs of alternative greenhouse gas policies in the Australian transport energy sector," Ecological Economics, Elsevier, vol. 88(C), pages 214-221.
  26. Marshall, Graham R., 2013. "Transaction costs, collective action and adaptation in managing complex social–ecological systems," Ecological Economics, Elsevier, vol. 88(C), pages 185-194.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:88:y:2013:i:c:p:222-231. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.