20. Problems in measuring transaction costs (Bulgarian agricultural sector)

Author: Minko Georgiev

DOI: n/a


Transaction costs represent the evaluation of public relations, where there is a distribution of rights – in production, marketing and administrative processes. Williamson (1985) puts them in the center of the overall economizing of the institutional environment. Improper measurement, however, is a problem that has led to increased information asymmetry accompanying economic exchange. This may have distorted signals, respectively, making incorrect decisions on the part of the economic actors. The purpose of this paper is to clarify the theoretical and methodological aspects of measuring transaction costs (for example the Agricultural Sector in Bulgaria). The materials and methods used in the study are known from the institutional analysis. Their measurement is associated with two basic approaches. The first is used by Wallis and North (1986). The measurement of transaction costs via that approach does not give enough sound information about defects in the institutional matrix. The second approach to measuring transaction costs used by Williamson (1979, 1985), allows for separation of public relations into two main groups: (1) those that support economic growth and (2) those that cause losses. The latter appears to be suitable for determining the factors that influence the processes and may serve to enforce the direction of changing the legislation.