Third sector organizations in rural development: a transaction cost perspective

Artikel

In many parts of the world, rural development is supported by third sector organizations, such as nongovernmental organizations, farmer associations, and cooperatives. This essay develops a transaction cost explanation of these organizations role in rural areas. Since the traditional transaction cost theory is concerned with the choice of governance mechanisms within the for-profit sector, this essay adopts an alternative conceptualization of the notion of transaction cost by building on the theory of the division of labor. This theory regards transaction cost as a constraint on the division of labor causing the replacement of exchange with self-sufficiency. The proposed transaction cost explanation of rural third sector organizations consists of two arguments: 1) third sector organizations embody partial reliance on self-sufficiency; and 2) rural areas exhibit rurality-specific transaction cost acting as a constraint on the division of labor and thus creating a niche for third sector organizations. The essay concludes with suggesting a research program on developing an economic theory of the rural third sector.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Agricultural and Food Science (AFSci) ; ISSN: 1795-1895 ; Volume: 18 ; Year: 2009 ; Issue: 1 ; Pages: 3-15 ; Jokioinen: The Scientific Agricultural Society of Finland

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Valentinov, Vladislav
• Event: Veröffentlichung
• (who): The Scientific Agricultural Society of Finland
• (where): Jokioinen
• (when): 2009

Further information

• DOI: doi:10.2137/145960609788066825
• Handle: http://hdl.handle.net/10419/203054
• Last update: 10.03.2025, 11:44 AM CET