Contractual Change and Self-Enforcing Governance: Lessons from Post-Socialist Transition for Institutional Reform Policies
Journal of Rural Development, Vol. 26, pp. 53-81, Summer 2003
Posted: 15 Jan 2006
This paper focuses on firm restructuring in transition countries. We suggest mechanisms of governance change that can lead to self-reinforcing contracts. The urn-function model, by linking history, policy, and the relative governance share in a business sector, seeks to support the explanation of the stability of large-scale agriculture. Applied to agricultural restructuring, network externalities in governance structures and increasing transactional returns resulting socialist farming may cause the stability of large-scale farm organizations during transition, even though family farming is often expected to be more efficient according to transaction costs arguments. Some empirical evidence comes from the Czech case of post-socialist transition. Finally we try to draw out the lessons for a possible transition on the Korean peninsula.
Keywords: agricultural transition, self-reinforcing governance structures, firm restructuring
JEL Classification: L22, Q12, Q15
Suggested Citation: Suggested Citation