Author : Eleni Zaude Gabre-Madhin
Publisher : Intl Food Policy Res Inst
ISBN 13 : 089629126X
Total Pages : 116 pages
Book Rating : 4.8/5 (962 download)
Book Synopsis Market Institutions, Transaction Costs, and Social Capital in the Ethiopian Grain Market by : Eleni Zaude Gabre-Madhin
Download or read book Market Institutions, Transaction Costs, and Social Capital in the Ethiopian Grain Market written by Eleni Zaude Gabre-Madhin and published by Intl Food Policy Res Inst. This book was released on 2001-01-01 with total page 116 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report addresses the overarching question regarding the role of institutions in enhancing market development following market reforms. It uses the New Institutional Economics framework to empirically analyze the role of a specific market institution, that of brokers acting as intermediaries to match traders in the Ethiopian grain market in reducing the transaction costs of search faced by traders. Brokers play a key role in facilitating exchange in a weak marketing environment where limited public market information, the lack of grain standardization, oral contracts, and weak legal enforcement of contracts increase the risk of contract failure. Relying on primary data, it analyzes traders' microeconomic behavior, social capital, the nature and extent of their transaction costs, and the norms and rules governing the relationship between brokers and traders.The study uses an innovative approach to quantify the costs of search and demonstrates that the brokerage institution is economically efficient both for individual traders and for global economic welfare.