Please use this identifier to cite or link to this item: http://hdl.handle.net/2440/126414
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Type: Journal article
Title: Measuring the transaction costs of historical shifts to informal drought management institutions in Italy
Author: Loch, A.
Santato, S.
Perez-Blanco, D.
Mysiak, J.
Citation: Water, 2020; 12(7):1866-1-1866-19
Publisher: MDPI
Issue Date: 2020
ISSN: 2073-4441
2073-4441
Statement of
Responsibility: 
Adam Loch, Silvia Santato, C. Dionisio Pérez-Blanco and Jaroslav Mysiak
Abstract: Coase shows how costly resources are (re)allocated via costly institutions, and that transaction costs must therefore be positive. However, Coase did not elaborate on transitions between institutions which incur positive transaction costs that are characterized by numerous institutional complementarities; that is, feedback loops that inform the need for, and pathways toward, institutional change. Economic investigations of complementary modes of (re)allocation are rarely undertaken, let alone studies of transitions between modes. However, modes of (re)allocation that achieve similar results at less cost are generally viewed as having production-raising value. This paper measures the costs of transitioning drought management institutions in Italy toward informal, participatory, and consensus-based approaches during several recent drought events. The chosen model is Drought Steering Committees, which offer a substitute for current formal (less flexible) planning approaches, and where lower transaction costs that are associated with the transition are inferred. Our results highlight the relevance of empirical assessments of ‘costly’ transitions based on a historical study of transaction costs, as well as supporting previous works that highlight the value of contextual analysis in economic studies, in order to identify the benefits of institutional investment.
Keywords: Po River Basin; institutional economics; climate change adaptation; cost of adaptation
Description: Published: 29 June 2020
Rights: © 2020 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
RMID: 1000022604
DOI: 10.3390/w12071866
Grant ID: http://purl.org/au-research/grants/arc/DE150100328
Appears in Collections:Global Food Studies publications

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