Transaction sector, markets and regional income disparities
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Date
2011
Authors
O'Malley, D.
Editors
Dalziel, P.
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Conference paper
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Refereed Proceedings of the 35th Annual Conference of the Australian and New Zealand Regional Science Association International, 2011 / Dalziel, P. (ed./s), pp.235-246
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35th Annual Conference of the Australian and New Zealand Regional Science Association International (6 Dec 2011 - 9 Dec 2011 : Canberra, Australia)
Abstract
The New Institutional Economics argues that markets must be made, usually by identifiable people such as the producers of new products or services (Furubotn and Richter, 2010). This paper argues that the transaction sector (Wallis and North, 1986) provides the services necessary to make and extend markets. Following Adam Smith, an extension of the market enables a more efficient division of labour, thus growing productivity and incomes. Markets are organised in a wide variety of ways, and are formed and embedded in pre-existing social structures (Granovetter, 1992, 2005). The paper reviews literature on the relationship between regional transaction sectors, regional incomes, and social structure. Regional disparities of income may not be simply a function of resource endowment; they may arise from pre-existing local and inter-regional social structures which affect market development. The paper outlines a program of future research which may provide a practical diagnostic for regional economic development policy.
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Copyright 2011 ANZRSAI and Tony O'Malley