Humboldt-Universität zu Berlin - Resource Economics

Nature-related transactions

Among the intellectual bins which are emphasized in the Institutions of Sustainability Framework is a category called transactions. Sustainability often depends on how those transactions that affect natural systems are institutionalised. Such nature-related transactions are typical for agriculture, horticulture, fishery and forestry which interact frequently with natural systems. This interaction represents a source of enforcement problems and transaction costs in the context of governing transactions. Institutional analysis frameworks used in agricultural and resource economics should consider the particular properties of transactions involving natural systems. Transaction cost theory usually focuses on transactions that can be seen as transfers of ‘commodities’, i.e. goods predominantly produced by engineered processes within designed systems set up by humans. By contrast, institutional analysis in nature-related sectors often focuses on ‘non-commodities’; that means resources, goods and services whose transactions involve processes of self-organisation in ecosystems not completely engineered by humans.For ordering nature-related transactions, we propose a heuristic framework based on two dimensions: ‘modularity and decomposability of structures’ and ‘functional interdependence of processes’. It serves as a starting point for establishing a typology ranging from ‘atomistic-isolated transactions’ to ‘complex-interconnected transactions’. The process of institutionalising such transactions is decomposed into conceptual categories by means of a ‘transaction-interdependence cycle’.

More information related to the topic „Nature-related Transactions“ please find in the following paper:

Hagedorn, Konrad (2008). Particular Requirements of Institutional Analysis in Nature-related Sectors. European Review of Agricultural Economics 35 (3): 357-384.