The Assessment of Microeconomic Institutions: Transaction-Contract Approach and Its Application

Abstract

The article is devoted to reasoning, justification, and specification of transaction-contract approach to the assessment of institutions at the microeconomic level as well as the concept developed for its realization. The necessity of priority development approaches of direct economic assessment of institutions is determined and justified. Direct estimation consists of the analysis and measuring institutional components thereby overcomes the disadvantages of indirect approaches, which are very approximate in the results and may be effective for comparative estimates. Methods of direct institutional assessment allows to estimate transaction and transformation costs and benefits, which reflects the structure in relations of production and property rights, which opens the possibility of modeling economic behavior of participants in institutional agreements. Based on the necessity of developing methods of direct assessment of institutions, authors suggested to implement such an assessment by estimation of structural components at transformation of individual efforts of economic agents in collective actions based on the process of the transactions and transformations changes on the level of contract as institutional agreement. It is developed the original approach for assessment of institutions as implementation of transaction-contract approach, which contains specification of basic components of institutional agreements, identification of types of institutional norms, determination of interconnections of transaction and transformation costs in a process of production, analysis of the structure of contract relations in the context of transaction and transformation costs and benefits, development of methods of institutional estimation and its practical opportunities.