A Transaction Cost Theory of Politics

  title={A Transaction Cost Theory of Politics},
  author={Douglass Cecil North},
  journal={Journal of Theoretical Politics},
  pages={355 - 367}
  • D. North
  • Published 1 October 1990
  • Economics
  • Journal of Theoretical Politics
This essay first specifies and describes the behavioral and information cost assumptions that underlie instrumental rationality and the consequent a-institutional world of neoclassical theory and contrasts these assumptions to those that underpin a theory of institutions and transaction costs. It then explores the characteristics of political markets, characterizing the costs of transacting in political markets and the role of ideology in shaping political choices. Finally, it explores the… 

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