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Title: The Mechanisms of Governance
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Manufacturer: Oxford University Press, USA
List Price: $29.95
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| The Mechanisms of Governance by Oxford University Press, USA Excellent on Transaction Cost Economics | | This is an excellent book on transaction cost economics. Some familiarity with transaction cost economics is assumed. It contains, essentially, a selection set of essays and additional material from Williamson, about whose work I've also written on elsewhere, on my weblog MortazaviBlog. It is a great complement and development over the earlier book of essays from Williamson: The Economic Institutions of Capitalism. | | The Mechanisms of Governance by Oxford University Press, USA Where Was The Editor? | | Williamson might be a leading figure in his field, but he can't seem to organize ideas to save his life. It's almost as though he wrote the book in one stream of consciousness, and no one ever went back to check that things flowed, language made sense, etc. One of the most painful books I've ever read. | | The Mechanisms of Governance by Oxford University Press, USA A boring style | | Ok...a well recognized teacher from aleading university...strong content...but...but...such a boring book. Really annoying to read. A lot of words made by the author (to sound more scientific?)....hey O. Williamson, next time you writte a book....use a simple style with understandable sentences like the author of "Iraationnal Exuberrance"! Really, there are lots of other books more interesting on the topic...AVOID!!! | | The Mechanisms of Governance by Oxford University Press, USA A classic of transaction cost economics | | Oliver Williamson is one of the seminal figures of New Institutional Economics. "The Mechanisms of Governance" is the third book in which Williamson has collected his principal writings, while working them into a coherent whole. The earlier volumes, "Markets and Hierarchies" and "The Economic Institutions of Capitalism," are justly regarded as the foundational texts of the transaction costs economics school of institutional economics. "The Mechanisms of Governance" seems certain to join them as essentials for any legally literate economist or economically literate lawyer. Transaction cost economics focuses on institutions, in contrast to neoclassical economics' focus on individuals, providing simple models that help us understand how institutions function and how they will respond to regulation. We can analogize transaction costs to friction: they are dead weight losses that reduce efficiency. They make transactions more costly and less likely to occur. Among the most important sources of transaction costs is the limited cognitive power of human decisionmakers. Unlike the Chicago School of law and economics, which posits the traditional concept of rational choice, Williamson asserts that rationality is bounded. Put another way, he assumes that economic actors seek to maximize their expected utility, but also that the limitations of human cognition often result in decisions that fail to maximize utility. Decisionmakers inherently have limited memories, computational skills, and other mental tools, which in turn limit their ability to gather and process information. As he demonstrates, this phenomenon, known as bounded rationality, has pervasive implications for understanding how institutions work. Accordingly, Williamson's approach provides an analytical framework that is useful not only to economists, but also to lawyers and policymakers. Among other subjects, Williamson tackles such subjects as vertical integration, corporate governance, and industrial organization. In sum, highly recommended. If so, you might ask, of course, why did I subtract one star? Mainly because of Williamson's unfortunate writing style. Although "The Mechanisms of Governance" is largely free of the recreational mathematics that plagues much modern economic writing, which is useful for those of us who flunked Differential Equations, it is very jargon-intensive. Worse yet, much of the jargon is self-created. All of which makes reading Williamson an effort-intensive project. Usually the cost-benefit analysis nevertheless comes out in his favor, but sometimes one puzzles out the jargon to find a rather obvious point that could have been conveyed far more simply. | | The Mechanisms of Governance by Oxford University Press, USA Product Description | This book brings together in one place the work of one of our most respected economic theorists, on a field in which he has played a large part in originating: the New Institutional Economics. Transaction cost economics, which studies the governance of contractual relations, is the branch of
the New Institutional Economics with which Oliver Williamson is especially associated.
Transaction cost economics takes issue with one of the fundamental building blocks in microeconomics: the theory of the firm. Whereas orthodox economics describes the firm in technological terms, as a production function, transaction cost economics describes the firm in organizational terms, as a
governance structure. Alternative feasible forms of organization--firms, markets, hybrids, bureaus--are examined comparatively. The analytical action resides in the details of transactions and the mechanisms of governance.
Transaction cost economics has had a pervasive influence on current economic thought about how and why institutions function as they do, and it has become a practical framework for research in organizations by representatives of a variety of disciplines. Through a transaction cost analysis, The
Mechanisms of Governance shows how and why simple contracts give way to complex contracts and internal organization as the hazards of contracting build up. That complicates the study of economic organization, but a richer and more relevant theory of organization is the result. Many testable
implications and lessons for public policy accrue to this framework. Applications of both kinds are numerous and growing.
Written by one of the leading economic theorists of our time, The Mechanisms of Governance is sure to be an important work for years to come. It will be of interest to scholars and students of economics, organization, management, and law. |
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