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The measurement of transaction costs in Poland, 1996-2014

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  • Graca-Gelert, Patrycja
  • Sulejewicz, Aleksander

Abstract

The empirical validation of the transaction cost concept proved to be a major intellectual endeavour that has yielded only partial success. Particular difficulties have been encountered in the measurement of such costs at the micro or macro level. The paper of Wallis and North (1986) is one attempt to provide a measure of transaction costs in the national economy. Their attempt is to define “transaction sectors” and relate the levels of output (i.e. costs incurred) in such sectors to the level of gross national / domestic product. Among these costs one finds: a) costs of management, sales, administration and control, b) costs of financing, insurance, distribution, c) (some of the costs) of the public sector / the State. Apart from the original research concerning the US, there have been relatively few studies describing other economies (e.g. Australia, Argentina, Bulgaria). The paper joins the discussion on the macroeconomic interpretation of transaction costs started by Wallis and North. While we had hoped to trace the evolution of the transaction sectors as well as the pattern of transaction activities in non-transaction sectors as defined above, the availability of data prevented us from accomplishing ambitious research tasks. This paper is basically a replication of the study Wallis and North (1986) did for the US albeit for a much shorter time span (nineteen years). It contains a short description of the methodology used by these authors, the application of the method to the data on the Polish economy from the mid-1990s to 2014. We compare the findings with Wallis and North and other authors of studies on macroeconomic transaction costs and provide some interpretations of the results. Basically, our findings are remarkably close to the estimates of other teams. However, serious ambiguities in Wallis-North conceptualization make us sceptical as to the merits of this research subprogramme within neo-institutional economics. The implications for the understanding of economic growth and development remain unclear.

Suggested Citation

  • Graca-Gelert, Patrycja & Sulejewicz, Aleksander, 2021. "The measurement of transaction costs in Poland, 1996-2014," MPRA Paper 108833, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:108833
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    File URL: https://mpra.ub.uni-muenchen.de/108833/1/MPRA_paper_108833.pdf
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    References listed on IDEAS

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    1. Hendrik Dalen & Aico Vuuren, 2005. "Greasing the Wheels of Trade: A Profile of the Dutch Transaction Sector**," De Economist, Springer, vol. 153(2), pages 139-165, June.
    2. Victor R. Fuchs, 1969. "Production and Productivity in the Service Industries," NBER Books, National Bureau of Economic Research, Inc, number fuch69-1.
    3. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    4. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    5. Puqing Lai, 2013. "Solving the Wallis--North paradox in transaction cost measurement," Applied Economics Letters, Taylor & Francis Journals, vol. 20(15), pages 1445-1448, October.
    6. North,Douglass C. & Wallis,John Joseph & Weingast,Barry R., 2013. "Violence and Social Orders," Cambridge Books, Cambridge University Press, number 9781107646995.
    7. Wallis, John Joseph & North, Douglass C., 1988. "Should Transaction Costs be Subtracted from Gross National Product?," The Journal of Economic History, Cambridge University Press, vol. 48(03), pages 651-654, September.
    8. North, Douglass C., 1984. "Government and the Cost of Exchange in History," The Journal of Economic History, Cambridge University Press, vol. 44(2), pages 255-264, June.
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    More about this item

    Keywords

    Poland; transaction costs; transaction sector;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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