Market failures and costs of intermediation cause obstacles to the delivery of transactions
A critical discussion on the impact of information asymmetries and conflicts of interest on contractual relationships
Keywords:
Market failure, economic development, market power, opportunismAbstract
To understand economic growth, this paper looks at transaction costs and how they affect how much money people make. It shows transaction costs, market failure, and economic underdevelopment. Many people think that the problems with development are because markets can't do their job of allocating resources. Some people don't believe that the market doesn't work and blame the government instead. If you look at the people who say that market failure is the root of economic backwardness, very few, if any, look at transaction costs and how they are linked to market failure. People who read this paper want to connect development economics with transaction cost theory and new institutional analysis.
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