Comparative Economic Organization: The Analysis of Discrete Structural Alternatives
1991/06/01 by Oliver E. Williamson · 7,164 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Business #Classical economics #Corporate Finance and Governance #Economic Theory and Institutions #Economic analysis #Economics #Industrial organization #Law, Economics, and Judicial Systems
paper · doi:10.2307/2393356
published in Administrative Science Quarterly 36(2), 269 (SAGE Publishing)
openalex publication_date 1991/06/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04
Abstract
Oliver E. Williamson University of California, Berkeley This paper combines institutional economics with aspects of contract law and organization theory to identify and explicate the key differences that distinguish three generic forms of economic organization-market, hybrid, and hierarchy. The analysis shows that the three generic forms are distinguished by different coordinating and control mechanisms and by different abilities to adapt to disturbances. Also, each generic form is supported and defined by a distinctive type of contract law. The costeffective choice of organization form is shown to vary systematically with the attributes of transactions. The paper unifies two hitherto disjunct areas of institutional economics-the institutional environment and the institutions of governance-by treating the institutional environment as a locus of parameters, changes in which parameters bring about shifts in the comparative costs of governance. Changes in property rights, contract law, reputation effects, and uncertainty are investigated.'
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