Montenegrin Journal of Economics

Pluralistic Institutional Solutions Of The Problem Of Externalities

Bagrat Yerznkyan

2012, vol. 8, no. 2, p. 73-86

In this paper, the evolution of institutional forms of taking account and controlling externalities is analyzed. Theorizing is based on the pluralistic from the institutional viewpoint concepts of 'transaction' and mode of coordination'. That is to say, the three types of transaction (managerial, bargaining, and rationing) indicated by John Commons which structure state-economy-society interaction and corresponding institutional setups (government regulation, Coase's market bargaining, and relational contracting with emphasis on the idea of corporate social responsibility, CSR) which structure contractual agreements. The choice of the transaction types and institutional arrangements depends on their relative efficiency. The paper includes a characterization of the Russian institutional setup and an analysis of advantages and disadvantages of the different forms of institutional arrangements designed for solving the problem of externalities.

suggested citation:

Bagrat Yerznkyan. "Pluralistic Institutional Solutions Of The Problem Of Externalities." Montenegrin Journal of Economics. vol. 8, no. 2, 2012, p. 73-86

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