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™ ȱɧɫɬɢɬɭɰɿɨɧɚɥɶɧɿ ɩɪɨɛɥɟɦɢ ɪɨɡɜɢɬɤɭ ɚɝɪɚɪɧɨʀ ɫɮɟɪɢ Privatdozent Dr. habil. VLADISLAV VALENTINOV,
Schumpeter Fellow of the Volkswagen Foundation,
Leibniz Institute of Agricultural Development in Central and Eastern Europe,
Halle, Germany
Third sector organizations in rural development:
a transaction cost perspective1
Introduction. In many countries of the
mechanisms differ in their ability to economize world, the development of rural areas is ac- on transaction cost in different transactional tively supported by third sector organizations situations, and it is these differences that (TSOs), i.e., organizations representing neither explain why some governance mechanisms are for-profit firms nor governmental agencies [15; sometimes preferred over others. Given that 26]. Defined as private, non-profit-distributing, some rural TSOs (such as cooperatives) have democratically self-governed, and voluntary been considered to be governance mechanisms entities [21], TSOs affect the development of comparable with markets and hierarchies [4; rural areas and agrifood chains in a variety of 14; 23; 31], it stands to reason that the ways, e.g. by enhancing farmers’ market power existence of such TSOs may be explicable in [10], articulating the political interests of rural populations [15], promoting the development of economizing on transaction cost in specific rural diversification [20; 32], as well as by transactional situations. This heuristic strategy other case-specific means of improving the has, in fact, been pursued in a number of well-being of rural dwellers [26]. Yet, despite the substantial progress in the development of the general economic theory of TSOs [e.g., 24; 27; 28], rurality has so far not been hypothe- This essay will, however, contend that this sized to be a possible determinant of TSOs’ ex- view of cooperatives, while not without a istence. This essay is aimed at elaborating this certain merit, is questionable on its own hypothesis by building on the transaction cost grounds and cannot be generalized to the whole theory and combining it with the theory of the third sector. It will be argued that the conceptual relationship between TSOs, on the The motivation to apply the transaction cost one hand, and markets and hierarchies, on the theory to explain the existence of rural TSOs other, is not adequately captured by variations rests on the widely acknowledged usefulness of of their transaction cost-economizing capacities this theory in explaining the choice among along a continuum of transactional governance mechanisms. The transaction cost characteristics (such as e.g. asset specificity). theory demonstrates that governance Instead, the essay will develop an alternative transaction cost explanation of the existence of 1 This article is a revised and updated version of an earlier article that TSOs that takes due account of the differences was published under the same title by the same author in the 2009 vol- in the economic roles of TSOs and for-profit ume of Agricultural and Food Science (Volume 18, pp. 3-15). The author gratefully acknowledges the Publisher’s permission to reprint firms, as emphasized in the theories of the third the article. The original publication can be found at http://www.afsci.fi/ sector [9; 24; 27; 28]. Importantly, this and http://ojs.tsv.fi/index.php/AFS/article/view/5930 . explanation will be shown to be related to the rural areas’ characteristics that lie at the heart plicit about these criteria [e.g. 4; 14]. Strictly of the rural development challenges throughout speaking, until these criteria are identified, the world. The essay concludes with discussing there are no grounds for assuming the hybrid implications of the proposed transaction cost nature of TSOs. However, there is an even explanation of TSOs for the major economic more important reason why the designation of theories of the third sector as well as for the TSOs as hybrids must be called into question, and this reason follows from the very definition The logic of institutional response to of the third sector. transaction cost. In his seminal 1937 article on Specifically, the third sector is defined as the nature of the firm, Ronald Coase empha- such in contrast to the private for-profit sector sized that using the price mechanism has a cost, and the governmental sector, and is justified in primarily consisting of the cost of discovering terms of the latter sectors’ failures [9; 16; 24]. the relevant prices. This cost, in his view, ex- plained why some resources are more effi- continuum of governance mechanisms ranging ciently allocated within (for-profit) firms rather from market to hierarchy is descriptive of the than through market exchange relationships be- for-profit, rather than of the third, sector. tween these firms. Subsequent literature ex- Indeed, if any particular transactions can be tended the Coasean insights to take account of satisfactorily organized through spot market, or incentive alignment as the problem of safe- vertical integration within for-profit firms, or guarding against opportunistic and strategic be- any forms of intermediate (relational or long- havior [1; 35; 29]. In the 1990s, this literature experienced a further shift from the classic di- transactions do not need to be undertaken by chotomy between market and hierarchy to an the third sector. Moreover, the substantial interest in the broad range of institutional ar- literature designated as ‘the theory of the firm’ rangements designated as hybrids [14]. The is clearly concerned with for-profit firms rather significant diversity of hybrid institutional ar- than with TSOs fundamentally differing from rangements raised the issue of governance for-profit firms in being non-profit-distributing mechanisms’ classification, which has been re- and democratically self-governed2. Thus, alized in various versions of the ‘governance defining TSOs as entities performing tasks that continuum’ delimited by the polar modes of can be performed neither by markets, nor by market and hierarchical organization [e.g., 13; 17; 36]. Originally conceived by Williamson intermediate contracting involving these firms, [36], governance continuums involved a speci- necessarily entails rejecting the representation fication of criteria with respect to which various governance mechanisms are structured into a hierarchy. The TSOs’ exclusion from the logical sequence. For instance, Williamson [36] governance continuum poses, however, several differentiated the transaction cost-economizing new issues. First, if the traditional transaction ability of various governance mechanisms ac- cost-economizing framework is unsuitable for cording to their incentive intensity, reliance on conceptualizing the relationship of TSOs to the administrative controls, the type of economic elements of the governance continuum, what adaptation they support, and the type of con- alternative framework must be used? Is the concept of transaction cost still relevant to it? market and hierarchy requires specifying classi- fication criteria according to which TSOs could 2 Oliver Williamson [e.g. 35; 36; 37; 38] repeatedly emphasized that the transaction cost-economizing logic is useful in explaining the existence be clearly assigned an intermediate position of hybrid and nonstandard forms of contracting, of which TSOs may be between these polar modes of economic or- assumed to be one example. This assumption however must countered with the fact that these forms of contracting are entertained by for-profit ganization. Interestingly, studies advocating the firms. Since TSOs are defined and justified in terms of the tasks that hybrid nature of (some of) TSOs were not ex- cannot be delegated to for-profit firms, TSOs cannot be regarded in the same way as e.g. ‘customer and territorial restrictions, tie-ins, block booking, franchising, vertical integration, and the like’ [35, p. 19]. Second, since this essay is particularly application depends on the size of transaction concerned with rural TSOs, it will be necessary cost. The higher this cost, the more wants must to examine the relationship between rurality be gratified through self-provisioning; the and the rationale for TSOs in the alternative lower this cost, the greater space is available for framework to be proposed. These issues are relying on the division of labor and exchange. Gratification of wants through the division of Toward an alternative transaction cost view labor and exchange is superior in the sense that of TSOs. As shown above, the traditional it is supported by the existence of gains from transaction cost theory explains the existence of specialization. Yet, when the generation of various governance mechanisms within the for- these gains is precluded by high transaction profit sector, but does not extend beyond this cost, individuals nevertheless seek to gratify sector’s boundaries. It could be concluded at their wants through self-provisioning, despite this point that the concept of transaction cost does not present an appropriate theoretical tool Hence, from the perspective of the theory of for explaining the existence of the third sector. the division of labor, transaction cost gives rise This conclusion would be warranted if the to two types of institutional response. First, to significance of transaction cost for the the extent that transaction cost can be reduced, operation of a market economy were limited to it causes the emergence of institutions facilitat- causing the emergence of transaction cost- ing market exchange, most importantly the in- economizing governance mechanisms. This stitution of the for-profit firm. Second, to the limitation, however, is not the case. Transaction extent that transaction cost acts as a constraint cost not only explains the existence of specific on the division of labor, it causes the emer- governance mechanisms within a market gence of institutions of self-provisioning. Im-economy, but circumscribes the extent of the portantly, the occurrence of positive transaction market economy itself. This is a point which cost in its latter capacity does not mean that falls beyond the scope of the traditional transac- human wants remain ungratified; rather it tion cost theory but is emphasized by the theory means that these wants can be gratified through of the division of labor dating back to Adam self-provisioning and not through exchange, i.e. Smith. This theory consists of two principal without realizing the gains from specialization. propositions. One is that the division of labor While the first type of institutional response improves productivity due to the existence of has been widely discussed in the institutional gains from specialization; the other is that the economics literature, the second response has division of labor is limited by a number of been practically never mentioned (with the im-factors, such as the extent of the market [22], portant exception of Demsetz [7]). It is there- transaction cost [3, 40], and availability of fore necessary to be clear about what institu-knowledge [3]. tions may represent self-provisioning. A major Thus the theory of the division of labor lo- fact about self-provisioning is that it may be cates the role of transaction cost in drawing the individual or collective (since not only indi- boundary between those human wants (prefer- viduals, but also groups can produce for pur- ences) that can be gratified by relying on the poses of own consumption). Individual self- division of labor, and those that cannot. Cru- provisioning is embodied in individual autarky, cially, this theory does not claim that the latter while collective self-provisioning is represented wants must remain ungratified; rather, it sees by a range of mutual self-help organizations the mechanism of their gratification not in the producing goods and services for consumption division of labor and exchange, but in self- by their members. Individual autarky, in the provisioning which is understood as production form of e.g. subsistence farming, is a common for one’s own consumption [e.g. 7, p. 7; see occurrence in many rural areas across the also 30]. This theory thus suggests that there world, but it presents a relatively weak mecha- nism for supporting rural development, as com- nisms of gratification of human wants, ex- pared with collective self-provisioning. Impor- change and self-provisioning, whose range of tantly, in order to be designated as embodying self-provisioning, mutual self-help organiza- tion of the third sector as an embodiment of tions need not fully provide their members with self-provisioning to be valid, it is sufficient that the means of living. Rather, any instance of at least some of these stakeholders do so. production of outputs for purposes of own con- Explaining rural TSOs. If TSOs are
generally explained as an embodiment of self- sufficient with respect to these particular out- provisioning arising from the transaction cost- puts. Clearly, this understanding of self- related (as well as other) constraints on the provisioning does not imply that these organi- system of the division of labor, how does this zations are generally prohibited from buying view inform the analysis of rural TSOs? The and selling in the marketplace; rather, it simply applicability of the proposed transaction cost requires these organizations to produce at least framework to explaining the existence of rural some outputs for purposes of own consumption TSOs is grounded on the fact that rural areas, in both developed and developing countries, have Given the existence of exchange and self- a number of socio-economic characteristics that provisioning as the alternative and complemen- result in high transaction cost hindering the tary mechanisms of gratifying human wants, development of the system of the division of TSOs must be recognized as exhibiting an im- labor. These characteristics of rural areas most portant affinity with the latter mechanism, and importantly include relatively low population more specifically, as embodying partial collec- density, significant geographic dispersion of tive self-provisioning. The self-provisioning consumers and producers, and relatively poor nature of TSOs can be seen in the fact that their infrastructure [25]. These characteristics thus organizational goals are constituted by missions imply that transaction cost standing in the way rather than by monetary gain. Indeed, monetary of interaction between consumers and pro- gain as a motivation for business activity is a ducers is higher in rural areas than urban ones. distinctive feature of the for-profit sector and In the following, transaction cost stemming underlies the operation of all above-mentioned from these characteristics will be referred to as governance mechanisms, including market, hi- erarchy, and any intermediate contracting The argument about the effect of rurality on forms. By contrast, self-provisioning as produc- transaction cost of exchange must be seen in tion for one’s own consumption must be guided the context of two qualifications. First, rural by the utility from consuming this production’s development scholars often emphasize that outputs. Evidently, the same motivation is there is no universally accepted definition of characteristic of TSOs because the pursuit of rurality [e.g., 2]. Terluin [25] distinguishes be- TSOs’ missions must enhance the utility of at tween definitions used by the OECD, by the least some of these organizations’ stakeholders. European Commission, and by policy-makers Deriving utility from contributing to the reali- in various EU member states. Variations in ap- zation of TSOs’ missions, these stakeholders do proaches to defining rurality suggest that it may not need monetary remuneration as a motiva- be conceptualized in terms of a continuum of tion for doing so. Hence, since the pursuit of characteristics, each of which gives rise to the mission is the source of utility to these stake- rurality-specific transaction cost. The more holders, their involvement in TSOs represents these characteristics are pronounced in particu- the gratification of their wants through self- lar rural areas, the higher will be the rurality- provisioning. In line with the theory of the divi- specific transaction cost, and the greater will be sion of labor, these stakeholders resort to self- the difference between transaction cost levels in provisioning because the gratification of their the respective rural and urban areas. Operation- wants through the system of division of labor, alizing this argument for the purposes of em- embodied in the for-profit sector, is prevented pirical research will thus require a specification by high transaction cost. Importantly, this ar- of the approach taken to define rurality. The gumentation does not require all TSOs’ stake- second qualification is that transaction cost lev- holders to derive utility from contributing to the els in rural areas depend not only on the above- realization of TSOs’ missions. For the designa- mentioned characteristics of these areas, but also on the state of formal and informal institu- that are typically undertaken by rural TSOs on tional environment, e.g. the presence of trust the self-provisioning basis include maintenance and social relationships [e.g., 39]. In the pro- of local culture and infrastructure, provision of posed argument, the latter determinants of social services [e.g. 26], administering the use transaction cost are subsumed in the ceteris of common pool resources [e.g. 19], or, in the paribus conditions. Operationalizing the argu- ment will require making these determinants organization of product marketing and of input supply as well as delivery of technological Transaction cost analyzed by the traditional services [23]. These activities either cannot be transaction cost theory can be meaningfully organized by the for-profit sector, or, in the thought of as being reduced (economized) by case of some agricultural cooperatives, their using the right governance mechanisms. In con- delegation to the for-profit sector may result in trast, the above mentioned characteristics of higher costs to agricultural producers. The rural areas represent ‘brute facts’ that cannot be variety of activities performed by rural TSOs is altered by using any governance mechanism; reflected in the variety of TSOs’ structural hence, the rurality-specific transaction cost types, such as agricultural and rural does not meaningfully yield itself to being cooperatives, rural partnerships, community economized. Evidently, the inability of the organizations, associations, nongovernmental rurality-specific transaction cost of being organizations (NGOs), informal self-help economized explains the persistence of the ru- groups, etc. Again, it bears repeating that the ral development challenges throughout the TSOs’ self-provisioning nature means that their world. Indeed, transaction cost obviously exists core outputs are produced for own consumption in urban regions as well, but there it can be of their members. Crucially, this condition does relatively well economized by for-profit gov- not prevent TSOs from producing a portion of ernance mechanisms, ranging from market their outputs for sale in the market. through intermediate contracting to hierarchy. The proposed transaction cost explanation of It is precisely the relative absence of these gov- rural TSOs is evidently subject to the major ernance mechanisms in rural areas that gives qualification that not all transaction cost occur- expression to the numerous rurality-specific ring in rural areas needs to act as a constraint problems that are supposed to be alleviated by on the division of labor rather than as a factor the rural development policies. That for-profit of institutional choice among for-profit govern- governance mechanisms do not arise to econo- ance mechanisms, as assumed by the traditional mize on the rurality-specific transaction cost transaction cost theory. Rural areas, just like suggests that this cost is more appropriately urban ones, are marked by the existence of the conceived of as a constraint on the division of two distinct types of transaction cost acting in labor, rather than as a factor of institutional these two roles. Therefore, to the extent that choice among for-profit governance mecha- transaction cost acts as a constraint on the divi- nisms, as suggested by the traditional transac- sion of labor, it gives rise to TSOs as embodi- ments of self-provisioning; to the extent that it To the extent that transaction cost acts as a acts as a factor of institutional choice among constraint on the division of labor, it gives rise for-profit governance mechanisms, it may un- derlie the occurrence of any one of these, in- provisioning, which may take individual and cluding market, intermediate contracting, and collective institutional forms. The choice hierarchy. This distinction evidently applies to among these forms is primarily determined by both rural and urban areas. Explaining TSOs as production cost considerations, implying that a consequence of the transaction cost-induced the institutional form of collective self- self-provisioning thus contradicts neither the provisioning is chosen by rural dwellers for existence of the for-profit sector in rural areas governing those activities in which it yields a nor the existence of the third sector in urban production cost advantage compared to indi- areas, in which the extent of the division of la- vidual self-provisioning. Examples of activities Differentiating between the two distinct education, housing, health, access to retail in- types of transaction cost invites the question of frastructure, transport, and civic participation. these types’ relationship to each other. Central The rurality-specific deterioration in the quality to answering this question is Williamson’s [37, of rural life has been identified also in the p. 12] argument that the transaction cost United States, particularly in the work coordi-economized by governance mechanisms stems nated by W.K. Kellogg Foundation. Various from contractual hazards which, in turn, can be writers have argued that in the United States, attributed to the behavioral assumptions of rurality is often associated with the lack of af-bounded rationality and opportunism. Cru- fordable and adequate child care [18], weaker cially, the notion of contractual hazards implies economic development, lower per-capita in- the (pre-)existence of contractual parties. In- comes, limited employment and education op- deed, unless these parties exist, they cannot portunities [33]. The rural disadvantage often perceive contractual hazards and devise hazard- dictates the need in the enhanced provision of mitigating (i.e., transaction cost-economizing) social services which is a classic activity type governance mechanisms. In contrast, the trans- action cost acting as a constraint on the division Another strand of stylized evidence is based of labor determines the extent to which the po- on the empirical research by the National tential contractual parties come into existence in Council of Voluntary Organizations and by the the first place. Evidently, if transaction cost act- Countryside Agency in the UK. Conducted in ing as a constraint on the division of labor is 2001, this research encompassed collecting data prohibitively high, there can be only few con- on the scope and activities of TSOs in two UK tractual relationships and thus few contractual rural districts, Teesdale and East Northampton- hazards to be mitigated. Hence, the transaction shire [41]. It has been, in particular, found that cost effect of rural areas’ characteristics such as the TSOs’ activity levels in rural areas are con- sparse population, geographical dispersion, and siderable above the average national level. In- poor infrastructure, is appropriately seen not in deed, 5.6 TSOs per one thousand people have increasing contractual hazards but in reducing been identified in East Northamptonshire, and the number of economic units that might con- 10.8 TSOs per one thousand people in Tees- sider entering any contractual relationships at dale, whereas a comparable research by the UK all. Again, to the extent that there exist some Home Office in 1994-5 found an average rate potential contractual parties, they may consider of 2.6 TSOs per one thousand people in urban the relevant contractual hazards and devise the areas. Moreover, rural dwellers have been transaction cost-minimizing governance found to be significantly more likely to donate mechanisms belonging to the for-profit sector. time and effort to TSOs than people living in Some stylized evidence. The above transac-
urban areas. In East Northamptonshire, TSOs tion cost explanation of rural TSOs is a hypo- benefited from the unpaid work of over 8,451 thetical framework intended for guiding further individuals, which is equivalent to 113 unpaid empirical research. While the empirical testing workers per one thousand people; in Teesdale, of this framework is beyond the scope of the present paper, it is possible to cite a few styl- mately 4,963 volunteers, which is equivalent to ized facts lending indirect support to the pro- 198 unpaid workers per one thousand people posed argument. One strand of stylized evi- (ibid). These figures clearly contrast with the dence refers to the rural disadvantage, under- UK national average volunteering rate of 22 to stood as rurality-specific set of difficulties pre- 75 volunteers per one thousand people [ibid]. venting people from participating fully in soci- To be sure, these stylized facts per se do not ety, including poverty, lack of skills, and low constitute a proof of the effect of the rurality- levels of health [6]. A recent study by the specific transaction cost on the emergence of Commission of Rural Communities in the rural TSOs. However, they suggest that the ra-United Kingdom found evidence of several tionale for the emergence of TSOs may be types of the rural disadvantage in this country: more strongly characteristic of rural areas than disadvantage in personal finance, employment, urban ones, and this is consistent with the pro- posed argument. While the rural disadvantage respect, this view’s significance is twofold. On means greater space for mutual self-help initia- the one hand, this view explains how the tives, the data on higher volunteering rate in existence of rural TSOs can be causally related rural areas suggest that these initiatives are in- to rural areas’ characteristics. Specifically, deed being taken. Much more research is how- since these characteristics ultimately boil down ever necessary to clarify the complex causal to high rurality-specific transaction costs, and linkages between the rurality-specific transac- transaction cost represents a constraint on the tion cost, rural disadvantage, and the demand division of labor, TSOs as a form of self- provisioning is a natural consequence of these Implications for rural development characteristics. On the other hand, this view
research. In the rural development literature,
clarifies the logical relationship between the TSOs are recognized for their important contri- rurality-related and the other existing explana- bution to the development of rural areas [15; tions of the third sector by indicating that all of 26]. In the developed countries, the role of the these explanations ultimately seek to discover rural third sector has been recently enhanced by specific reasons for high transaction cost acting the shift ‘from government to governance’ as a constraint on the division of labor and thus involving the increasing transfer of causing recourse to self-provisioning in the responsibilities from the state to the private for- profit and third sectors [8]. In the developing Thus, the set of the economic theories of the countries, the contribution of the rural third third sector has to be supplemented with what sector has been appreciated primarily as a result may be called ‘the rurality theory’. This of relatively low effectiveness of both state-led theory’s major hypothesis would be that the and market-led policies of agricultural and rural rurality-specific transaction cost gives rise to development [12; 30]. Yet, in spite of their the emergence of rural TSOs. This hypothesis generally recognized importance, the would be subject to numerous potential theoretical understanding of the economic qualifications and refinements, which may rationale of rural TSOs has remained concern e.g. differentiating between individual unsatisfactory. Indeed, as the preceding section determinants of the rurality-specific transaction has shown, the major economic theories of the third sector have been developed with no regard to the rural context. While all of these theories analyze the way the third sector compensates for the limitations on the ability of for-profit differentiate between various types of rural firms to satisfy human needs, they do not ask areas’ institutional environment determining whether any such limitations could be caused by rurality of regions in which for-profit firms maintained in operation. Specifically, other are located. As a result, neither theory is more things being equal, TSOs may be hypothesized suitable to explaining the rural third sector than to be more present in those rural areas where bureaucratic obstacles to their creation and At the same time, as mentioned above, it has operation are less significant and where been long recognized that rural areas exhibit a informal institutions, such as social capital, are number of salient characteristics that result in supportive of local cooperation. It is also high transaction cost and thus impair the ability important to differentiate between different of for-profit firms to fully satisfy the needs of institutional forms of TSOs, such as agricultural rural dwellers [25]. Hence, rurality is a distinct and rural cooperatives, rural partnerships, determinant of the emergence of TSOs and thus community organizations, associations, NGOs, deserves to be integrated into the general and informal self-help groups, whose theoretical understanding of the third sector. occurrence is evidently caused by different The basis for this integration is laid by the determinants of rurality-specific transaction proposed view of the third sector as an cost. embodiment of self-provisioning; in this The work on developing the rurality theory areas). Hence, a comprehensive analysis of the of the third sector needs not, however, be relationship between these concepts requires confined to testing the above hypothesis in its identification not only of their direct logical various modifications. An even more links, but also of the effects of each of these comprehensive understanding of the rural third concepts on the way the other concept is related sector can be achieved by addressing to its relevant alternative, as shown in the explorative questions following from the Figure 1. The three logical components of the logical analysis of the relationship between the relationship between the concepts of the third concepts of the third sector and rurality. sector and rurality suggest three explorative Importantly, both of these concepts derive their questions that may guide the development of meaning from the contrast with their respective the economic theory of the rural third sector alternatives (the third sector is contrasted with market and state and rural areas – with urban Explorative questions of the economic theory of the rural third sector
The first question is concerned with role of the third sector and the futures of rural identifying the peculiarities of the intersectoral institutional choice in rural areas; the second – Concluding remarks. The proposed
with testing alternative economic theories of alternative transaction cost explanation of TSOs the third sector in rural areas (including both has been motivated by the need to take full the conventional theories and the proposed account of the specific institutional identity of rurality theory); the third – with comparing the the third sector as different from the for-profit structure and behavior of rural und urban TSOs. sector. Since the traditional transaction cost the- At present, it is not yet possible to formulate ory is concerned with the choice of governance precise hypotheses regarding how these mechanisms within the for-profit sector, ex-questions may be answered. This paper’s plaining the third sector in transaction cost argument about the effects of the rurality- terms calls for an alternative conceptualization specific transaction cost merely serves to of the notion of transaction cost. This expand the set of hypotheses to be tested in conceptualization is possible in the framework dealing with the second question, but it cannot of the theory of the division of labor, regarding foresee which of these hypotheses is more transaction cost not as a factor of choice among likely to be correct. Addressing these questions market, hierarchy, and intermediate contracting, will require both empirical and theoretical but as a constraint on the division of labor. It its research, which will undoubtedly yield many latter quality, transaction cost determines the new insights about both the socio-economic extent to which economic agents resort to self- provisioning rather than market exchange in order to satisfy their needs. Since self- Designated as rurality-specific, transaction cost provisioning has been shown to constitute a stemming from these characteristics evidently bottom-line characteristic of TSOs, the theory constrains the ability of the for-profit sector, of the division of labor captures the difference including market, hierarchy, and intermediate between the for-profit and third sectors as contracting, to satisfy human needs and thus ultimately embodying exchange and self- creates a niche for TSOs as units of self- provisioning. Further research is needed to The self-provisioning view of TSOs is well- operationalize this insight primarily by relating, suitable to explaining rural TSOs since rural both theoretically and empirically, specific areas, compared to urban ones, exhibit determinants of rurality-specific transaction characteristics increasing the cost of cost to specific institutional forms of TSOs in transacting, such as low population density, specific types of rural areas. geoprahical dispersion, and poor infrastructure. _______________________________________________________________________________
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Ⱥ.Ɇ. ɉɊɂɅɍɐɖɄɂɃ, ɫɬɚɪɲɢɣ ɜɢɤɥɚɞɚɱ
ȼɿɧɧɢɰɶɤɢɣ ɧɚɰɿɨɧɚɥɶɧɢɣ ɚɝɪɚɪɧɢɣ ɭɧɿɜɟɪɫɢɬɟɬ
ȱɧɫɬɢɬɭɰɿɨɧɚɥɿɡɚɰɿɹ ɡɟɦɟɥɶɧɢɯ ɜɿɞɧɨɫɢɧ ɹɤ ɭɦɨɜɚ
ɟɮɟɤɬɢɜɧɨɝɨ ɮɭɧɤɰɿɨɧɭɜɚɧɧɹ ɚɝɪɚɪɧɨɝɨ ɪɢɧɤɭ

ɉɨɫɬɚɧɨɜɤɚ ɩɪɨɛɥɟɦɢ. ȼɢɡɧɚɱɟɧɧɹ ɦɟ-
ɪɨɡɪɨɛɤɭ ɚɝɪɚɪɧɨɝɨ ɚɫɩɟɤɬɭ ɬɟɨɪɿʀ ɿɧɫɬɢɬɭ- ɬɨɞɨɥɨɝɿɱɧɢɯ ɡɚɫɚɞ ɞɨɫɥɿɞɠɟɧɧɹ ɩɪɨɰɟɫɭ ɰɿɨɧɚɥɿɡɦɭ, ɩɪɚɤɬɢɱɧɨɝɨ ɜɢɤɨɪɢɫɬɚɧɧɹ ʀʀ ɩɨ- ɫɬɚɧɨɜɥɟɧɧɹ ɣ ɪɨɡɜɢɬɤɭ ɚɝɪɚɪɧɨɝɨ ɪɢɧɤɭ ɧɟ ɥɨɠɟɧɶ ɡɞɿɣɫɧɢɥɢ ɬɚɤɿ ɜɿɬɱɢɡɧɹɧɿ ɜɱɟɧɿ, ɹɤ ɨɛɦɟɠɭɽɬɶɫɹ ɡ’ɹɫɭɜɚɧɧɹɦ ɬɪɚɞɢɰɿɣɧɢɯ ɿ ɫɭ- ȼ. Ⱥɧɞɪɿɣɱɭɤ, Ʌ. Ȼɨɣɤɨ [1], Ɉ. Ȼɨɪɨɞɿɧɚ, ɱɚɫɧɢɯ ɩɿɞɯɨɞɿɜ ɞɨ ɪɨɡɭɦɿɧɧɹ ɫɭɬɧɨɫɬɿ, ɮɭɧ- Ɇ. Ⱦɟɦ’ɹɧɟɧɤɨ [4], Ⱥ. Ⱦɚɧɤɟɜɢɱ [3], ȼ. Ɂɚɽɰɶ ɤɰɿɣ, ɦɿɫɰɹ ɪɢɧɤɭ ɜ ɫɢɫɬɟɦɿ ɤɚɬɟɝɨɪɿʀ ɟɤɨɧɨ- [5], Ɇ. Ɇɚɥɿɤ, ȼ. Ɇɟɫɟɥɶ-ȼɟɫɟɥɹɤ, Ȼ. ɉɚɫɯɚ- ɦɿɱɧɨʀ ɬɟɨɪɿʀ. ɇɢɧɿ ɨɫɨɛɥɢɜɨɝɨ ɡɧɚɱɟɧɧɹ ɧɚ- ɜɟɪ, ɉ. ɋɚɛɥɭɤ [11], Ɉ. ɒɩɢɤɭɥɹɤ [13] ɬɚ ɿɧ. ɛɭɜɚɽ ɞɨɫɥɿɞɠɟɧɧɹ ɿɧɫɬɢɬɭɰɿɨɧɚɥɿɡɚɰɿʀ ɟɮɟɤ- ɉɪɨɬɟ ɩɪɨɛɥɟɦɚ ɿɧɫɬɢɬɭɰɿɨɧɚɥɿɡɚɰɿʀ ɟɮɟɤɬɢ- ɬɢɜɧɨɝɨ ɮɭɧɤɰɿɨɧɭɜɚɧɧɹ ɚɝɪɚɪɧɨɝɨ ɪɢɧɤɭ, ɜɧɨɝɨ ɮɭɧɤɰɿɨɧɭɜɚɧɧɹ ɚɝɪɚɪɧɨɝɨ ɪɢɧɤɭ ɩɨ- ɚɧɚɥɿɡ ɡɦɿɫɬɭ ɿ ɯɚɪɚɤɬɟɪɭ ɞɟɪɠɚɜɧɨɝɨ ɜɬɪɭ- ɬɪɟɛɭɽ ɩɨɞɚɥɶɲɨɝɨ ɜɢɜɱɟɧɧɹ ɣ ɩɨɝɥɢɛɥɟɧɧɹ ɱɚɧɧɹ ɜ ɣɨɝɨ ɪɨɡɜɢɬɨɤ, ɩɨɫɢɥɟɧɧɹ ɜɩɥɢɜɭ ɬɟɨɪɟɬɢɱɧɢɯ ɩɨɥɨɠɟɧɶ, ɩɪɚɤɬɢɱɧɟ ɜɢɤɨɪɢɫ- ɪɢɧɤɭ ɧɚ ɜɡɚɽɦɨɡɜ’ɹɡɤɢ ɬɚ ɜɡɚɽɦɨɡɚɥɟɠɧɨɫɬɿ ɬɚɧɧɹ ɹɤɢɯ ɭɦɨɠɥɢɜɢɥɨ ɛ ɡɚɛɟɡɩɟɱɢɬɢ ɦɟɯɚ- ɦɿɠ ɚɝɪɚɪɧɢɦ ɜɢɪɨɛɧɢɰɬɜɨɦ ɿ ɫɩɨɠɢɜɚɧɧɹɦ ɧɿɡɦɢ ɮɨɪɦɭɜɚɧɧɹ ɪɢɧɤɨɜɨɝɨ ɫɟɪɟɞɨɜɢɳɚ, ɪɟɚɥɿɡɚɰɿɸ ɩɪɢɧɰɢɩɿɜ ɜɡɚɽɦɨɞɿʀ ɫɭɛ’ɽɤɬɿɜ Ⱥɧɚɥɿɡ ɨɫɬɚɧɧɿɯ ɞɨɫɥɿɞɠɟɧɶ ɿ ɩɭɛɥɿɤɚ-
ɰɿɣ. ɉɪɨɛɥɟɦɚɦ ɿɧɫɬɢɬɭɰɿɨɧɚɥɿɡɚɰɿʀ ɡɟɦɟɥɶ-
ȼɚɠɥɢɜɿɫɬɶ ɿɧɫɬɢɬɭɰɿɨɧɚɥɿɡɚɰɿʀ ɟɮɟɤɬɢɜ- ɧɢɯ ɜɿɞɧɨɫɢɧ ɹɤ ɮɭɧɞɚɦɟɧɬɚɥɶɧɨʀ ɨɫɧɨɜɢ ɧɨɝɨ ɮɭɧɤɰɿɨɧɭɜɚɧɧɹ ɚɝɪɚɪɧɨɝɨ ɪɢɧɤɭ ɩɨɹɫ- ɫɬɚɧɨɜɥɟɧɧɹ ɣ ɪɨɡɜɢɬɤɭ ɚɝɪɚɪɧɨɝɨ ɪɢɧɤɭ ɧɸɽɬɶɫɹ, ɧɚɫɚɦɩɟɪɟɞ, ɬɢɦ, ɳɨ ɚɝɪɚɪɧɢɣ ɪɢ- ɜɿɞɜɨɞɢɬɶɫɹ ɜ ɫɭɱɚɫɧɿɣ ɜɿɬɱɢɡɧɹɧɿɣ ɟɤɨɧɨɦɿ- ɧɨɤ ɫɥɭɝɭɽ ɿɧɞɢɤɚɬɨɪɨɦ ɫɬɚɧɭ ɧɚɰɿɨɧɚɥɶɧɨʀ ɱɧɿɣ ɧɚɭɰɿ ɡɧɚɱɧɟ ɦɿɫɰɟ. ɋɭɬɬɽɜɢɣ ɜɧɟɫɨɤ ɭ ɟɤɨɧɨɦɿɤɢ, ɜɢɡɧɚɱɚɽ ɨɫɧɨɜɧɿ ɩɚɪɚɦɟɬɪɢ ɠɢɬ- ɬɽɞɿɹɥɶɧɨɫɬɿ ɫɭɫɩɿɥɶɫɬɜɚ. ȱɧɫɬɢɬɭɰɿɣɧɿ ɡɦɿɧɢ ɩɟɪɟɞɛɚɱɚɸɬɶ ɧɟ ɥɢɲɟ ɡɚɦɿɧɭ ɿɧɫɬɢɬɭɬɿɜ

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