A New Institutional Economics Approach to Contracts and Cooperatives

This article discuss about agricultural cooperatives capital structures with the New Institutional Economics Approach, in particular the Transaction Cost Economics point of view. At the end, it is possible to conclude that the cooperative enterprises, as a consequence of the financial and social structure governance costs, present a wider structure of transaction and agency costs, when compared with other forms of business organization. Our objective in the above discussion is to advance a conceptual framework using new institutional economics theories that draws attention to the importance of the organizational structure of contractors for the design of the proliferation of contracts increasingly governing agricultural production. Understanding the interplay between organizational form and contract structure is a necessary step in understanding why and how contracting is occurring, where and when it does. This article also shows that Transaction Cost Economics theory is an efficient tool to explain the organizational capital structure and the micro-analytical details not yet appreciated by the usual analyses. DOI: 10.5901/mjss.2013.v4n9p6