Transaction Cost Analysis of the Division of Powers between Central and Local Governments in Taiwan
Date Issued
2011
Date
2011
Author(s)
Kao, Lin-Tai
Abstract
The division of powers between central and local governments is one of the major issues when discussing functions of government, and it anything but easy. By applying the transaction cost approach, this study aims at figuring out the main factors which decision makers are influenced by, and establishing a model which is used to estimate the division of powers between central and local governments.
Based on Transaction Cost Economics and Transaction Cost Politics, this study assumes that decision makers may determine the division of powers by economic rationale or political rationale. The former includes asset specificity, frequency and uncertainty; the latter includes types of public policy, political party ideology, election year, focusing events, budget autonomy, and interest groups. Further more, the study attempts to operate and test the model by employing the Port of Kaohsiung as a case.
It concludes that the calculation of economic and political transaction cost of decision makers in this case are mainly influenced by two economic rationale factors: asset specificity, frequency; and four political rationale factors: political party ideology, election year, budget autonomy, and interest groups. It suggests that controversy about the division of powers could be solved through the model by following methods: distinguish the difference between economic efficiency and political efficiency that decision makers pursue; realize the ins and outs of the event and the last, explaining logic of actions of related stakeholders.
Subjects
the division of powers between central and local governments
transaction cost approach
Port of Kaohsiung
Type
thesis
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