Abstracts: August 11th, 1998

Transaction Costs and Policy Network Theory

Hindmoor A
Public Administration, (UK), Spring 98 (76/1)
Start page: 25 No of pages: 19

Considers the value of transaction cost analysis for policy network theory, which is used to explain the relationship between government and other groups within the political community, such as pressure groups. Using the example of the negotiations between the UK Government and the British Medical Association (an association representing doctors) during the creation of the National Health Service in the 1940s, examines the trade-offs made by each side to gain the best deal possible in the new National Health Service. Analyses this in term of transaction costs to show the logic of the decision of the British Medical Association to co-operate with the National Health Service rather than reject it. Concludes that transaction costs analysis can be used to identify the strength of a pressure group, when negotiating with government over a policy, and can explain the relationships between the group, the government and other actors within the network, and the subsequent policy outcomes. Argues that trust is a key element in the policy networks, principally because it makes negotiation and exchange possible.

Subject(s): POLICY, NETWORKS, CENTRAL GOVERNMENT, PRESSURE GROUPS, NEGOTIATIONS, TRANSACTION COSTS, NATIONAL HEALTH SERVICE, BRITISH MEDICAL ASSOCIATION, UNITED KINGDOM
Database: TMA: Top Management Abstracts
Style: Theoretical with application in practice, Case study
Reference: 27AK470

Reproduced by permission of Anbar Management Intelligence
http://www.anbar.co.uk/management/home.htm