Transaction Costs, Market Failures and Economic Development

  • Tamara TODOROVA Department of Economics, American University in Bulgaria


This paper relates economic development to transaction costs. It reveals the triad transaction costs-market failure-economic underdevelopment. Many scholars attribute the problems of development to the failure of markets to perform their role of resource allocation. Some deny market failure and blame government instead. Of those who trace the roots of economic backwardness to market failure, few, if none, investigate transaction costs in their linkage with market failure. This paper tries to bridge development economics with transaction cost theory and new institutional analysis.


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How to Cite
TODOROVA, Tamara. Transaction Costs, Market Failures and Economic Development. Journal of Advanced Research in Law and Economics, [S.l.], v. 7, n. 3, p. 672-684, aug. 2016. ISSN 2068-696X. Available at: <>. Date accessed: 14 apr. 2024.
Journal of Advanced Research in Law and Economics