In: Anthropology and insttutionelEconomics. James
‘Acheson, ed. Pp. 69-88. New York: University Press of
‘America, 1984
Transaction Costs Through Time:
The Case Of The Orma Pastoralists
in East Africa
Jean Ensminger
Tnstitions mater to new ietsonal eonomists because they dey fee
operation! They are ou informal noms of behavior and the formal rles
ty which we live: they a8 prediabllity to human bebwvior, Besase
fnsittions ae! the level of cooperation in soci, they affect he gains we
fan resp by sch cooperation, which ultimately affects the economic
performance of society. ‘The outcomes that rest ffm different istiaronal
‘Erangements may serve ssc individual, or special intrest groups, end do
fot necessary serve te needs or best nests of sockty as «whole, tn ote
‘Words, goverment do pot always behave in ways that promote beter
Teonomie performance, For ther own reasons, pope inthe position to exe.
pressure on institutions may not push for changes that ae god for soeey as
bole, bu tbe, fr changes tht shit distbuton in thei vor Knight
1992, Ran 1989), Neverthe, somatines goverment make instal
changes that do yield economic bent, though these may be far fom
‘ptm, and by no meats equally share This is one such story0 Antespolegy dod nttatonal Ezonries
‘One way la which iatons mater wo the exonomy Hs by afetng the
ost aspen with exchange of all sors Since Adam Sot, economists
ave argued tat exoomie growth stems fom the gals fom Wade and
Increasing specialization and division of lor. In ater words, ifone group
fan rave cate more cheaply tan its neghber, which ean rage le more
theaply—they may both be beter off specializing and exchanging. ‘The insight
‘Som trnsction cots economics is tht sch exchange may no be ose
‘tthe transaction costs eat up alte cavinge Som specalizton. ‘Transtcton
ost include the ena of gathering information, negotiating, monitoring, and
foforcing property rights ad convarts. These are cared whenever people
try to measure the prices end quality of te goods and eves that they Waa,
to monitor the performance of employes, to Gnd tnding purines, orto
sforee property righ and concn, When tasartion conte are high they
ferve ae disincentive to exchange.
In the smile sociaies typically sided by anthropologist, most,
exchange occas among people knew to each other, and oe linked trough
tumerous cos-cuting Ses’ As the subsanivit conomie snliropolgiss
(ofthe 1950s and 1960s (ee especially Polanyi 1948 and Dalton 1967) so wel
alte, and Oranovetr (1985 and 1991 has recenly elaborated, economic
Feltons are embodied sn social relations in evch societies. Trust my be
test and exchange isles of @problan within the danain of one's own
Fosity and newark, Test (bed in pr op reise information
‘out reputtions) and cross-cutting es ha falta eferement (should a
tare breach of conte eos), contribute to lowering irsscton cst in such
Problems typically arise in the developing world in the process of transition
to lager spheres of exchange whee individuals mst del with peeple outside
‘hei own etnic group, ofa inexchange relationships with no repest dealing.
Under such creamsances altogater diferent instiutons must be estblished
to rote information costs, ensre tat, and provide rable enforcement
‘mechanioms that help ensue the sanctity of comuacs. Que ofthe important
funcons of sates isthe supply of stitions that are recognized by the many
subpopulations tht make up the sta, This is eapctaly erica! fr acw
States tn Aca which ae made up of as many as sveral hundred receatiy
atoomeus soci with unique iaionsl sacs. But governments
antot ui the instintonl srucure by fat. While govermens can contol
the form codes of Behavor-traugh the executive, the leislanre, and he
{dciarythere lone donot ene low sation coat. Also important a
‘oop’ ise about the jus ofthe formal code and the means by which
‘Traction Cot Throw Tie n
itis eafoced, as well ashe patem of informal bubavor, which may change
{ar more slowly thn the feral ode (North 1993). Where sae nsutons
ae found wanting inte eyes ofthe popultion, 1 leptimacy problem arses
‘har may seriously undemsine the system and ring sch diconinty erweea
the form and informal noms of behavior that unpredictably I lncresed
tnd high eansactioneass result (Gee Comell and Kalt 1989)? The sate may
tlk have to wea "go slo proces in the gradual take-over of enforcement
Inechanisns If desires to main legitimacy (Noch ne).
Te this paula paper Iam not dressing the sopply of instuionsl
changes offered by the sate. Thats 1am aot examining Why some measures
‘ware enaciad by the government of Kenya snd not thee (for such a