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Journal of Public Administration Research and Theory, Vol. 3, No. 1: 11-45 (1993)
© 1993 Public Management Research Association

research-article

Analyzing the Performance of Alternative Institutional Arrangements for Sustaining Rural Infrastructure in Developing Countries1

Elinor Ostrom, Larry Schroeder and Susan Wynne

Indiana University
Syracuse University

This paper, which draws on principles from the new institutional economics and institutional analysis, argues that a principal underlying cause of the lack of sustained rural infrastructure investments in developing countries is the set or sets of perverse incentives facing participants in the development and operation of such facilities. The analysis examines the intermediate transaction costs of providing and producing public goods under six different institutional arrangements, each of which creates a different set of incentives for the many actors involved in the design, construction, finance, operation, maintenance, and use of rural infrastructure. By considering a full set of intermediate transaction costs and a wider array of institutional arrangements, analysts can become aware of the tradeoffs involved and may more likely identify those alternatives that yield genuine net cost reductions.


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