New institutional economics as a tool for improving transaction governance in the Polish fruit sector

It was expected that price liberalisation and privatisation in transition economies would spontaneously result in the necessary institutions that underpin Western market economies. However, these institutions are not developing as expected. The objective of the paper is to understand why these institutions are not developing in the Polish fruit sector. It mainly focuses on transaction cost economics and its link with economic development. Based on interviews with all participants in the Polish fruit chain, hold-up problems are identified and solutions proposed.