European Journal of Law and Economics

, Volume 27, Issue 1, pp 79–99 | Cite as

The ‘make or buy’ decision in private environmental transactions

  • Douadia Bougherara
  • Gilles Grolleau
  • Naoufel Mzoughi


A theoretical framework combining the two branches of TCE, i.e., the governance branch (Williamson 2005) and the measurement branch (Barzel 2005) may explain the choice of the governance structure for private environmental transactions. Four case studies, i.e., the market for pure air in polluted cities, the contractual arrangement between La Esperanza and the Monteverde Conservation League, the case of the French mineral water bottler Vittel and the case of land ownership by land trusts are briefly developed in order to support the theoretical framework. Special attention is devoted to the presence (or not) of a 3-D (defined, defended and divestible) property rights system in interaction with the juridical system (civil law vs. common law) and its influence on the way environmental property rights are likely (or not) to be re-arranged. Lessons and policy implications are drawn in order to foster research on these challenging issues.


Property rights Environmental transactions Measurement Transaction-cost economics 

JEL Classifications

D23 K32 Q58 



We are particularly indebted to Gary Libecap, Laura McCann and Bruce Yandle for their helpful comments and suggestions. We are also thankful to Christophe Déprés, Robert H. Nelson, Dominnic Parker, Luc Thiébaut, participants of the 42nd congress of the Association des Sciences Régionales De Langue Française (ASRDLF), Sfax, 4–6 September 2006 and participants of the 10th annual conference of the International Society of New Institutional Economics (ISNIE), Boulder, 22–24 September 2006 for their comments. The usual disclaimer applies.


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Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  • Douadia Bougherara
    • 1
  • Gilles Grolleau
    • 2
  • Naoufel Mzoughi
    • 3
  1. 1.INRA SAE2RennesFrance
  2. 2.Montpellier SupagroMontpellierFrance
  3. 3.INRAAvignonFrance

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