Act East Policy and Northeast India: The Role of Transaction Costs

  • Bhagirathi Panda


Although the states in Northeast India were created on ethnic lines, today the developmental imperatives require that they have to emerge as a single economic entity. The region is yet to emerge as an integrated economic entity and the success and effective continuity of the AEP depends on reducing the transaction costs by emerging as an integrated economic unit. This is contingent on, inter alia, linking up with the expansion in the livelihood and employment opportunities which depend on the emergence of a strong regional and local economic base led by networked industry and a high end services sector. This finally is dependent on reducing the present level of high transaction costs which includes issues of property rights, transport costs, law and order, governance, rent seeking and corruption.


Transaction cost Complementarities Economic integration Northeast 


  1. Cheung, S. N. S. (1969). The theory of share tenancy. Chicago: UCP.Google Scholar
  2. Coase, R. (1937). On the nature of the firm. Economica, 4, 386–405.CrossRefGoogle Scholar
  3. Coase, R. (1960). The problem of social cost. Journal of Law and Economics, 3, 1–44.CrossRefGoogle Scholar
  4. De, P., & Mazumdar, M. (2014). Developing cross-border production networks between North Eastern Region of India, Bangladesh and Myanmar: A preliminary assessment. New Delhi: RIS.Google Scholar
  5. Murphy, K., Shleifer, A., & Vishny, R. (1993). Why is rent-seeking so costly to growth? American Economic Review, 83(2), 409–414.Google Scholar
  6. NEC. (2007). Northeastern Region: Vision 2020. Shillong: North Eastern Council (NEC), Ministry of Development of North Eastern Region.Google Scholar
  7. North, D. (1990). Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  8. Saravia, S., & Dietrich, M. (2006). Emergence and impact of transaction costs in developing economies: The case of the Nicaraguan coffee industry during the Sandinista regime (1979–1990). Sheffield: University of Sheffield.Google Scholar
  9. Sarma, A. (2006, June). The North-East as a gateway to Southeast Asia: Big dream and home truths. Man and Development, pp. 35–50.Google Scholar
  10. Williamson, O. E. (1975). Markets and hierarchies: Analysis and antitrust implications. New York: Free press.Google Scholar
  11. Williamson, O. E. (1985). The economic instituions of capitalism. New York: Free press.Google Scholar
  12. Williamson, O. W. (1991). The nature of the firm: Origins, evolution, and development. Oxford/New York: Oxford University Press.Google Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Bhagirathi Panda
    • 1
  1. 1.Department of EconomicsNorth Eastern Hill UniversityShillongIndia

Personalised recommendations