Transactions costs in rural decision-making: The cases of funding and monitoring in rural development in England

Public domain decisions in rural England have become more complex as the number of stakeholders having a say in them has increased. Transactions costs can be used to explore this increasing complexity. The size and distribution of these costs are higher in rural areas. Grouping transactions costs into four - organizations, belief systems, knowledge and information, and institutions - two of the latter are evaluated empirically: growth in the bid culture, and monitoring and evaluation. Amongst 65 Agents of Rural Governance (ARGs) in Gloucestershire, both were found to be increasing over time, but those relating to finance were a greater burden than those of monitoring: the latter can improve ARG performance. Increasing transactions costs in rural decision-making appears to be at variance with ambitions of achieving 'smaller government' through, for example, the Big Society. Smaller government is likely to be shifting the incidence of these costs, rather than reducing them. © 2011 Blackwell Publishing Ltd