Law, transaction costs and Coase’s institutions : A reappraisal

The main contribution of Coase1 is having proven that no institution is a free lunch (among others, Pagano, 2012). it means that every institution (e.g. the market and the firm) has non-null costs of functioning, i.e. transaction costs. in a world with positive transaction costs, the policy-making process has to rest on a meticulous comparative analysis of alternative institutional arrangements. in this respect, ronald Coase has de- fined and developed a theory of choices among institutional solutions. The aim of this brief work is to highlighting, therefore, the strict correlation among transaction costs, institutions and law.