2018 Vol. 10 №2

Reforms of natural monopolies need clear delineations between the industries where market mechanisms contribute to social welfare and those where the costs of a transition to a market economy outweigh the benefits. In this article, we emphasise the difficulty of finding the optimum modes of governance within industries as a whole. Using the tools of the transaction cost economics, we show that, alongside the problem of market boundaries and the resultant position and behaviour of a company — an object of antimonopoly regulation — it is necessary to consider the hypothesis about the market being a special mechanism for coordinating interactions between economic entities. In particular, such determinants of transactions as asset specificity, uncertainty, and frequency can create a basis for abandoning the price mechanism. Williamson’s heuristic models suggest that if an activity is characterized by high specificity, uncertainty, and frequency, the very organisation of this activity precludes transaction cost minimisation through the price mechanism employed either in full or in part (hybrid institutional agreements). This can be explained by excessive risks and ensuing high transaction costs. A more efficient solution is the organisation of interactions within a group of legal entities in control (within a single economic entity). In order to compare the practical implementation of institutional alternatives, we examine the modes of governance in the gas supply industry. A major focus is the Baltic region where two interconnected pipelines — the Nord Stream and the OPAL — were constructed. Different ways to handle transactions relating to gas supply were employed at the time. We compare these ways and conclude that it is necessary to consider the determinants of a transaction to select the best structural alternative and to avoid choosing a wrong governance structure.

Over the past three decades, researchers across different disciplines have paid close attention to the development of platform markets — an emergent long-term trend in economic policy. I consider platform markets as institutional and technological systems. Platforms create systems of rules and mechanisms that stimulate agents to adopt, maintain, and improve standards disseminated by the most successful platforms. Similarly to economic zones and clusters, platform markets are two-factor mesoeconomic systems. In this article, I consider the differences between two-factor systems and traditional one-factor groupings (agglomerations, industries, and conglomerates). I present a general theoretical framework for studying two-factor mesoeconomic systems, which is employed in a comparative analysis. A specific feature of platforms is the contribution of digital technology to the formalisation of relevant external effects and institutions, whereas economic zones are characterised by the external effects of agglomeration and clusters — by locally specific effects. Platforms are replacing economic zoning and clustering on the research agenda.