INSTITUTIONAL TRANSACTION COSTS IN ADMINISTRATIVE INSPECTIONS OF ENTERPRISES
Keywords:
Administrative inspections of enterprises, Institutional transaction costs, New institutional economics, Administrative burdens, Risk-based regulationAbstract
Administrative inspections of enterprises perform important institutional functions by reducing information asymmetry, controlling public risks, and maintaining market order, but their operation also imposes costs on firms, government, and society. Drawing on new institutional economics, this article distinguishes necessary compliance costs from institutional friction costs and develops an analytical framework of total governance costs comprising firms' compliance costs, government enforcement costs, interagency coordination costs, and losses from regulatory failure. It finds that fragmented rule provision, departmental segmentation and data barriers, quantitative performance assessment, and liability avoidance jointly drive the emergence and accumulation of institutional transaction costs. Reform should therefore aim not to minimize the number of inspections, but to integrate rules, assess costs, classify risks, coordinate joint inspections, reuse data, recognize results across agencies, and recalibrate incentives so as to reduce unnecessary burdens on firms while improving regulatory effectiveness.References
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