ABSTRACT
‘The organisation of industry’ (Richardson 1972) describes an industrial system that consists of direction within firms, inter-firm co-operations and market transactions. Such an organisation may be considered as a framework for the analysis of what has been called the ‘institutional structure of production’ (Coase 1992), i.e. the division of productive co-ordination among different kinds of institutional arrangements. The theory of industrial coordination proposed by Richardson is not simply another criticism of the theory of industrial organisation to be inserted in a transactional framework; this criticism proposes a new explanation of the organisation of industry, an explanation endowed with a greater empirical content. Indeed, the last footnote in Richardson’s article tells us that the theory provided in this paper ‘might be taken as giving content’ (Richardson 1972: 896, fn 1) to the Coasian theory of the boundaries of the firm, this being revealed by introducing an explicit distinction between inter-firm co-operation and market transactions as modes of co-ordination.
