ABSTRACT
This chapter focuses on economic organization from a comparative institutional point of view in which transaction-cost economizing is featured. Comparative economic organization never examines organization forms separately but always in relation to alternatives. Transaction-cost economics places the principal burden of analysis on comparisons of transaction costs which, broadly, are the "costs of running the economic system". This chapter addresses the problem of organization as one of discrete structural analysis. The combination of fiat with low-powered incentives is a manifestation of the syndrome condition of economic organization. One objection to prior work is that the two stages of the new institutional economics research agenda the institutional environment and the institutions of governance have developed in disjunct ways. The chapter develops bilateral adaptation effected through fiat is a distinguishing feature of internal organization. It also supports to hybrid modes of contracting by neoclassical contract law. Classical contract law applies to the ideal transaction in law and economics' sharp in by clear agreement.
