New Institutional Economists define transaction costs as the costs to define, establish maintain and exchange property rights. This definition, one among many, enables the consideration of the cost to create, use and move between institutions (Marshall, 2013; McCann, 2013). For a policymaker, transaction costs are the cost of time and effort invested in researching the problem, creating, implementing, administering, monitoring and enforcing the policy. For an individual engaged with or affected by the policy, transaction costs are the cost of time and effort invested in learning about and interacting with the policy. Transaction costs of the policymaker have been reported to range from 1 to 110 per cent of the government payments for farm payment schemes (Rorstad et al., 2007). For the private landholder, transaction costs have been shown to be up to 15 per cent of the total cost of being involved in a policy (Mettepenningen & Van Huylenbroeck, 2009).

'This is an excellent piece of work, applying the economic theory of property rights and transaction costs to the complex policy problems associated with water use in irrigation. Challen examines the determination of transaction costs and the way they interact with a realistic specification of property rights. He thereby avoids the two main defects found in much work in this area: first, the use of a simplistic division of property rights schemes, for example one based on polar categories of private property and common property, defined to mean open access, and second, a tendency to use the category of transaction costs as an unexamined "black box".' - John Quiggin, James Cook University, Australia 'A most encouraging trend in economics concerns the careful and non-teleological study of institutions. From an era in which institutions were completely ignored, through an era in which it was thought that institutions were mere constraints on otherwise beneficent behavior in markets, through an era in which it was thought that the purpose of institutions was to promote economic efficiency, we now seem to be firmly in an era in which it is understood that institutions are the very bedrock of economic and social interaction. The analysis of institutions will fall into incoherence if we insist on seeing them as teleological rather than as instrumental. Once there, we must still understand the purposes that different individuals and collectivities ascribe to particular institutional set ups. In this careful book Ray Challen offers clear conceptual guidance to the study of economic institutions. He also shows us how one can undertake the analysis of institutional choice. The problem setting is water resources in eastern Australia. The lessons are profoundly international, and the approach is refreshingly promising.' - Daniel W. Bromley, University of Wisconsin-Madison, US Conventional economic analysis of property rights in natural resources is too narrow and restrictive to allow for effective comparisons between alternative institutional structures. In this book, a conceptual framework is developed for the analysis of these structures with illustrative application to the allocation of water resources.

"The labor of nature is paid, not because she does much, but because she does little. In proportion as she becomes niggardly in her gifts, she exacts a greater price for her work. Where she is munificently benefi cent, she always works gratis." David Ricardo * This book interprets nature and the environment as a scarce resource. Whereas in the past people lived in a paradise of environmental superabundance, at pre sent environmental goods and services are no longer in ample supply. The envi ronment fulfills many functions for the economy: it serves as a public-con sumption good, as a provider of natural resources, and as receptacle of waste. These different functions compete with each other. Releasing more pollutants into the environment reduces environmental quality, and a better environmen tal quality implies that the environment's use as a receptacle of waste has to be restrained. Consequently, environmental disruption and environmental use are by nature allocation problems. This is the basic message of this book.

This title was first published in 2002. How expensive is environmental regulation and how does it affect the economy? A proper understanding of the costs imposed by environmental regulation is important for policy-makers and others concerned with regulatory design. This book focuses on empirical studies of the impact of environmental regulation on the economy, exposing the reader to a variety of estimation methodologies and datasets that have been used in this area. Three basic sources provide information on the costs of environmental regulation: surveys; engineering studies; and econometric analysis. This text draws on all three in its investigation.

Most people would agree that it makes sense to tax a company that pollutes in a way that directly reflects the amount of environmental and social damage it has done. Yet in practice, such taxes are fraught with difficulty and have far-reaching implications. A company facing a new tax may lay off workers, for example, exacerbating an unemployment problem. This volume focuses on such external issues and examines in detail the trade-offs involved in designing policies to deal with environmental problems. Reflecting the broad nature of the subject, the contributors include leading economists in the areas of public finance, industrial organization, and trade theory, as well as environmental economists. Integrating both theoretical and empirical methods, they examine environmental policy design as it relates to location decisions, compliance costs, administrative costs, effects on research and development, and international factor movements. Shedding light on an extraordinarily complex and important topic, this collection will be of interest to all those involved in designing effective environmental policy.