Korean waste management and eco-efficient symbiosis – a case study of Kwangmyong City

Abstract

This case study analyzes the main sources of transaction costs in managing municipal solid waste, and evaluates how they have affected waste management practices at the local level in South Korea. State-of-the-art technology and a new paradigm for the next generation waste treatment require us to build a sustainable ecological community that is basically managed from the bottom up by decentralized and interdependent actors. The involvement of numerous autonomous actors and their diverse interests signifies that reaching an agreement on eco-efficient symbiosis is proportionately difficult. Transaction costs, which include information gathering, administrative, and other costs associated with negotiating and implementing agreements, provide a conceptual framework for analyzing the economic and organizational challenges of eco-efficient waste management. The typical sources of transaction costs that South Korean municipalities frequently face are analyzed: uncertainty, negative externality, gap between long run and short run effects, and moral hazard.