Organizational Economics Research in the U.S. Agricultural Sector and the Contracting and Organizations Research Institute

Abstract

Organizational and contract economics have achieved an increasingly important role in analyses of the food, agribusiness, and agricultural sectors. In particular, formal theoretical models of contract design and firm integration have begun to appear in the leading agricultural economics journals. Although the introduction of organizational economic theory has allowed scholars to begin addressing the changing nature of the food, agribusiness, and agricultural sectors, empirical research in these sectors is less well developed. What empirical research does exist tends to focus on specific contracts or transactions in isolation of the surrounding economic and institutional environments, or to be based on limited samples of unique contract types. Despite recent advances, much work remains. We believe this future work will be characterized by three features: a continued accumulation of empirical studies of contract design and organizational structure, an increasing focus on the interdependencies between organizational and contract structures linking the overall value chain, and an increasing integration of theories from a variety of social science disciplines. This suggests a need for an accessible collection of contracts as data for these studies, a more holistic theory of economic sectors as systems rather than series of discrete blocks, and a forum for interdisciplinary interaction whereby the cross-fertilization of ideas across disciplines might occur more rapidly. In this paper, we argue the importance and value of these features to advance both theory and empirical research, and illustrate how they are being addressed and incorporated in current research programs at the Contracting and Organizations Research Institute.