Escobal, J. (2007). The role of public infrastructure in lowering transaction costs. En E. Bulte y R. Ruben (Eds.), Development economics between markets and institutions: Incentives for growth, food security and sustainable use of the environment (pp. 45-71).

This chapter analyses the impact of transaction costs for rural households’ welfare, devoting attention to the causes and implications of the lack of spatial and vertical integration of product and factor markets. Based on an innovative procedure for a disaggregated analysis of the transport, information, negotiation and monitoring costs of farmers incorporated in the potato market of Peru, the study shows that public infrastructure is vital for lowering transaction costs for reaching market outlets and establishing transactions in those markets. Lowering transaction cost enables specialization and division of labour and hence is a driving force for improving efficiency and income generating opportunities for the rural poor