Coase

Nobel Prize in Economic Sciences

1991
Ronald H. Coase

RONALD H. COASE for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy.

Ronald H.Coase (1910-) studied for the Bachelor of Commerce degree at LSE from 1929-32 and was a member of LSE Staff from 1935-51. (From 1940-46 he worked for the government, performing statistical work during the war.) He spent the academic year of 1932-33 on a Sir Ernest Cassel Travelling Scholarship in America where he visited American businesses and factories and studied the organisational structure of American industry. The consequence of his study was a new concept of economic analysis, transaction costs, and the reasons for why firms exist. This article, together with The Problem of Social Cost (1961) (where arguing from property rights he concluded that transaction costs are never zero, allowing him to account for the institutional structure of the economy), made the breakthrough in economic science that led to his award of the Nobel Memorial Prize in 1991.