When dealing with economies in transformation, it becomes evident that the transaction cost economics prediction that governance is solved in a transaction-costs-minimising way has to be complemented with the possibility that human attributes that are at the basis of this prediction may be different from those typical of a competitive market economies. The concept of the budget constraint considered as a behavioural variable determines the nature, level and composition of transaction costs and through these the effective organisational governance solution. This in turn defines the features that corporate governance should have to avoid conflicts within the organisation and provide credible protection and incentives to the actors that implement non-contractable specific investment. This fact opens the way for the co-existence of different systems of organisational and corporate governance in different countries and opens the possibility to of analysing the comparative efficacy of alternative forms of organisational and corporate governance in countries in transformation.
