Economists struggle with predicting what makes an institutional arrangement successful for market access in Africa. According to New Institutional Economics theory, the rational farmer will chose to engage in the institutional arrangement that is best performing in minimizing transaction costs, or that create order in the economy. Yet, failures have been reported of projects that typically had potential to reduce transaction costs such as contract farming, group farming, cooperatives and associations. In this essay we use two case studies (group markets for non timber forest products in Cameroon and sales of Nile perch from Lake Victoria in Kenya) to illustrate that in order to be successful, new institutional arrangements should address the particular challenges of the people concerned and the vicious poverty circles that many of them are caught in.
