Tools from the new institutional economics for reforming the delivery of veterinary services.

The new institutional economics offers a range of analytical tools and insights which can be used in restructuring the animal health services of a country. This paper discusses three of the most important--externalities, transaction costs and asymmetric (unequal) information. These tools can be used to craft a system which is sensitive to the particular institutional heritage of a country and to its political, social and economic realities. Institutions are important in this process and the best way for one society is often not the optimal choice for another.