This paper intends to discuss the effect of social and institutional mechanisms in allowing network governance embedded in non‐contractual and social relations to emerge and persist.
Building on the extant theoretical literature on network governance of varied research strands and drawing empirical observations from research on East Asian network governance, the paper explores the effect of social and institutional mechanisms in allowing network governance embedded in non‐contractual and social relations to emerge and persist.
It is argued that social and non‐contractual mechanisms reinforce, substitute, or undermine contractual mechanisms, but the degree to which this occurs is contingent on institutional environments in which transaction occurs.
The paper revisits some of the important theoretical concepts such as trust and social capital that have been invoked across divergent literatures so as to illuminate underlying factors of economic governance based on social relations and networks.
