Social scientists have written extensively about the
relationship between the state and non-state entities. By
largely assuming a hierarchical relationship, however,
the literature often failed to take into account changes
that are taking place in the society in the post-NPM era.
Campbell and Lindberg (1990) point out that most of
the literature were pre-occupied with showing how the
state intervenes in the economy by allocating key
resources, such as financial capital, to influence the
actions of market participants that often missed the
transformation issue. Such dichotomy was influenced by
prominent writers including Williamson (1985) who
was a pioneer in the analysis of governance based on
transaction costs. He made noted contributions to the
study of governance by applying transaction-cost economic
concepts to workings of markets and hierarchies.