The theory of induced innovation says that technological innovations which economize on relatively scarce inputs will be invented and adopted. Hayami and Ruttan have hypothesized that this model also holds for institutional innovations. Williamson suggests that economic organization, such as vertical integration, is the result of transaction cost minimization. Coase discusses the transaction costs of negotiation versus the court system to solve externality problems. These various threads of the literature are brought to bear on the issue of innovations over time in relation to the National Native Title Tribunal. Mining companies have developed guidelines for negotiation with Aboriginal claimants. In Western Australia, regional agreements have been created which have the potential to greatly reduce transaction costs compared to negotiations between individual claimants and other agents such as mining companies. In addition to the reductions in transaction costs from a negotiated settlement rather than litigation, there are other advantages of negotiation, whether bilateral or regional. These include improved “quality” of settlements, improved relations between the negotiating parties, and more timely resolution.