Since 1992, the European Union protects names of regional foods as Protected Designation of Origin (PDO) or Protected Geographical Indication (PGI). Besides direct benefits such as higher prices or the protection from unfair competition, researchers and rural development agents emphasize the indirect benefits resulting from an intensified interaction of producers, processers and retailers during the registration process. Based on a comparative case study in Austria, this paper analyses the relation of transaction costs and transaction benefits associated with the registration process of two PGIs. Whereas one case was based on extensive outsourcing to a private consultancy (for just under 50,000 Euro + 160 working hours invested by the producers over 3.5 years), the other one was mostly the result of extensive personal contributions of the regional producer group (2,000 hours over ten years) who were assisted by the state extension services (Chamber of Agriculture, additional 1,000 work hours). The comparative case study does not give any indication that outsourcing necessarily bears the risk of diminishing indirect benefits, such as social capital building, intensified co-operations with other rural sectors, higher awareness of and compliance with quality standards. This does not mean that there is no positive relation between transaction costs and transaction benefits but it emphasizes that there are more and less efficient processes.


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