Article: "Institutions" by Douglas North

3. On pp. 99-100 North describes "two distinct transaction cost problems" that long distance trade entails: agency problems and contract enforcement. What is the difference between these two?

4. On p. 101 North writes: "The technology associated with the growth of manufacturing ... required effective factor and product markets." He then goes on to write: "Undergirding such markets are secure property rights." Describe in more detail why property rights are important to "effective factor and product markets," and why this is contrasted with the case of "local exchange within the village" described on p. 99. In other words, why are secure property rights more important for the growth of manufacturing than they are for an economy characterized by local production and exchange within one village?