This chapter reviews the existing literature on transaction cost economics (TCE) to provide a theoretical framework to compare the process efficiency of various governance structures of China’s “Linkage” project implementation. Building on Coase’s foundational work and Williamson’s governance theories, this chapter examines how this institutional diversity navigates the tension between market mechanisms and hierarchical control in land governance. The analysis reveals that while the policy successfully reduces direct expropriation costs through TDR, it introduces new transaction costs related to quota valuation, intergovernmental bargaining, and rights enforcement. Comparative institutional analysis of three governance models (government-dominated, market-invested, and villager self-organized) is needed to identify their respective application conditions. This chapter than argues that no single structure dominates; rather, their effectiveness depends on local transaction attributes (asset specificity, uncertainty, frequency) and institutional contexts (property rights clarity, enforcement capacity).