The main purpose of the study is to develop the model for transaction costs measurement in the Collective Waste Recovery Systems. The methodology of New Institutional Economics is used in the research. The impact of the study is related both to the enlargement of the limits of the theory about the interaction between transaction costs and social costs and to the identification of institutional failures of the European concept for circular economy. A new model for social costs measurement is developed. Keywords: circular economy, transaction costs, extended producer responsibility JEL: A13, C51, D23, L22, Q53