Through a model of repeated bargaining between a buyer and a seller, with changing private information on both sides, this paper addresses questions of eciency and institutional structures in dynamic mechanism design. A new technical device in the form of a history dependent version of payo equivalence is established. A new notion of interim budget balance is introduced which allows for the role of an intermediary but with bounded credit lines. We then construct a mechanism, which provides a necessary and sucient condition for eciency under interim budget balance. The existence of a future surplus can be used as collateral to sustain eciency, and its size determines the possibility. The mechanism also oers a simple and realistic implementation. A characterization of ecient implementation under ex post budget balance is also provided. Further, a characterization for the second best is presented, and its equivalent Ramsey pricing formulation is established. A suboptimal, but incentive compatible mechanism for the second best with intuitive properties is presented. When property rights are uid, that is, the good can be shared, a folk theorem with a simple mechanism is constructed.