- Emphasis added.
- Such as the complete command economy (a vanishing species today, with Cuba perhaps its only surviving example) and the ideal "perfect" market (the real existence of which anywhere is still debatable)
- Including many planners and planning theorists; see e.g. Friedmann (1987: 38) and Sanyal (2000: 326-332).
- Defining planning is really quite complex: the term can be understood in its broadest sense to range from evolutionary biological adaptation through individual to social activities (Alexander, 1992.a: 69-74), and has social and practical connotations (e.g who are recognized as professional or expert planners) that vary across cultures (Alexander, 2000).
- Indeed, in one view the firm exists to plan: the critical incentive for the evolution of firms is the need to respond efficiently to the market's signals, requiring "decision making (that is) coordinated ex-ante in firms" (Hermalin, 1999: 104); ex-ante coordination, of course, is planning (March and Simon, 1958: 158-169).
- This section is a condensed summary based on Alexander (1992b, 2001a).
- Some sectors, e.g. human services, where most of the planning is done in government agencies, Quangos or NGOs, are an exception.
- For a more extended description and examples, see Alexander (1998).
- This does not mean that planning is identical to organization. Association means that where there is formal organization, there is likely to be planning too, because organizations rarely improvise or take unplanned actions.
- This section is a condensation of Alexander (2001a).
- Obviously, this model is invalid in command economies (e.g. Cuba) and traditional societies (e.g. Mali) where land is a common resource and private property is an exception to the norm. It is also only true to the degree that economic and property rights are subject to the rule of law. Where this is not so (e.g. in kleptocracies like Mobutu's Congo or Marcos' Philippines) or in transitional economies like Russia and China) land development may look quite different. But the model can be modified (as it must be in any case) for mixed economies to reflect specific aspects of non-market type property rights, such as ejido (communal) landholdings in Mexico, or state-owned (and leased) lands in Israel, Hong Kong, and Malaysia.
- This is illustrated for the case of Israel (Alexander, 2001b).
- As a result the property market is also modified with various forms of bilateral governance, e.g. arbitration, and third-party governance including landlord-tenant law and regulation of real-estate transactions.
- Net transaction cost minimization seems on its face just another form of efficiency, and other effectiveness criteria are certainly possible. But it can be an effectiveness indicator, supporting other values than simple economic efficiency. For example, if the analysis is not limited to directly involved actors, but extended to include all the relevant stakeholders and their direct and indirect transaction costs, then minimizing overall net transaction costs may enhance democracy and participation. This is because the summary criterion will then include the positive and negative (saved) transaction costs of their inclusion or exclusion from the relevant process.
- They were both selected from Volume 3 only (and not from all past Planning & Markets issues) because that is the first issue that came to my attention, and they were the first articles I read. After reading additional papers I decided to use these and not extend my review, because they served as illustrations as well as any others.
- Some intervening variables (e.g. population increase and building density) are addressed, but others are summarily dismissed, and no hypotheses regarding possible alternative contextual factors are systematically tested. Though this undermines confidence in the findings' significance, no Monday-morning quarterbacking methodological critique is intended here.
- Discussion of why the observed results occurred explicitly focuses on policy-relevant theoretical explanations.
- Of course, it's not impossible: there is plenty of excellent policy-related research to contradict this statement. To cite only one (almost randomly chosen) study addressing a very similar kind of problem: Hellan and Tabarrok's (2000) "Runaway Judges" analyzing jury awards in tort trials. They did present and evaluate the feasible alternative: judges. Their rigorous empirical statistical analysis of over 86,000 trials and settled cases evaluated what happened: win rates and awards, explaining the outcomes in terms of a wide range of possible factors: from sample selection (types of cases) to local poverty rates, and coming to the incontrovertible conclusion that reform by putting all damages cases before judges will hardly have any perceptible effects.
- On its face, this suggestion is counterintuitive: firms are much more likely to save on avoidable safety measures so as to minimize their costs, than they are to invest in them in order to satisfy customers and maximize revenues. Of course, highly image dependent enterprises like the cited cases would reverse this rule, but extensive experience in related fields (such as environmental pollution externalities and worker-safety regulation) confirms it. In this study, this assertion could have been tested.
- This could have included a systematic evaluation of the kind of market-based voluntary self-regulation he describes, and the expected consequences of other market-regulatory incentives such as insurance.
- Though the article's conclusion implies an effectiveness criterion of contributions to reducing congestion, no such evaluation was systematically done. The discussion of each alternative produces a "soft" assessment of its relative effectiveness.
- In the paper the discussed options are not clearly differentiated by mode and ownership. The rail systems are all public, and privatization is not explored (for good reason, given the mode's obvious drawbacks). But bus transit might be public or private, and it is conceded that public bus transit is still more effective than rail. HOT lanes are a market-based alternative, to the extent that they rely on automobiles. But they are also a public policy intervention, and would not be market-based to the extent that they provide dedicated lanes for public busses (to which the paper also refers). Specifying a set of clearly differentiated alternatives in a matrix combining different modes with different forms of ownership (perhaps also distinguishing between infrastructure and rolling stock/operation) might have produced a more useful analysis.
- This is especially important for any policy or institutional analysis that involves evaluating the status-quo (as almost every such analysis does), because only comparative evaluation leaves open the possibility that the status-quo is after all optimal. Not incidentally, evaluation by comparing feasible alternatives is a common feature of decision models from formal rationality to disjointed incrementalism.
- "Fit" in this sense identifies effectiveness with successful institutional adaptation (March and Olsen, 1989); for examples in different contexts and discussion see Alexander (1995: 282-284) and Krill (1998: 2-3).