Institutional innovations in land development and planning in the 20th and 21st centuries

This paper attempts to stocktake the major institutional innovations in land development and planning markets in the 20th century, and looks ahead to how these ideas may affect the evolution of institutions in the 21st century. Major ideas discussed include, i) public-private-partnerships; ii) zoning and participatory planning; iii) land readjustment and developers' obligations; iv) transfer of development rights; v) Coasean bargaining; and vi) informal institutions. We suggest that the foci of institutional innovations in the present century will shift from 20th century preoccupations as a result of rapid technological development and increasing environmental concerns. The keys for success in the institutional innovations to emerge will hinge on their abilities to reduce transaction costs for market exchange through new technologies, and align property right structures to achieve common goals of preserving the globe without compromising present economic needs too much.