Transaction cost politics

From Geography

The political process behind the production of public plans is important. For the outcome of an efficient plan, there are several conditions required. First, all the affected participants have to be brought together. Second, the ownership rights have to be divided among all participants. And last, the arranged agreements have to be made costlessly.

In every planning process, there is a political market. Political markets are led by institutions that create the structure of our society. Examples of these rules are property rights, contracts or credible commitments. When we speak about political property rights, we mean the rights to have public authority in a specific policy area. The exchanging of arguments between participants are shown through debate, dialogue, negotiation, etc. These arguments lead to transaction costs. In the end the argument can lead to an agreement, but can be accompanied with high costs. According to Twight (in Sager, 2006, p. 231), political transaction costs include "information costs, organization costs, agency costs and other costs that exist in a political situation because of the face that individuals strive to act collectively."

The design of a plan the way the planner imagines it is exchanged with other actors throughout the political market. These other actors give their vision of the information given and resources used. Often this is an interaction between the planners and other involved participants with skills and knowledge different from the planners. There are several kinds of transaction parties: planners versus politicians, planners versus stakeholders, planners versus client groups and planners versus a community. The contribution of, for example, a community is to make clear their preferences, arguments or knowledge. Then the planner can determine power relations and power-based argumentation (the institutional context) within the other parties. We could say that an efficient plan always has to take into account the local needs.

Literature

Sager, T. (2006). The logic of critical communicative planning: transaction cost alteration [Electronic version]. Accessed on 22 October 2012.

Page created by Rosalie Koen on 24 October 2012