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Infrastructure, Public Utilities and Spatial Developmentdifficult to realise once they have been committed to a particularpurpose. Newbery expounds this approach in the following manner:The relative importance of these three features in anytransaction will determine the appropriate institution formediating these transactions. Thus if there is boundedrationality and opportunism but not asset specificitycompetitive outcomes are efficient. If there was noproblem with bounded rationality, both opportunism andasset specificity could be handled by sophisticatedcontracts or plans, with every contingency carefullyanticipated and dealt with. If there were no opportunism,transactions could be handled by simple contracts inwhich agents would do as they said they would withoutfurther monitoring or enforcement. But if all threefeatures are present, then governance structures arerequired which specify tasks in advance, together withmechanisms to monitor and enforce outcomes ex post.(Newbery, 1999: 54)All three features are present in both spatial development andnetwork industry regulation. In the terminology of the tenconflicting priorities, it is clear that mechanisms must be in place toensure that whatever the institutional design it takes account ofsociety’s preferences for the present over the future and for equityversus efficiency. These dynamic elements are related to the keyquestions identified by Newbery, being dynamic or forward lookingin nature. There is clearly a role for society, through its democraticmandate to be able to set and revise these priorities. Similarly, thereis a role for society to ensure that the sectoral approach be coordinatedwith more overarching national economic and socialobjectives. While those firms which are in possession of the greatestinformation are those best placed to make many decisions,unfortunately it is often the very same firms, when in a position ofmarket power, that have the least incentive to operate in the overallpublic good. It is for this very reason that institutions are complex innature and should be subject to a wide variety of checks andbalances. It is widely recognised in developed economies that welldesigned institutions lead to improved efficiency and better decision521