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COLLEGE OF SOCIAL SCIENCE

COLLEGE OF SOCIAL SCIENCE

The third stream of the

The third stream of the research is property rights model. This model starts with Demsetz (1967), who provided a naïve model of property rights. He argues that the development of property rights occur because the gains from the establishment of property rights exceed the costs. On the extension of that, Alchian and Demsetz (1973) argue that the potential gains of internalizing externalities generate the demand for property rights. For example, in case of the common pool resources, the lack of property rights leads to overexploitation and conflict (Ostrom 1990). When a community faces land scarcity because of development, property rights such as conservation rules to protect environments may provide economic gains to the community (Lubell et al. 2005). In other words, existing growth patterns reduce the available lands for new developments and infrastructures. Consequently, it is beneficial for local governments to provide environmental goods by setting a property right. As Eggertson (1990) argues, this property rights model is appropriate when the transaction costs are zero. While the explanation of land use policy change as a function of economic demands for the property rights is a strong point of this model, it does not consider the distributional conflict that generates transaction costs to make a new property right. This produces a significant misunderstanding since land use regulation has a distributional consequence (Feiock 1999). In addition, it ignores governmental institutions that actually supply environmental goods. This model deals the role of governments as implicit and passive (Feiock 2004; Lubell et al 2005; Kang and Feiock 2006). The fourth stream of land use policy is political economy view. The political economy view is a group of theories that frame a systematic relationship between economic, social, and political elements of policy decision (Alston et. al 1996). According to Denzau and Weingast (1982), land use control provides elected officials opportunities to seek their political ends rather than pursue the depicted rationale (solving problems) for controls. Feiock (1999) and Kang and Feiock (2006) also argue that land use regulation is a political mechanism. Their findings consistently confirm that political institutions really matter on the change of local land use regulations. Politicians use social and economic changes to pursue their political ends. The political economy view helps 5

for researchers to understand the land use policy processes in the local governance, because it views local land use policy as a function of political institutions and interest groups. However, as Ostrom (1986; 1990; 1999) argues, political economy view ignores the environment in which individuals or groups make choices. Preferences of community are not shaped in a vacuum, rather are shaped by physical spaces where actors play. In addition, those preferences are not articulated easily without any transaction costs. Institutions provide incentives and constraints on the articulation of community preferences by increasing or decreasing transaction costs. Political economy view has not paid much attention on these issues except recent several studies (Lubell et al. 2005; Gerber and Phillips 2004). For example, how interest group affects land use regulation decision may depend on the institutional arrangements, not just individual preferences (Lubell et al. 2005). Informal rules have long been a central object of study in the political behavior research (Ostrom et al. 1994; North 1990; March et al. 2004). A common problem of the above research streams is the neglect of these informal institutions and their role in urban policy making process. Along with formal institutions, informal institutions also shape the structure of preferences in a community (Ostrom 1986). Even though formal institutions are the pre-conditions on policy making, informal institutions also play critical roles (North 1990). However, informal institutions have not been rigorously conceptualized and measured in policy change literature, especially in local land use regulation policy arena, and as a result, studies of policy change have been limited their analysis to the formal institution. This is unfortunate because if social and political actors respond to a mix of formal and informal constraints, institutional analysis requires examination of both set of rules. These problems and limitations of the above research programs bring the necessity of constructing and testing a more comprehensive framework in this research. 6

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