A Neo-institutional Economic Analysis of Revising Informal and Formal Proprietary Boundaries

Abstract

This paper follows up six propositions in recent works that considered lot boundaries as units of private planning in a state prepared/endorsed layout and interprets land readjustment as a coordinated way to revise that layout. From a neo-institutional economics perspective, it canvasses the difficulties in and coordinated solutions to revising formal and informal proprietary boundaries and the ways the constraints posed by lot boundaries for planning can be overcome. The discussion is anchored by the thesis of the ‘corollary of the Coase Theorem’ that positive transaction costs entail differences in land use efficiency due to differences and changes in the forms of layouts as well as the need for a Coasian firm (coordinated) solutions in boundary revision.