For planners, institutional transformation is important in two ways. From the positive aspect they need to know their institutional environment: institutionalization theory can help. Three 'schools' of institutionalization theory are presented: 'Historical', 'Rational Choice' and 'Sociological Institutionalism'. The normative aspect of institutional transformation is institutional design: planning often demands this. Institutional design is defined and described: what is it, where is it done, and who does it. The article identifies the institutional-agent interactions that are the media and tools of institutional design, and reviews some of the knowledge base for institutional design practice under the headings of governance, coordination, and agency.

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The evolution of the public interest concept is traced from its classic origins to its practical implications today. Variations include aggregative, unitary, deontic and dialogic approaches, with applications ranging from utilitarian evaluation methods to deliberative and dialogic approaches in political, administrative and judicial arenas. The ontological debate on the public interest concludes that the problem defeating any substantive public interest application is complexity, leaving a dialogic public interest as a default legitimator of public planning. To meet the need for normative application of a substantive public interest concept in planning practice, a threshold criterion is proposed for use in appropriate cases of plan evaluation.

The historical association between planning and rationality is unquestioned, but postmodernist critiques have raised doubts about the future of rational planning. This review defines and arrays different types of rationality to reveal that rationality is broader and more diverse than the instrumental rationality which has been associated with planning. An integrative framework associates complementary (contingent) planning paradigms with various forms of rationality, to suggest that the association between planning and rationality continues unabated. Discussion should shift from questioning the link between rationality and planning to asking what kinds of planning and rationality particular cases, situations, or contexts demand.