The Inner Logic of the Coase Theorem and a Coasian Planning Research Agenda

Abstract

This paper is an original attempt to explore the inner logic of and apply the Coase Theorem—specifically the corollary of the invariant version of the Coase Theorem (CIT) and the extension of the corollary of the optimality version of the Coase Theorem (COTE)—to empirical planning research. This attempt hinges critically upon seven theoretical propositions developed on the basis of seven law and policy relevant determining variables that are manifestations of ways of ‘assignment of rights and liabilities’ for the application of CIT (COTE). This is preceded by an examination of the meaning of seven allocative outcomes or determined variables pertaining to the theorem component ‘resource allocation would (under CIT not) be identical’. A 7 × 7 matrix (with forty-nine cells, each defining a specific research arena) is constructed, and relevant literature is surveyed to map the landscape of Coasian planning research as a step to building a transaction-cost-based research agenda. An example of empirically refutable planning hypotheses is given to demonstrate the usefulness of the propositions and to obtain a glimpse of the applicability of the agenda.

Interpreting suboptimal business outcomes in light of the Coase Theorem: Lessons from Sidmouth International Festival

“…The corollary states that resource allocation is indeed affected by positive transaction costs or uncertain property rights (Hsiung, 1999;Lai & Hung, 2008;Lai & Lorne, 2006a;Parisi, 1995). Many other authors confirm this result, although not all of them use the word 'corollary'.…”

Who are the stakeholders and how do they respond to a local government payments for ecosystem services program in a developed area: A case study from Suzhou, China

“…It conflicts with the Coase Theorem according to the criteria in Lai (2011) and the narrow definition after Coase, but fits the broad definition after Pigou as discussed in , Lai and Hung (2008), and Lai and Lorne (2015). Hence, we chose Suzhou's PES program as study case not only because it has been implemented in developed areas of China, but also because it is a typical local PES being practiced in a global context as compared above.…”

“…Our study case is a Pigouvian type PES complying with regulatory frameworks. However, state rules can enlarge a market (Lai & Lorne, 2015), and a Coasian approach can be use to promote sustainable development via innovations (Lai, 2011;Lai & Hung, 2008;Lai, Hung, & Ng, 2009). We hence deduce that developed economy and property rights market in developed areas laid a foundation for private negotiation in PES systems in theory.…”

“…To better understand the study case and its context, we made a comparison between PES in Suzhou and other typical PES programs following the definition of Wunder (2005) and the works of Wunder et al (2008), Lai and Hung (2008), Lai (2011), Lai and Lorne (2015) and Schomers and Matzdorf (2013). The following characteristics were observed in Suzhou's PES program.…”

Industrial Land and Property Markets: Market Processes, Market Institutions and Market Outcomes: The Dutch Case

“…However, "one of the implicit assumptions of this welfare economic approach is the idea that when the market fails and the government intervenes, the latter will do so perfectly and without costs" (Buitelaar, 2007, p. 4). Many have argued that, in addition to market failures, there are public or government failures as well (Levačić, 1991;Lai, 1997Lai, , 2007Webster, 1998;Pennington, 2000;Lai & Hung, 2008).…”