Global Course

Spatial Planning & Institutional Design

Lecture 3

Understanding spatial planning from an institutional economics perspective


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Dr. Jan Whittington (University of Washington, Seattle)

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This lecture introduces students to urban planning in the United States through a historical overview of the structures of governance in general and planning in particular, and their associated spatial arrangements for national, state, and city government.  Planning in the United States was created in response to market conditions, and planning activities are justified for the purpose of avoiding or alleviating market failures at the city level.  If planning exists because of the need to solve problems created by markets, then the next step is to gain a shared understanding of markets.  For this, we turn to basic theories of economics, beginning with classical economics, and take a transaction cost economic perspective to explain why we have institutions (rules of the game) to govern markets (the play of the game).  To this we add the concept of path dependence, to understand how institutions change over time, and the markets change with them. This is especially true in markets for land and infrastructure, giving us particular spatial arrangements in development over time.

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