Skip to main content

Book Summary

Webster, Christopher J. and Lawrence Wai-Chung Lai. 2003. Property Rights, Planning and Markets: Managing Spontaneous Cities. Cheltenham, UK; Northhampton, MA: Edward Elgar.

In this book, Webster and Lai address two approaches for coordination and growth within an urban environment. The first is a top-down hierarchy, embodied by government; and the second is a bottom-up, spontaneous network, represented by the market. Realizing that both are interdependent, the book unpacks the two approaches and attempts to determine when - and at what level - either approach is most beneficial.

Webster and Lai begin the book with a discussion of city growth and development patterns; they use the term catallaxis to describe the creative order that arises over time. The benefits of the planned and spontaneous approaches are addressed in the context of five orders, defined by our authors. The most fundamental is institutional order, which consists of agreements between organizations that take the form of norms, contracts, laws, regulations, or rules. Next, property order explains that property rights define boundaries, provide access, and change depending on congestion, social norms and technology. This is followed by organizational order, where property rights are combined for collective gains (e.g. homeowners organizations). Finally, spatial order addresses the physical patterns that result from urbanization. Lastly, the book introduces public domain order, which applies to resources that have ill-defined property rights. The orders interact with each other to produce a functioning, yet complex, urban environment.

The book concludes with a discussion of public goods and the role of externalities. Webster and Lai use transaction costs as a metric for determining how best to address these issues publicly or privately. Webster and Lai argue that both planned coordination and spontaneous coordination are necessary building blocks for cities. Yet, the proper role for each type can only be determined through the order typology, the type of good/service, and the transaction costs of externalities.

Individual Chapter Summaries

Chapter 1 - Introduction: Chapter 1 serves as an overview for the book and lays out Webster and Lai''s central argument for the importance of spontaneous, market interactions

Chapter 2 - The Benefits and Costs of Cooperating in Cities: Our authors introduce the concept of "catalaxis" - the innovation spillover that comes about from urban market exchange.

Chapter 3 - Organizational, Institutional and Proprietary Order:Webster and Lai explain the three distinct forms of order that naturally emerge within markets.

Chapter 4 - Spatial Order: In Chapter 4, Webster and Lai extend their analysis of transaction costs and property rights to examine how markets influence spatial order, critiquing bid rent theory in particular.

Chapter 5 - Public Domain Order: Our authors introduce the concept of "public domain order" to help explain how individuals engage in collective action in situations where property rights are poorly defined.

Chapter 6 - Public Domain Order: Public Goods: Webster and Lai discuss the inefficiencies of public goods, and alternative frameworks for dealing with these inefficiencies using the concept of public domain order introduced in Chapter 5.

Chapter 7 - Public Domain Order: Externalities: In Chapter 7, Webster and Laishift to a discussion ofthe inefficiencies caused by externalities, again relying on a framework of public domain order.

Chapter 8 - Conclusion: In the finalChapter,our authorsencapsulatethe theoretical framework presented in the preceeding chapters and punctuate the narrative withglobalexamples.