Planning for urban redevelopment: a transaction cost approach

Urban redevelopment incurs a significant amount of transaction cost that needs planning to cope with. Planning is conceived of here as either public intervention or information gathering to reduce transaction costs mainly due to uncertainties. In this paper, we propose a conceptual model of the urban redevelopment process in the complex, self-organizing city and use the case of Taipei City to argue for the necessity of planning in that process. In particular, through a field survey and three focal group meetings, we found that though the institutional design of urban redevelopment in Taipei City is incentive-focused, significant transaction costs deriving from coordination among private/public sectors render the design ineffective. Therefore, we strongly argue, as a theoretical contribution of the research, for strategic plans city-wide for urban redevelopment in Taipei City in order to alleviate the impediments caused by transaction costs.