Privatising the governance and management of existing urban neighbourhoods

Abstract

Purpose - The purpose of this paper is to explore the idea of transplanting the institution of homeowner associations or similar to existing urban neighbourhoods in order to correct imbalances in patterns of incentives and responsibilities that threaten the liveability and sustainability of cities. Design/methodology/approach - The paper compares a recent published proposal for privatising existing neighbourhoods with the current Taiwan Government's attempt to assist shops on retail streets to create their own micro-governance associations. The paper takes a strongly normative approach, using propositions from economic theory. Findings - The paper identifies several crucial factors in designing an institution for privatising existing commercial neighbourhoods; notably the usage of coercive power and the efficient alignment of property rights. Research limitations/implications - The discussion in the paper rests on a small number of case studies in Taiwan and on qualitative information collected by interviews with key informants. This information is sufficient to illustrate our normative theoretical arguments about institutional design. Practical implications - The paper offers some useful insights for public officials and private entrepreneurs seeking solutions to the problem of regeneration using voluntary urban neighbourhoods management. Originality/value - The paper is the first published work to explore the adoption of homeowner associations in commercial neighbourhoods. It is one of the few papers to analyse the issues arising, using an institutional framework based on the new institutional economics. © Emerald Group Publishing Limited.