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.