(January 2010) Privatization strategies and the institutional context
Abstract AESOP 2010
Privatization strategies and the institutional context
Bart Pasmans, Erwin van der Krabben and Jan-Kees Helderman
Institute for Management Research, Radboud University Nijmegen
The way industrial estates are currently planned, developed and serviced in the Netherlands is not in the best interest for spatial quality. Many think this practice must change. Current practice of planning and production of industrial estates - the municipality as owner of the land services the land and sells it to end users (in approximately 80 percent of all developments) - leads often to undesired market outcomes. Aspects like sustainability, livability and esthetics are not optimally served. The mismatch between demand and supply, both in quantitative and in qualitative terms, seems of even greater relevance. Municipalities compete with each other on a regional scale to attract employment which puts pressure on the price level and quality of industrial estates.
According to the national Taskforce on the (re)development of industrial estates, there are positive expectations regarding the participation of private parties in the development of industrial estates; they are expected to have more knowledge about the market and professionalism in accommodations, while they pay at the same time more attention to profits and risks.
This paper hypothesizes that the institutional context is decisive for the transformation from public to private good and service. The central aim is formulated as follows: how can privatization take shape in relation to the institutional context and which experiences from other markets can be of value?
In this paper the market of industrial estates and private involvement in relation to the current institutional context will be analyzed. This will be followed by an elaboration and exploration of privatization strategies. For this experiences from privatization strategies and processes from other markets will be used. The (possible) market outcomes in these projects will be analyzed and evaluated in comparative case studies. This should lead to beneficial insights for privatization and the way industrial estates are developed in the near future.
Loasby, B.J. (2000). Market institutions and economic evolution. In: Evolutionary Economics, nr.10, pag. 297-309.
Needham, B. (2006). Planning, law and economics: The rules we make for using land. New York: Routledge.
Helderman, J.K. (2007). Bringing the Market Back in? Institutional Complementarity & Hierarchy in Dutch Housing and Health Care. (Ph.D. dissertation) Erasmus University Rotterdam.
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