Comparative Evaluation of Alternative Water Governance Arrangements in British Columbia

Angela Lockrey (University of British Columbia)

Abstract : In response to a need for enhanced water governance, water institution reforms are taking place around the world. Common among these reforms is a shift from monocentric to polycentric governance systems, bridging multiple scales of stakeholders through a mix of institutional arrangements. However, even though water reforms identify probable benefits from a polycentric approach, the ability to predict which type of institutional arrangement is likely to yield desired outcomes remains a challenge. This paper applies the institutional resource regime framework and transaction cost economics to evaluate the current water regime in British Columbia and identify if an alternative water governance arrangement can support sustainable outcomes through minimized transaction costs. First, I perform an assessment of the water regime in British Columbia from 1859 to 2016 to identify if the regime typology is headed towards integration and associated sustainable outcomes. Second, I compare the perception of transaction costs associated with a watershed and a regional district alternative arrangement to the current system. Data were collected through 36 surveys and 5 semi-structured interviews with government officials and document analysis. Results confirm a complex water regime in British Columbia and an increase in transaction costs under both watershed and regional district alternative arrangements. Despite an increasing focus on regional districts as an appropriate alternative arrangement to improve coherence, I observe fewer transaction costs associated a watershed arrangement. Nevertheless, the current system, although complex, is perceived more efficient compared to either alternative arrangement.

Fixing Urban Planning with Ostrom

John R. Myers (London YIMBY)

Abstract : Urban planning reform proposals have generally failed to provide bottom-up rules that, given local geography and politics, can overcome political opposition to change and allow Coasean bargaining while sufficiently capturing externalities. I suggest four strategies to fill that gap in the literature. Recent research on the commons has rarely addressed deficiencies in regulation of new urban construction, and yet multiple studies estimate that such deficiencies cause large impairments of productivity and welfare. Many places face transitional gains traps where homeowners and others block any move to a more efficient system. I argue that allowing bottom-up approval of better uses of land may reverse the current Olsonian problems by allowing the formation of groups with strong incentives and the means to lobby for such changes. It can be seen as a tactic from Riker’s heresthetic: splitting the blocking homeowner-voter majority by allowing former objectors to defect from the regulatory cartel and benefit from more intensive land use. One example is the recent law in New Zealand, allowing a landowner to waive the protective setback rule binding a specific adjoining property. In England, a recent change now permits a parish to approve development on its own green belt, albeit subject to tight constraints. Ellickson’s suggestion of allowing a vote by individuals on a single stretch of street (‘face block’) to upzone that stretch is a third approach that has not yet been tried in practice. Analogously, a fourth rule could allow upzoning by vote of the residents of a city block, subject to restrictions on altering external façades of the block and to angled maximum height planes to preserve light to other blocks.

Duties Beyond Shareholders

Kish Parella (Washington and Lee University)

Abstract : There is a growing consensus among regulators, civil society, and even CEOs that corporations must consider the impact of their activities on a broad range of actors – not just shareholders. The need to do so is apparent from the externalities that corporations routinely impose on non-shareholders. Lack of legal accountability subsequently translates into low legal risk for corporate misconduct, which reduces the likelihood of prevention and results in three separate injuries to third parties: first, the initial corporate misconduct; second, denial of justice in the courts; and, third, the prospect of recurrence because of inadequate prevention. While contracting parties often rely on multiple third parties – not signatories to the contract – to play important roles in facilitating exchange, we deny this community protection from the externalities that contracting parties impose on them under a traditional view of contract as an exchange between two parties. This Article examines a corporation’s duties to others in its role as a contracting party. Contracts are the primary means through which corporations interact in the world; revising our views about the duties that contracting parties owe third parties has significant implications for our views of how corporations should treat non-shareholders. Normatively, this Article proposes an alternative view of contracts as an ecosystem with the following duty to contract in order to translate theory into practice: Contracting parties are required to take into account negative externalities to third parties when the contracting parties could reasonably foresee that performance of the contract would create a risk of physical harm to these third parties.