Tuesday, September 13, 2011

Governance choice

Alex Tabarrok calls our attention to Cities as hotels.  He cites some of the background discussions in The Voluntary City.  The latter includes Spencer MacCallum's "The Case for Lend Lease versus Subdivision: Homeowners' Associations Reconsidered,"  which elaborates the arguments in his The Art of Community as well as his wonderful "The Quickening of Social Evolution."

It's all good stuff.  Conventional government means politics and homeowners' associations means more politics.   MacCallum held up the hotel as an alternative.  It includes all manner of public services and public facilities.  Occupants consume them as part of a contract that they sign when they check in.  It's the "public" vs the "private" alternative, here meaning the headaches of politics vs the headaches of principal-agent problems.  The latter is a threat to any large organization.  How do the owners make sure that the interests of the many people working for them are aligned with theirs?  It is not simple.

In fact, the choice of headaches is not simple either.  The way to go is to allow choice and switching.  Cities could become hotels or "cities as hotels" could become cities.  Bob Nelson has long been arguing for ways to given neighorhoods the option to secede and privatize.