Understanding Institutional Change in the Dutch Retail Market: A Property Rights Approach

Contrasting with European trends, the Dutch national government decided in 2004 to change its protective retail planning model in a new much more liberal model and to leave it to the regional authorities to decide on the future of the Dutch retail landscape. The (unexpected) result of this institutional change seems to be the unbridled increase of peripheral retail developments, potentially taking a massive amount of trade away from existing retail locations. In response, the regional authorities decided in 2006 jointly to reinstall the main elements of former national retail planning policy. However, the effectiveness of the return to this protective planning ideology seems doubtful, due to the irreversibility of a substantial part of the current developments on the retail market. These developments call into question whether it would have been possible to ëpredictí, by some kind of ex ante policy evaluation, the impact of the shift in retail planning ideology on the functioning and the outcome of the market for (peripheral) retail development in the Netherlands. This paper investigates the usefulness of the application of property rights theory to analyse systematically the effects of institutional change at the Dutch retail market. The Dutch retail planning case serves as an example for a more general discussion about the use of property rights theory in a normative way to evaluate the potential impact of institutional change on land and property markets.