Regulation by Incentives, Regulation of the Incentives in Urban Policies

The Institutional Analysis and Development (IAD) Framework developed at the University of Indiana is very promising for advancing comparative urban studies. Ostrom's “Grammar of Institutions” is useful for addressing urban allocative conflicts. Such conflicts are valuable entry points to better grasp urban politics, especially in comparative research. This paper introduces a theoretical and conceptual framework to analyse the role of monetary and non-monetary incentive schemes in the field of urban policies. The incentives to consider in urban policies can be divided into four categories: (1) direct financial incentives; (2) indirect financial incentives; (3) non-financial incentives; (4) broader social incentives. Direct and indirect financial incentives are well studied by public choices theorists in urban economics; non-financial incentives are considered in some forms of planning theory, while broader social incentives are especially stressed by urban sociologists. This paper stresses the relevance for urban theory of configurations that articulate the four kinds of incentives conjointly, from both a bottom-up perspective and a top-down perspective. Taking into account of incentives, and not only of single incentives (one by one), it is a promising advancement. It is hypothesized that this could sustain relevant development in comparative urban research.