Institutional Change in Land Planning: Two Cases from Galicia

Why do societies implement land policies? A number of arguments have been put forward in the literature, ranging from economic conceptions based on market failure and the problem of negative externalities to a more social conception based on welfare distribution and collaborative planning. However, neither all societies with similar market failures or negative externalities develop and implement land planning nor implemented land planning always results from collaborative planning. The arguments found in the literature seem not to fit the reality and, in most cases, cannot explain why societies create or undertake innovations in land planning. Within the framework of institutional change theory and based on the analysis of the emergence of two land planning devices—a land use law and a land banking law—in Galicia, Northwest Spain, this paper argues that land planning is developed to tackle negative outcomes of former institutional setups. However, the negativity of such outcomes is measured not in terms of economic performance, but in terms of social acceptance. The search for a workable definition of property within the Galician society seems to be the main driver of institutional change in land use planning analysed in this paper.