from Part I - Mitigating Institutional Voids by Design
Published online by Cambridge University Press: 14 November 2019
The upgrading of informal urban areas is a pressing challenge for meeting the UN’s goal to make cities a pathway to sustainable development. Complicating co-ordinated collective action is the diffusion of decision-making authority and control over critical resources in a context where there is a shortfall of institutions. Tackling this grand challenge thus requires designing inter-organisational contexts capable of navigating many institutional voids, including ill-defined property rights, weak regulation and inefficient markets. In this chapter, we draw on a case study of a development project that granted decision rights to the poor to upgrade Cairo’s ‘garbage cities’ to further our understanding of this organisational challenge. Our aim is to illuminate a form of organising that is neglected in management scholarship. Its main attribute is the way by which contractual governance is supplemented with a consensus-oriented collective-action structure. Our main contribution is to theorise a trade-off central to this form of organising: collective action, under the shadow of contractual governance, economises on the high transaction costs that would otherwise be incurred to resolve ill-defined property rights. However, enfranchising the poor brings into the organisational boundaries the costs of collective action and risk of a tragedy of the commons.
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