Abstract: Based on assumptions of neo-classical economics and
rational choice / public choice theory, this paper investigates the
regulation of industrial land use in Taiwan by homeowners
associations (HOAs) as opposed to traditional government
administration. The comparison, which applies the transaction cost
theory and a polynomial regression analysis, manifested that HOAs
are superior to conventional government administration in terms of
transaction costs and overall efficiency. A case study that compares
Taiwan-s commonhold industrial park, NangKang Software Park, to
traditional government counterparts using limited data on the costs
and returns was analyzed. This empirical study on the relative
efficiency of governmental and private institutions justified the
important theoretical proposition. Numerical results prove the
efficiency of the established model.