Up to now, we have implicitly assumed that the members have owned and operated their clubs, either using the congestion toll to finance provision or else instituting a two-part tariff when toll self-financing has not been possible. For the case of replicable homogeneous clubs (cells A and B in Table 11.1), we shall demonstrate that a competitive industry in which each firm corresponds to a club will face the same optimality conditions as those indicated in Chapter 11. Thus, there is no necessary reason for member ownership. That is, under ideal circumstances, any of a number of institutional forms can operate a club efficiently. If there are no exclusion costs nor information imperfections, and if there is a sufficient number of replicable clubs to ensure competitive conditions, then single-product clubs will be efficient, regardless of whether these clubs are member-owned and -operated or are firm-provided.

In recent years, studies in club theory have explored the issue of institutional form. A common conclusion has emerged for a wide range of models and analyses. Institutional form matters when exclusion costs exist, information asymmetries are present, competition is imperfect, and/or the club provides multiple products. This list is surely not exhaustive. The choice of institutional form raises many important issues concerning equity (e.g., Brueckner 1989; Glazer and Niskanen in press) and efficiency (e.g., Scotchmer 1994a, 1994b; Sterbenz and Sandier 1992).

The purpose of this chapter is to explore some of the issues surrounding the choices of institutional forms for clubs.