An interaction-cost perspective on networks and territory

This paper aims to contribute to the development of a general network theory for the social sciences. This ambition comprises an attempt to a) formulate, and illustrate with historical examples, a general hypothesis about the relation between a contiguity and a network principle for spatial development, and to b) use the concept of interaction costs to illuminate the genesis and shaping of networks, the interaction between and within them, and implications of the fact that networks have different durability and potential for change. An attempt is made to break interaction cost-generating factors down into groups according to their potential for change. The concept of affinity is viewed as a part of the aggregate relationship between homogeneity and heterogeneity in the nodes of the respective networks - a relationship which constitutes one component of the totality of factors underlying interaction costs. The paper points out certain theoretical research issues such as the relationship between networks and politically-controlled territories; links between various external networks; links and flows within complex nodes; relationships between internal, "intra-nodal" and external networks and the processes in which a one-function node bifurcates from one network to another; the generation of links for various flows by nodes but also the impact made by the flows on the internal structure of complex nodes. A more systematic application of network theory to these (and other) fields seems to have the potential of producing important contributions to the understanding of economic development.