Property rights and private initiatives: An introduction

Abstract

Exploring alternatives to customary land use planning Land use planning is an activity of a government body carried out in order to achieve certain goals chosen by that body. The activity almost always consists of making plans and testing applications for permission to build against those plans, and often against other rules like building codes. In that sense, planning 'intervenes' in the market; it 'interferes' with what people would have done if they were not required to get approval to build on or develop their land. Often land use planning is carried out in other, complementary, ways too: a government body provides and maintains shared facilities such as open spaces, public squares and roads. In that sense, there is public provision of certain goods and services. This combination of activities we call 'customary' land use planning. Nowadays, the role of governments in general is being widely questioned, and the budgets of public bodies are being cut. It is thus not surprising that land use planning is also being questioned, as Sorensen (1994) and others have pointed out. It is a 'welfare-state' activity, it requires heavy government involvement and expenditure, it is subject to the general criticism that governments act too slowly and unresponsively to 'what people want', it cannot be refined to take account of particular circumstances, so it is inevitably not very effective. At the same time, many people want to have land use planning, so as to create a certain type of order, and are often not dissatisfied with what it has produced. Political parties that want to abandon land use planning are not found, or are insignificant, in Western Europe. So the question arises - can the general goals of land use planning be retained and achieved but with a less direct involvement from public bodies? That is the question posed in this special issue. And we look for an answer in one particular direction, namely, could the goals of land use planning - or at least some of those goals - be realised by redelineating and reassigning property rights in such a way that the owners of the property rights in land achieve these public goals while pursuing their own interests? However, it is realised that that will not be achieved just by government bodies withdrawing from making land use plans, from development and building control, and from providing and maintaining shared spaces. When these activities are left to 'the market', the results are not always what we want. In Pigovian terms there are 'market imperfections' and land use planning is often justified economically as a way of correcting for those imperfections. If the owners of property rights in land are to be given more freedom in how they use those rights 'in the market', and if it is still wished to realise the goals of land use planning, then the rules of the market must first be changed. This approach to land use planning is based on the idea that markets can be structured purposefully in such a way that the outcome can be influenced. This structuring is, in certain respects, more fundamental than the Pigovian approach to land use planning. For it can require that property rights be changed. The premise is that property rights are not 'natural' nor do they evolve 'naturally'. They are social constructions that are shaped (within limits) by the state. As Bromley (1991, 5) puts it, rights can be an instrumental variable. Then the question is: what do we know about purposefully organising markets in property rights so as to achieve planning goals in a situation in which we have relied so long on public regulation and intervention to do that? What could purposefully organising markets, or other institutional arrangements that stimulate private initiatives in particular directions, involve? Can the existing goals of land use planning be achieved with less direct government involvement? That is, can the same outcomes be achieved in a different way? Moreover, it could well be that self-organising communities consisting of private parties 'using' property rights produce 'better' outcomes. …