Abstract
Economists have sought for the past 30 or 40 years to make a contribution to land use planning. Their efforts have generally been ignored, and the paper considers why this should be so. The first reason, it is suggested, is that there is a widespread view among professional planners that 'planning should lead' and the market should follow. The second reason is that planning decisions are also primarily political decisions, and made as a result of political, not economic, calculation. This has been increasingly recognised by economists as they have used the methods of public choice theory to analyse planning policies. The paper notes, however, that political forces can be unpredictable and cites evidence from the USA, the UK, Italy and Australia to illustrate the diversity of responses. The conclusion is that while public choice theory can explain why planning policies are what they are, this does not mean that these policies maximise economic welfare. They may only maximise the politician's chances of being re-elected. Welfare economic analysis is still necessary to demonstrate that some policies may, from an economic point of view, be better than others.
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