The hidden costs of urban and territorial planning

Abstract

Approaching the urban and territorial planning process two main facts need to be considered. First, this activity, as a decision-making process oriented to define and introduce specific policies, is generally influenced by the actions of pressure groups. Second, urban and territorial planning, via the conditionings and limits imposed upon the ways in which land can be used, may affect many social dynamics in ways where there is not always a clear distinction between the costs and the benefits. The contribution highlights these issues using the economic analysis tools and aim to consider in particular the hidden costs of the urban and territorial planning, namely: transaction, operational and assessment costs. The results of the analysis highlights how the planning process allows to protect public goods, such as environmental health and safety, as well as to ensure competitive markets. But an excessive or misusing of the planning instrument is harmful, produces unnecessary costs for businesses, citizens and public institutions, fuels corruption, improves injustice, paralyzes economic activities and loads the action of government. Too many rules or confusing and contradictory rules are equivalent to no rules. The normative proliferation feeds the uncertainty and asymmetric information, increases the possibilities of interpretation encouraging elusory behaviors that constitute the first step towards the illegality. Improving the planning system is therefore an essential prerequisite to modernize the countries, but taking actions to correct, from time to time, individual dysfunctions caused by wrong, outdated, unnecessary invasive and rigid rules it’s not enough. It is necessary to change the decision-making process, from hierarchical systems to a more complex system that involves participation, monitoring and evaluation and is able to help decision makers to better understand the outcomes of their choices (minimizing the cost for the public institution), to limit (if it is not possible to eliminate) the opportunistic behavior and, if verified, to punish it immediately.