Who Pays, Who Benefits, Who Decides? Urban Infrastructure in Nineteenth-Century Chicago and Twentieth-Century Phoenix

Abstract

This article compares the financing of urban infrastructure in nineteenth-century Chicago and twentieth-century Phoenix, highlighting distributional conflicts over the cost of public goods. Using the rich secondary literature on Chicago, particularly Robin Einhorn's book, Property Rules: Political Economy in Chicago, 1833–1872, I explore whether adoption of development impact fees in Phoenix in 1987 represented a transition similar to that in Chicago between 1847 and 1851, when a system of special assessments paid by property owners benefiting from an improvement arose, in contrast to citywide financing of public works for citywide benefit. I examine the history of adoption and implementation of development impact fees, which were intended to “make growth pay for itself” by assessing new development to finance infrastructure it would require, and consider whether the fees resembled Chicago's special assessment system in constituting a privatization of government and in reflecting a view that government should not be used to redistribute. I conclude that models that address the provision of urban infrastructure, such as the Tiebout model, would benefit from greater attention to efforts to shift the cost of public goods over space, time, and social groups or classes in growing communities.