Public Choice Theory, Planning and Housing

Abstract

In answer to the question why do we need planning?, earlier chapters have argued that planning is needed as a response to the failure of markets to achieve specified efficiency and equity objectives. Markets may, at varying levels of complexity, fail to deal with incompatible proximate land uses, inadequate poor-quality housing, the provision of parks and open spaces, environmental pollution and the preservation of endangered species. A possible reaction in each case is to conclude that some form of land-use planning is necessary. Support for planning from this market failure viewpoint can be termed the liberal interventionist perspective. In this chapter we recapitulate the basic tenants of this perspective and examine the challenges posed by the contrasting public choice theorists view of the world. It will be shown that public choice theory raises a series of important questions about the ability of land-use planning to respond efficiently to market failure. Public choice theorists have argued that public-sector planners do not have the information to make choices that will compensate appropriately for market failures.