Development Rights Markets to Manage Urban Plans in Italy

Abstract

Urban economists and planners have been debating the possibility of using innovative methods and tools in managing urban plans to increase their effectiveness. According to many theoretical contributions, a major step would lie in shifting from the use of authoritative tools towards market-based ones. The institution of a development rights market in order to implement urban plans represents a major attempt to transfer into the practical urban government such a theoretical perspective. Several significant elements emerge from an analysis of the major case studies of development rights markets in Italy. First, markets for development rights do not replace the command-and-control tools traditionally used in planning. In reality, the success of the new markets seems to depend significantly on their integration with the latter. Furthermore, markets for development rights have not proved to be automatic devices led by an invisible hand: the visible hands of the administrations take steps to establish market rules and to promote them, reducing transaction costs as much as possible.