Public Choice, Pigouvian and Coasian Planning Theory

Abstract

With urban planning policy in transition in many parts of the world, the need to understand the theoretical bases for planning and to ground discussion about policy innovations on theory is as important as ever. This essay reviews the relevance of three economic paradigms to the theory of development control. It is written as a technical review with the purpose of explaining, contrasting and contextualising the contributions of these paradigms. Much has been written about the Pigouvian case for regulative planning. The Coasian literature is strong especially in the US but is not so well known elsewhere; and little has been written that draws together the diverse perspectives offered by the public choice school. This essay has been written particularly for academic planners and urban social scientists in the UK, and in other European and Commonwealth countries who are not familiar with the technical arguments underlying the Coase vs Pigou zoning debate. It is also an essay on the public choice theory of planning since it contextualises Coasian planning theory within that wider critique of welfare economics. Among other points, it argues that the relevance of Coasian planning theory is not by any means restricted to US-style zoning, nor is it purely a debate about deregulation. Coasian and other public choice perspectives generate a rich source of theoretical and empirical propositions which should be tested and developed, particularly as frameworks for comparative analysis of planning constitutions and policies. In this spirit, the essay concludes with elements of a research agenda.