Property Rights, Public Choice & Urban Containment a Study of The

Property Rights, Public Choice & Urban Containment A Study of the British Planning System Thesis submitted for the Ph.D. degree Mark Pennington June 1997 London School of Economics and Political Science UMI Number: U111322 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U111322 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 7503 Abstract Following the 1947 Town and Country Planning Act, a persistent policy of urban containment has been pursued throughout rural areas of the United Kingdom. In spite of growing evidence that the effects of containment are incompatible with key aspects of public policy towards housing, agriculture and the environment, there is little sign that government agencies are considering the possibility of a serious policy re-think. This thesis represents the first attempt to analyse the continued commitment to this core of the British land use planning system from the perspective of public choice theory. The thesis begins with an outline of the institutional focus of public choice analysis, considering the fundamental questions of 'market failure', 'government failure' and the theoretical case for state intervention in the market for land. Having examined the evolving context of urban containment in the post-war period, the thesis proceeds to apply key elements of public choice to decision-making incentives in the planning system. The empirical analysis commences with an account of interest group behaviour on the 'demand side' of the political system. A subsequent section turns to the 'supply side', examining bureaucratic incentive structures and the role of regulatory agencies in the management of land use change. A still further section considers the role of legislative incentives on the 'supply side'. Finally, the empirical analysis concludes with a case study of a major planning dispute. The evidence presented suggests that a combination of institutional incentives on both the 'demand' and 'supply' sides of the 'political market' has led to the continual growth of restrictive land use regulation at the expense of a diffuse and unorganized mass of urban taxpayers and consumers. The thesis concludes by outlining a possible institutional alternative based on private property rights, which might help to avoid these undesirable elements of the British planning system. 1 Table of Contents Page List of Figures 5 List of Tables 6 List of Acronyms 8 Acknowledgements 10 1. Property Rights, Public Choice and Land Use Planning 11 1.0 Introduction 11 1.1 Individual Action and the Importance of Institutions 13 1.2 Private Property Rights and the Merits of the Market 15 1.3 Welfare Economics and the Case for Land Use Planning 16 Monopoly 17 Externalities, Collective Goods and Public Goods 17 Information Asymmetry 18 Markets and Short Termism 18 1.4 Welfare Economics and the Nirvana Fallacy 19 1.5 Public Choice and the Economics of Government Failure 22 Rational Ignorance 23 The Bundle Purchase Effect 24 Rent Seeking and Collective Action : Concentrated Benefits and Dispersed Costs 24 Politics and Short Termism 25 Political Monopoly 25 Bureaucratic Monopoly 26 1.6 Evidence of Government Failure 26 1.7 Pathologies of Public Choice Theory ? 28 1.8 Thesis Structure and Methodology 35 2. Urban Containment and British Land Use Planning 38 2.0 Introduction 38 2.1 Urban Containment: The Evolving Policy Context 38 1947-68 39 1969-78 41 1979-90 42 1991-97 44 2.2 The Consequences of Containment 47 Containment and House Prices 48 Containment, Dwelling Densities and Town Cramming 51 Containment and Transport Patterns 53 Containment: Environmental or Agricultural Protection? 54 Containment as Government Failure 56 2 Perspectives on Containment 58 Structural Political Economy 58 Pluralist Political Economy 60 Elite Theory 61 Weberian Sociology 61 A Public Choice Critique 63 Conclusion : Public Choice and Urban Containment 67 Rent Seeking, Collective Action and Urban Containment 69 Introduction 69 A Theory of the Rent Seeking Society 69 The Logic of Collective Action 70 Voters and Rational Ignorance 73 Rent Seeking, Collective Action and the Political Market/in Urban Containment 78 The Agricultural Lobby 78 The Conservation Lobby 83 The House Building Lobby 95 The Professional Lobby 99 Conclusion : Urban Containment - Concentrated Benefits and Dispersed Costs 102 Budgets, Bureaucrats and Urban Containment 105 Introduction 105 Budgets and Bureaucrats : A Theory of Bureaucratic Behaviour 106 Land Use Regulation as Budget Maximization 112 Budget Maximization and Regulatory Growth 130 Land Use Regulation and Urban Containment 134 Conclusion 139 Votes, Parliamentary Patronage and Urban Containment 140 Introduction 140 A Theory of Legislative Behaviour 141 Votes and Urban Containment 150 Patronage, Money and Urban Containment 165 Public Choice and The Parliamentary Select Committees 170 Conclusion 180 Public Choice and the Political Economy of Urban Containment in Chester 182 Introduction 182 Urban Containment in Chester : Contextual Background and Chronology of Events 183 3 Case Study Rationale 183 The Research Location 189 6.2 The Demand Side : Rent Seeking and Collective Action in Chester 191 The Conservation Lobby 192 The Development Lobby 201 Summary 204 6.3 The Supply Side : Bureaucrats and Politicians in Chester 205 Local Bureaucrats and Politicians 206 National Bureaucrats and Politicians 224 6.4 Conclusion 225 7. Conclusion : Land Use Planning - Public or Private Choice ? 227 7.0 Introduction 227 7.1 Positive Analysis : Urban Containment and the Power of Public Choice 229 Empirical Findings 229 Data Limitations and Research Implications 239 7.2 Normative Analysis : A Private Property Rights Alternative 243 Private Property Rights in Practice 245 Private Property Rights and Urban Containment 250 7.3 Conclusion 261 Appendices 263 Appendix 1 List of Persons Interviewed 263 Appendix 2 Statistical Data Sources 265 Bibliography 267 4 List of Figures 2.1 Statutory Land Use Designations in England and Wales 46 3.1 Rent Seeking and Monopoly Privilege 70 4.1 Bureaucratic Exploitation by a Niskanen Bureau 107 6.1 The Research Location : Chester 187 6.2 Chester and the Green Belt 188 6.3 The Assisted Areas Scheme 210 5 List of Tables 2.1 Land Use Designations in the United Kingdom 45 2.2 Major Designations in England and Wales as a Percentage of Land Area 47 2.3 Housing Land and Agricultural Land Prices in Four Case Study Areas 50 2.4 Density of Detached Housing in Four Case Study Areas 53 3.1 Rents and Rational Ignorance 76 3.2 Subsidies, Farm Incomes and Lobbying 81 3.3 Rate of Mobilization for Rural and Urban Amenity Interests 87 3.4 Planning Applications and Membership of CPRE 91 3.5 Structure of the UK House Building Industry - Starts by Size of Output 98 3.6 Rent Seeking and the Political Market in Urban Containment 103 3.7 Rent Seekers and Policy Change 104 4.1 Bureaucratic Agency Types and Budget Form 110 4.2 Land Use Planning - Budget Classification and Agency Types 114 4.3 Revenue Expenditure for Town and Country Planning and Total Local Authority in England and Wales : 1979 - 1991 117 4.4 Town and Country Planning as a Percentage of Local Authority Expenditure : 1960/61 - 1990/91 119 4.5 Revenue Expenditure for Town and Country Planning and Total Local Authority : 1962/63 - 1990/91 120 4.6 Local Authority Agency Types and Expenditure Shares : 1980/81 - 1990/91 124 4.7 Staffing Levels for Town and Country Planning and Total Local Authority : 1979 - 1993 127 4.8 Local Authority Staff Changes by Agency Type : 1979 - 1993 128 4.9 Expenditure and Staffing in the Conservation Quangos : 1980 - 1995 129 4.10 Budgeted Employees by Function in English Planning Authorities: 1991 131 5.1 Green Belt Marginals in England : 1992 - 1997 152 5.2 Agricultural Interests in the House of Commons : 1992- 1997 167 5.3 Construction Interests in the House of Commons : 1992- 1997 167 5.4 Environmental Interests in the House of Commons : 1992 - 1997 167 5.5 Membership of the Agriculture Select Committee : 1985 - 1995 175 5.6 Membership of the Environment Select Committee : 1985 - 1995 178 6 6.1 Land Use Planning in Chester - Chronology of Decisions : 1987 - 1997 185 6.2 Average House Prices in Chester: 1981 - 1991 190 6.3 Rent Seeking Costs for the Chester CPRE: 1991 198 6.4 Rent Seeking Costs for the Cheshire CPRE : 1992 - 1993 198 6.5 Rent Seeking Costs for House Building Consortium in Chester : 1987 - 1994 202 6.6 Interest Group Mobilization and Rent Seeking in Chester 204 6.7 Land Use Planning in Chester - Budget Classification 207 6.8 Budgeted Employees by Function in English District Planning Authorities : 1991 212 6.9 Budgeted Employees by Function - Selected English District Planning Authorities : 1991 213 6.10 Budgeted Employees by Function in English County Planning Authorities : 1991 214 7 List of Acronyms AAS Assisted Areas Scheme ALURE Alternative Land Use and the Rural Economy AONB Area of Outstanding Natural Beauty BEC Building Employers Confederation CAP Common Agricultural Policy

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