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A Property Rights Approach to Externality Problems: Planning Based on Compensation Rules

Author

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  • Erwin van der Krabben

    (Department of Geography, Planning and Environment, Nijmegen University, P.O. Box 9108, Nijmegen, 6500 HK, The Netherlands, e.vanderkrabben@fm.ru.nl)

Abstract

Most European countries have implemented some kind of land use planning based on exclusionary zoning principles to achieve spatial goals. This paper argues that, to reduce externality problems, regulatory planning is not always the best planning solution. Therefore, an alternative planning approach, which makes use of compensation rules, is suggested in this paper. This compensatory planning approach is based on property rights theory and refers to recent applications of this theory to planning practice. To illustrate the usefulness of such an approach, it is applied to the planning of out-of-town retail development in The Netherlands. The paper aims to demonstrate how deficiencies in the property rights regime can be repaired to deal with externality problems, achieving a more socially acceptable outcome of out-of-town retail development. The paper concludes with a discussion of the value of spontaneous order solutions for planning practice, by introducing four pragmatic rules on how to choose between different types of government interventions.

Suggested Citation

  • Erwin van der Krabben, 2009. "A Property Rights Approach to Externality Problems: Planning Based on Compensation Rules," Urban Studies, Urban Studies Journal Limited, vol. 46(13), pages 2869-2890, December.
    • Handle: RePEc:sae:urbstu:v:46:y:2009:i:13:p:2869-2890
    DOI: 10.1177/0042098009345537
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    References listed on IDEAS

    as
    1. Chris Webster & Lawrence W.-C. Lai, 2003. "Property Rights, Planning and Markets," Books, Edward Elgar Publishing, number 2625.
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    4. Bas Spierings, 2006. "The Return Of Regulation In The Shopping Landscape? Reflecting On The Persistent Power Of City Centre Preservation Within Shifting Retail Planning Ideologies," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 97(5), pages 602-609, December.
    5. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135, February.
    6. Willem K Korthals Altes, 2006. "Stagnation in Housing Production: Another Success in the Dutch ‘Planner's Paradise’?," Environment and Planning B, , vol. 33(1), pages 97-114, February.
    7. David Evers, 2002. "The Rise (and fall?) of National Retail Planning," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 93(1), pages 107-113, February.
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    Cited by:

    1. Wang, Jinshuo & Samsura, D. Ary A. & van der Krabben, Erwin, 2019. "Institutional barriers to financing transit-oriented development in China: Analyzing informal land value capture strategies," Transport Policy, Elsevier, vol. 82(C), pages 1-10.

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