Regulating Versus Paying Land Owners to Protect the Environment
Posted: 22 Jul 2007
Abstract
One of the most important questions in the field of land use is whether society should pursue its objectives through regulation or by using incentives. Over the last thirty-five years, the United States has shifted from a heavy emphasis on regulation to a heavy emphasis on incentives, mostly in response to political hostility to regulation but with little fundamental debate about the actual merits of each alternative. This article, partly building on prior work by J. Barton Thompson, seeks to create a framework for analyzing the issue. The regulation vs. incentive debate involves two basic questions: who decides, and whether the government pays or not. The potential answers to the who-decides question are private firms or individuals, private parties and the government jointly, or the government. Thus, the two basic questions yield a three-by-two matrix that accurately categorizes the available policy options. Focusing on two of the primary options, traditional regulation (government decides, government does not pay) and voluntary, publicly financed land acquisitions (private parties and the government decide jointly, government pays), the article examines the relative merits of each policy approach based on the criteria of efficiency, fairness, and democratic accountability. The analysis yields no pat answers but raises a variety of concerns about the voluntary acquisition approach. One of the conclusions of the article is that overuse of the voluntary acquisition approach has the potential to undermine the practical and legal availability of the regulatory option over the long term.
Keywords: land use, environment
Suggested Citation: Suggested Citation