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Broken market or broken policy? The unintended consequences of restrictive planning
External Authors
Cheshire, P
Related Themes
Macro-Economic Dynamics and PolicyJEL Code
R13, R38
Journal
National Institute Economic Review
Publisher
Sage Publications, London
External Resources
http://journals.sagepub.com/doi/full/10.1177/002795011824500111
Issue
245
This paper summarises the evidence from recent research relating to the British Planning system’s impact on the supply of development. Planning serves important economic and social purposes but it is essential to distinguish between restricting development relative to demand in particular places to provide public goods and mitigate market failure in other ways, including ensuring the future ability of cities to expand and maintain a supply of public goods and infrastructure; and an absolute restriction on supply, raising prices of housing and other urban development generally. Evidence is presented that there are at least four separate mechanisms, inbuilt into the British system, which result in a systematic undersupply of land and space for both residential and commercial purposes and that these have had important effects on both our housing market and the wider economy and on welfare more widely defined.
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