Should LDCs Fight Urban Sprawl

1
Should LDCs Fight Urban Sprawl?  
Jan K. Brueckner
University of Illinois at Urbana-Champaign      
Many observers think that the spatial expansion
of U.S. cities has been excessive.       This
attitude is captured in the critical phrase
urban sprawl.
2
The smart growth movement in the U.S. is trying
to curb urban expansion.      Urban growth
boundaries (UGBs) are a favored tool.       But
is urban sprawl a problem requiring government
intervention?        If not, the U.S. attack on
sprawl is misguided.        Same conclusion would
apply in other countries.
3
Economists favor government intervention only in
the presence of market failures.       Cities
grow spatially because of rising populations,
growing incomes, and transport improvements.      
The question is whether this growth is amplified
by market failures.
4

• Economists point to two market failures that may
  affect urban growth
•  
•  
•  
• Failure to take account of the amenity value of
  open space around cities
• Failure to consider the social cost of
  congestion in individual road-use decisions
•  

5
Lost amenity benefits arent considered when land
is converted to urban use.      ? Result cities
expand too much.      Drivers ignore the road
congestion they impose on others.      Social
cost of commuting then exceeds private cost, so
that too much commuting occurs.      ? Result
cities expand too much.
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These market failures may justify mild government
intervention to control urban expansion, perhaps
using UGBs.       But what if governments are
overzealous?       Urban population will be
bottled up in a smaller city for no good reason.
7
Damaging effects       ? Higher housing prices
via reduced supply of land   ? Lower housing
consumption in response to higher prices   ?
Lower standard of living       Overzealous attack
on urban sprawl can therefore contribute to urban
poverty in LDCs.
8
How big are such effects?       Simulation
analysis showed that household income would have
to rise by 7 to offset negative effects of an
overly-restrictive UGB.
9
Such policies are actually in place in some
LDCs.       Best known example is Koreas
greenbelts.       These UGBs have been shown to
raise housing prices and reducing the standard of
living in Koreas cities.       Lesson a
misguided attack on urban sprawl can have
damaging effects, exacerbating urban poverty in
LDCs.