Institutions and land-use conflicts: harm, dispute processing, and transactions.

Author:Duke, Joshua M.
 
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Land-use conflicts arise from clashing beliefs about the social role of land and the ends to which land shall be put. These conflicts are then situated in socially constructed contexts, such as growth management, farmland preservation, tax assessment, and nuisance. For instance, farmers at the urban fringe view conflicts in terms of urban sprawl, development restrictions, and differential tax treatment; western ranchers challenge federal grazing restrictions on public land; urban property owners object to zoning and historical site designations; and developers see conflicts as jurisdictional disputes and struggles over impact fees. One senses that these conflicts share essential attributes beyond the obvious connection to the use of land, but analytically useful characteristics remain elusive and the scholarly debate has not begun to approach consensus. The principal claim in this paper is that each dispute, from any of the assorted categories of land-use conflicts, may be reframed as an analytically analogous series of economic transactions, referred to as land-use transactions.

The analysis of disputes is frequently framed as a struggle between private property owners and government. This also is thought to inform differing perceptions of freedom as opposed to "oppressive" government. As such, a land-use conflict is perceived to be a zero-sum game at best and a purposeful, ideological crusade over fundamental moral beliefs at worst. This framing of the issues at hand, together with the special place of land in the American psyche, usually leads to an emotional battle that obscures the central issues at stake and precludes appropriate dispute processing.

Framing conflicts as a landowner versus the government is wrong on at least two counts. Disputes involve conflicting claims about what institutions should be in place rather than disputes about whether it is justified for the government to take something from a private party. If the relevant institutions already existed--and private property rights thus were duly assigned--then there would be no conflict beyond one of enforcement. This paper seeks to clarify this distinction by more carefully defining the harm in actual conflicts (rather than enforcement conflicts) and then studying the processing of disputes about such harms. Second, private-property-owner-versus-government framing also fails to recognize that the true conflict exists between among landowners rather than government versus a single party. The government's role in restraining one party liberates others. Once again, at a most basic level, land-use conflicts are about assigning rights through institutions.

The inappropriate framing of land-use conflicts lies at the foot of much lingering incoherence in American land policy. Far too frequently, disputes are assessed topically, so that a wetlands conflict is analyzed as if distinct from a farmland preservation conflict. Rather than regard such conflicts within their usual contexts--zoning, regulatory takings, urban sprawl--it is more useful to view land-use conflicts as a metaphor for an underlying problem: the actions of one landowner hold perceived implications for others who may be, but need not be, owners of nearby parcels of land. In essence, this land-use "externality" captures the problem of cost being borne beyond the nominal boundary of the decision-making unit responsible for the actions under scrutiny. There is a divergence between costs borne privately and costs borne socially. In other words, the domain of unwanted implications transcends the socially legitimate domain of choice (Bromley 1989, 1991).

Unfortunately, the traditional economic explanations obscure as much as they reveal. This may be seen in their failure to offer resolution programs that adequately address the political side of land-use conflicts. For instance, the Pigovian solution does not consider political concerns and instead proposes that the land-use externality must always be resolved by altering "polluter," rather than "victim," behavior. In contrast, the Coasean solution may be taken to mean that the political dimension is irrelevant, for, in a world of zero transaction costs, it does not matter who gets the right since costless trading results in the maximization of total economic value. Although the two solutions result in resource allocation efficiency subject to the prevailing institutional structure and several weighty assumptions, both views stumble methodologically by disregarding the strategic behavioral incentives faced by actual and potential disputants, i.e., the endogeneity of institutional choice. At the same time, the Pigovian and Coasean views take inflexible normative stances toward harm in land use that appear naively incomplete in political debates. Because the real world is not one of zero transaction costs and because effective policy must address the behavior of all disputants, it matters very much who gets the rights. This is why land-use conflicts are pervasive, persistent, and protracted.

The objective of this research is to enhance the clarity of the social thought process about land use by offering a new framework for the analysis of conflict resolution and to show that many conflicts incorrectly seem intractable because of a misplaced, and persistent, focus on single-resolution processes. The problem of land-use conflict resolution is addressed in three sections. The first section provides an intellectual context by deriving a working definition of harm in land use from perspectives in the economic, legal, and philosophical literatures. Harm will then be limited to an institutionally based definition, thereby minimizing judgments about what harm should or should not be. The second section reviews the institutions of dispute processing by identifying the five major types of resolution processes and previous work assessing their performance. Drawing heavily on the work of John R. Commons (1931, 1990, 1995), the third section covers the theoretical ground necessary to reframe land-use conflicts as economic transactions. Analogies are applied so that a nonmarket land-use transaction has the constituent elements of the market transaction. Buyers, sellers, prices, and stakes are derived in terms that conform to economic theory. A statement about the path dependence of dispute processing is used to synthesize the results of the three sections.

Harm in Land Use

"Social life inevitably leads to harm to individuals," wrote Derek Roebuck (1990, 81). A. Allan Schmid (1987, chapter 1) echoed this sentiment by noting the ubiquity of externalities. Indeed, it is such ubiquity that makes harm--broadly construed--a poorly chosen candidate for a tool by which to construct an inquiry. (1) Harm in land use must be operationalized, and the way in which this is done involves important normative judgments that not only give meaning to the analytical tool but also reveal its fundamental limitations.

Schmid (1987) derived analytical conclusions about harm by assessing institutional performance given human interdependence and power. Accordingly, the ways in which society processes conflicts answer questions about what is efficient and "whose interests count"; at the same time, many optima were possible and all of these varied in terms of their distributional impacts and their power implications (p. 4 and chap. 11). In this paper, normative judgments are minimized and existing institutional definitions of harm are taken as given. Thus, the analytical task is to develop accurate explanatory models. This section first reviews endogenous and exogenous definitions of harm and then positions harm in a presumptive rights context.

Defining Harm in Land Use

Endogenous harm is defined by a set of evaluative criteria, which catalogs actionable harms ad hoc. For every instance of harm that crosses a moral threshold of acceptability, endogenous harm requires that institutions be established to protect the winners and to restrain the losers. This rule may be restated as:

(1) Moral Precepts [??] Harm [??] Institutions.

Hence, identifying harms under rule 1 requires a political determination of what actions are harmful. Although this task continually evolves with social norms, endogenous harms may share several of the following characteristics: (1) frequency; (2) intensity; (3) aborted steps toward resolution because of high costs in transacting, lobbying, or litigating; (4) socially expensive resolutions of petty conflicts; and (5) certain parties consistently bearing unequal social burdens. The neoclassical-economic approach to harm is a special case of this first approach. Specifically, when efficiency is the only moral precept, then harm becomes any action by Alpha that lowers Beta's utility.

Identifying exogenous harm requires only that the investigator examine prevailing institutions, which reveal what harms are expressly proscribed. The analytical task therefore becomes a search for an optimal set of rules--based upon a set of moral precepts about what makes rules optimal--to protect winners and restrain losers. The second rule is:

(2) Moral Precepts [??] Institutions [??] Harm.

Under rule 2, data collection requires the identification and explanation of conflicts in which an institution proscribes a behavior. For instance, state legislatures might prohibit or limit the development potential of wetlands, thereby identifying land-use harm in behaviors that destroy the ecological capacity of wetlands. Exogenous harm allows the course of history to reveal the moral precepts that define the institutions to identify the harm. Analytically, institutional performance is judged by how effectively the institutions restrain harmful behavior.

Harm in Presumptive Rights Regimes

This subsection clarifies the rights structure from which exogenous harm emerges--presumptive rights regimes. In presumptive rights regimes, harm arises from a conflict of interests, whereby disputing parties make...

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