Urban Planning and Social Welfare

Abstract

The rationale which welfare economics provides for urban planning activity seems to be fairly well established, and welfare economic theory can thus be seen as a valuable basis for a theory of planning. However, two major issues concerning the impact of planning activity on social welfare still need to be considered even if this basis is accepted. The first of these is the question of distribution. If society considers some distributions of welfare superior to others and if, as welfare theory demonstrates, each resource (re)allocation has different distributions associated with it, then the degree to which planning activity in affecting the allocation of resources actually leads to an increase in social welfare depends on the distributional effects of that activity and the criteria by which they are judged. The second issue is that of the legitimacy of the sort of intervention into individuals' activities which planning represents, and the degree to which intervention, even if justified theoretically, is in practice welfare-maximizing. It is concluded that although welfare economic analysis does provide many insights into the implications of urban planning for social welfare, the issues of distribution and intervention which are crucial to any consideration of the welfare effects of planning can be resolved only by reference to values the justification for which lie outside traditional welfare economic theory itself.