Efficiency of Public Goods Provision in Space

This article incorporates a political decision process into an urban land use model topredict the likely location of a public good. It fills an important gap in the literature bymodeling the endogenous location of open space. The article compares open spacedecisions made under a majority-rules voting scheme with welfare-improving criterionand finds households tied to a location in space compete against each other for publicgoods located nearer them. Significant differences emerge between the two decisioncriteria, indicating that requiring referenda for open space decisions is likely to lead toinefficient outcomes. Specifically, many open space votes are likely to fail that wouldlead to welfare improvements, and any open space decisions that do pass will requireamenities larger than needed to achieve the social optimum. The more dispersed andlarge the population, the larger is the gap between the socially efficient level and the levelneeded for a public referendum to pass.[...]