Fairness in Urban Land Use:An Evolutionary Contributionto Law & Economics

Markets for complex, multi-faceted goods normally require a complex institutionalframework to function properly, i.e., to lead to patterns of outcomes that are deemedacceptable by the individuals involved. This paper examines the institutionalunderpinnings of the market for urban land use rights, taking both German and U.S.public and private land use law as a case in point. Apart from efficiency considerationsthat have been discussed in the literature, the individuals' preferences regarding thefairness of (i) the contents of urban land use rights and (ii) the distribution of costs andbenefits induced by innovative land uses have been largely neglected. It is argued thatinvestigating the impact of these preferences (and the underlying informal fairnessnorms) on the legal treatment of land use rights provides a key opportunity to constructan alternative Law & Economics approach that is compatible with an evolutionaryperspective on economic land use decisions...