Friday, 18 May 2012

More evidence that planning stifles economic growth...


Now this isn't to say that we shouldn't have planning but is to observe that, if we do have planning, then we must appreciate the costs that society faces from having that planning. And the main cost is in economic growth - fewer jobs, fewer businesses and more expensive goods in the shops:

Using the quasi-natural experiment of the variation in planning policies between England and other UK countries and a difference-in-difference approach, we isolate the impact of Town Centre First (TCF) policies. We find that space contributes directly to the productivity of stores and planning policies in England directly reduce output both by reducing store sizes and forcing stores onto less productive sites. Our results suggest that since the late 1980s planning policies have imposed a loss of total output of at least 18.3 to 24.9%. This is equivalent to more than a ‘lost decade’ of output growth in a major sector generated directly by government policy.

Maybe we were right to have TCF policies but, in having them, we must also accept that loss of output growth and that lower productivity. Plus of course the negative impact on the UK economy of that lost output and lower productivity. We may be socially richer from having a "vibrant" high street but we are economically poorer.

So next time some planning expert tries to tell you it supports the economy - laugh in his face.


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