Environmental regulation of land use and public compensation: principles, and Swiss and Australian examples

The authors discuss the regulation of rural land use and compensation for property-rights restrictions, both of which appear to have become more commonplace in recent years but also more contested. The implications of contemporary theories in relation to this matter are examined, including: the applicability of new welfare economics; the relevance of the neoclassical theory of politics; and the implications of contemporary theories of social conflict resolution and communication. Examination of examples of Swiss and Australian regulation of the use of rural properties, and the ensuing conflicts, reveals that many decisions reflect a mixture of these elements. Rarely, if ever, are social decisions in this area made solely on the basis of welfare economics, for instance social cost-benefit analysis. Only some aspects of such decisions can be explained by the neoclassical theory of politics. Theories of social conflict resolution suggest why, and in what way, approaches of discourse and participation may resolve conflicts regarding regulation and compensation. These theories and their practical application seem to gain in importance as opposition to government decisions increases. The high degree of complexity of most conflicts concerning regulation and compensation cannot be tackled with narrow economic theories. Moreover, the Swiss and Australian examples show that approaches involving conflict resolution may favour environmental standards.

Social democracy and market reform in Australia and New Zealand

Social democratic governments in Australia and New Zealand adopted policies of radical free-market reform, including financial deregulation, privatization, and public-sector reform in the 1980s. Because of the absence of institutional obstacles to government action, reform was faster and more comprehensive in New Zealand than in Australia. The New Zealand reforms were associated with increasing inequality and generally poor economic outcomes. There is nothing in the New Zealand experience to support the view that radical free-market economic policies are consistent with social democratic welfare policies or with social democratic values of concern for the disadvantaged, The Australian reforms were less radical, and were accompanied by some refurbishment of the welfare state. Economic performance did nor improve, as anticipated by advocates of reform, but was considerably better than that of New Zealand.