The Challenge of Limited Local Government - Law and Liberty

5 April 2018 - Classical liberals are often in favor of decentralized government, but don’t tend to talk about how the local sphere often encroaches on liberty or undermines the rule of law.

Garreth Bloor 
Classical liberals are often in favor of decentralized government, but don’t tend to talk about how the local sphere often encroaches on liberty or undermines the rule of law.

Often this has been a hard-won lesson. Prior to my own foray into a term in local government, a remark offered at a Liberty Fund colloquium has stayed with me to this day: “History shows the tyranny of centralized dictatorships can kill you, but local government tyranny can make you want to make you kill yourself.” Though partly said in jest, it remains an expression of the frustration many citizens encounter in dealing with local bureaucracies and regulatory regimes the world over.

Over-regulation and ignoring the rule of law remain challenges in an era where the opportunity of decentralization is apparent. As authors write books proclaiming bold titles such as Benjamin Barber’s If Mayors Rule the World, I argue the nature of planning, as well as the nature of decision-making at the local level, are two fundamentally important areas to consider for the protection of liberty.

Planning professors Peter Gordon and Harry Richardson note the “astounding paradox” of the “simultaneous dismantling of the command-and-control regimes of Eastern Europe and the introduction of command-and-control policy approaches at the local level elsewhere in the world. Their explicit comparison of communist planning approaches reappearing in local government planning methodologies is noteworthy given how discredited the Soviet system was rendered, following the fall of the Berlin Wall.

Smart Cities: The Nature of Planning

The trend to locate solutions to major global issues at the city level is often seen in ideas such as that of the “Smart City,” as part of local authority planning agendas. The most frequently ignored challenge that all planning presents is the one posed by economist Friedrich Hayek, contained instead in a single question: “Who plans?” Hayek, the Nobel Prize winning economist, described planning as the task that should involve all members of society, not solely the government. Even if government had all the best intentions in the world, they simply could not gather and interpret the information required for the best plan possible, as Mark Pennington points out in his book Liberating the Land. In it he proposes alternatives to top-down planning by local governments.

Known for her iconic work, The Death and Life of Great American Cities, Jane Jacobs says cities have the capability of providing something for everybody, only because, and only when, they are created by everybody. That is: if they are allowed to flourish without centralized direction.

One of the most consistent theoretical approaches to local government over recent decades is found in the concept of modern town planning, usually referred to as Master Planning, sometimes simply as modernism.  Traditional Master Planning focuses on the creation of spatial or physical plans, which depict on a map the state and form of an urban area at a future point in time when the plan is ‘realized’. It is a philosophy which views planning a technical activity, developing comprehensive plans showing the projected density and intensity of various land uses and their spatial distribution.

The approach does include the private sector at times, with the term “privatized planning” applied on occasion. Effectively, however, the private sector is contracted to do a government objective instead of enabling thousands or millions of individuals to make a multitude of everyday choices in open local markets. Master planners employ a range of technical tools the master plan, which can include zoning laws, urban edges and urban transit plans that do not enable mobility defined as choice, but concentrate public spending on specific modes of transport, often undercutting private options in cities.

Denying citizens choices through overregulation also imposes significant costs. Brookings Institution economist Anthony Downs estimates that “probably half of the cost of building new houses in the average United States community is a direct result of government regulations, rather than any minimum requirements truly necessary for the occupants’ health and safety.” Research on costs and studies on individuals’ preferences indicate a sharp desire for more choice in planning matters, in contrast to numerous measures  currently inherent to master plans popular in the US and elsewhere.

The desire to achieve an idealised version of local community using top-down planning is not new. Louis De Bonald, the 17th century French philosopher Robert Nisbet studied closely, observed the tearing down of local community built by individuals and family, during the French Revolution. At times, similar moves were defended in the name of the good by strands of conservatism – in the pursuit of the ideal “rustic” landscape once envisaged to have existed

A second component of such a framework, as a result, is that most decisions are not made once every few years at the ballot box or only during public participation drives reserved for major initiatives, but every day by individuals acting freely.

In summary, planning theorists Stanley and Scarlett write planning that resembles the price-driven responsiveness of the market will need to accept the fundamental role markets play. The role of government is limited to providing a general framework within the Rule of Law for market adjustments and adjudicating disputes when conflicts arise.

For example, in the case of business licencing, clearly defined rules should automatically grant a licence when conditions are met. This is in contrast to the Rule of the Bureaucrat, where the application is subject to city officials deciding each case, employing arbitrary latitude when doing so. In another example, the rule of law is respected when an extension to a building or rezoning application is determined primarily by prescribed laws, consulting those directly affected by the development.

In the case of allowing complete subjectivity with decision-making by tribunals or similar bodies, objections from individuals can often mask anti-competitive behavior. Behind objections lies a desire to prevent new competitors from entering the market. At other times, community associations granted decision-making powers can be comprised or “captured” by narrow business interests, deviating extensively from the law in the name of economic development to the detriment of communities.

However, it is important to note that an approach that uses markets is not inherently pro-business or pro-developer, when done within a framework that recognizes the rule of law.

Caring for the poor, based on subsidiarity, naturally means important undertakings at the local level, which will include government authorities at times. Here is the key is to provide the poor the same choices as others, within the context of getting residents into the market, as opposed to making them reliant on a separate system and department of the government. Housing vouchers have been piloted on both sides of the U.S. political aisle as a more affordable, choice-respecting means for affordable housing for example – with private enterprise responding to customers and not bureaucrats acting in their name.

In transit policy, modes of transport should be respect and enable choice. In the developing world for example, mapping informal minibus taxi networks which transport hundreds of millions daily, as private tech hubs have done, means government can then create the basic infrastructure. Private operators on this basis opt into the system, when meeting clearly defined criterion and paying a fee to operate on it. The tendency too often is for a direct focus on a government-run single form of transport, like a rail or a bus system. Such an approach can unfairly prejudice existing private sector providers and lead to far more public expenditure than when costs are spent on infrastructure which allows a multitude of transport providers to opt in.

Even if city officials had every technological advantage a modern local government could wish for, no single group, as Hayek points out can gather, interpret and apply all knowledge – which is widely dispersed across society in forms beyond simply data. Modern technology does not erase this “knowledge problem,” but some policies can allow non-government actors to make a contribution usually reserved for government. Open data policies by cities are an example where individuals acting commercially, or on behalf of themselves, civic associations or their families, have more options, using data government has acquired. Many Smart City advocates have rightly welcomed these sorts of approaches.

New technologies and residents’ changing preferences cannot be accounted for when the nature of master planning must assume static premises for a long-term view, and is inherently unable to accommodate many of these changes. When local government plans do take a long view, for example on bulk infrastructure capital expenditure, it’s essential they account for changes through review mechanisms and do not prescribe beyond creating an institutional and infrastructural framework. In agriculture for example, plans which banned development on land set aside for farming only a decade ago did not foresee new technology with the rise of urban food systems – as well as ever-increasing yields on existing lands (which meets volumes previously assumed unattainable during the initial master plan).

New growth nodes can be permitted to develop in a Hayekian approach, instead of restriction by use of urban edges that ban growth beyond a specific boundary. Costs beyond urban boundaries for infrastructure, as a condition, can be borne by the private sector, with the marginal costs per unit of bulk coming down making developments more efficient, with the cost borne privately. In turn also providing a greater set of employment options where new commercial nodes can develop closer to where people live (as opposed to purely densifying existing earmarked areas). Success requires enabling the use of dispersed information found and applied across society.

The Rule of Law: The Nature of Decision-Making

Ideas that decentralize decision-making to communities themselves require the Rule of Law principle to ensure the rights of others are not infringed upon. Thus, limiting subjective decision-making by officials in favor of decisions determined by concrete universally applicable and understandable rules, which when in dispute are adjudicated by a court of law.

City planning laws and regulations which offer excessive subjectivity on decision-making by delegating to committees, are less consistent with the Rule of Law; in contrast to automatic rights based on compliance of pre-existing clearly defined rules, set as close to the people as possible. Unfortunately, the desire for a uniform look, feel and/or character of a community can undermine the Rule of Law, when the legislative decision-making function of councils is delegated to tribunals with extensive, subjective powers. Private developments of course can set about decision-making in their communities contractually for those who freely enter into such communities, given voluntary choice has already been exercised.

The adoption of a single consistent set of rules, which grant automatic rights wherever possible, as opposed to excessive decision-making by committees, is one way to make headway. The adoption of a this approach I engaged in as a city council member in Cape Town uses a single law to govern planning by setting conditions, which if met, grant rights automatically. On its passage, a new planning scheme can comprehensively repeal hundreds of outdated and onerous pieces of legislation, which have been built up over the years in many cities.

Liberty in Local Community

The opposite of government is not always the market. It is ordered liberty that includes the space not only for commercial pursuits, but individual fulfillment, family, and community. Non-competitive actions, particularly at the local level, form the bonds of family and community that constitute a rich civic life.

The local (including local government) affords the chance for real community and direct engagement more than any other sphere of the state. The day-to-day interactions demanded of a healthy civic life can provide a forum to transcend bipartisanship, as I have personally witnessed.

Should the work for liberty begin at local level, I believe we have an opportunity to affirm the terms of liberty, by which we hold other government spheres to account.

The value and promise of decentralization is perhaps best achieved when we hold the principles of liberty and the rule of law in our local community, to those same standards we expect to see at the state and federal levels.

Garreth Bloor is Vice President for Transatlantic Affairs at the IRR, the oldest classical liberal think tank in South Africa. He served as a former executive politician in the country, is the founder of a venture capital firm and serves as a consultant on policy matters and risk analysis. Bloor currently resides in Toronto.