Meeting the policy challenges of rural and peri-urban land use in Australia: Government, governance and public policy
7. Concluding remarks
Victoria’s agricultural and peri-urban landscapes are important not only as an input to economic growth – now and in the future – but also for non-use values. The values communities ascribe to land use vary over time and location and are rarely compatible giving rise to tradeoffs. This paper discusses the range of policy tools available to governments to manage these tradeoffs to achieve the goal of maximising the total value to the community from the use of our land resources. When government selects a policy tool to achieve this goal, choices are also being made about governance, explicitly and implicitly, through decisions about institutional arrangements, authority, responsibilities, participation and consultation in decision making processes, and resource allocation among other things.
This paper has discussed the role of government and governance in developing public policy to maximise the total value to the community from land use and shown how different policy tools can be used to meet this objective. Importantly, the relationship between the policy objective, the policy tool and governance need to be clear and consistent to meet the objective effectively and efficiently.
Two aspects of public policy to maximise the total value to the community from land use in Victoria have been highlighted in this paper: the use of market based instruments such as BushTender; and the move toward more regional governance arrangements where the Victorian State Government and local governments have placed a greater reliance on actors and institutions at the regional and local scale through, the Blueprint for regional and rural Victoria.
The use of market based instruments to meet public policy objectives confirms a trend away from the reliance on prescriptive command and control regulation towards broader and more flexible approaches to policy problems (Head 2009). The BushTender program, for example, was not only more cost effective in securing biodiversity outcomes than a fixed price scheme but also enabled landholders to choose whether and how they wished to participate. Well designed market based mechanisms can allow individual landholders to manage their tradeoffs between the values they ascribe to land use while still meeting the broader public policy objective of maximising the total value to the community of land use.
However, market based instruments will not always be the most efficient policy response for every problem. Other policy instruments can be directed at land use objectives including regulatory tools (such as the Urban Growth Boundary and Green Wedges), information-education-suasion tools, and public provision of goods and services. These policy tools can be applied in a complementary way – for example market based instruments need to be underpinned by stable property rights and associated regulations. However different tools can be applied in conflicting ways – for example, information campaigns may encourage careful use of natural resources on land while underpricing of the same resources encourages (over) use. Selection of an appropriate policy tool, or mix of tools, will be guided by consideration of net benefits and the need for periodic review.
The approach taken by the Victorian State Government in the Blueprint is based on the view that regional communities are best placed to plan for priorities and challenges that affect them. Explicit in this approach is the idea that governance arrangements to meet public policy outcomes should reflect local values and be appropriate for the scale of the problem.
The complexity of the tradeoffs between priced and unpriced values – and over space and time – mean that there will be no ‘one size fits all’ public policy response to meet the challenges and capture the opportunities that changing land use offers to the community. The presence of unpriced values and external costs and benefits makes it difficult to formulate policy that enables land to be directed to its highest value use. Further, mixed governance responsibilities for land use at different levels of government can result in uncoordinated policy action.
Economic analysis can assist policy makers implement government action – and enable governance arrangements – by evaluating the tradeoffs inherent different policy responses, and by assessing the costs and benefits of options. Recent advances in economic analysis in areas such as mechanism design and experimental economics allow policy tools to be tested in a laboratory setting, and refined, before they are implemented. This can contribute to better land use outcomes and reduce the risk of policy failure.