Interjurisdictional Competition and Land Development: A Micro-Level Analysis

A considerable number of recent studies show that metropolitan areas having a more fragmented governance structure tend to show a sprawling pattern of development. This may suggest that a fragmented institutional setting can generate a higher level of interjurisdictional competition that often hinders systematic management of the development process, thus offsetting the benefits from disaggregated local governance, such as welfare and fiscal efficiency gains. While previous studies typically assess this issue through metropolitan-level analysis, this research examines how the institutional setting influences land development at a micro-scale (i.e., section: 1 mile × 1 mile). More specifically, the present study (1) quantifies the institutional conditions in each section, taking the jurisdictional boundaries into account and (2) measures its effect on land use conversion rate by employing a quasi-likelihood estimation method. An empirical assessment of the U.S. Midwest case suggests that interjurisdictional competition, particularly the race for specific small land areas, does accelerate land use conversion, although the analysis results vary to some extent by the measurement of the institutional factor.