Effects of Public Investment on Sustainable Urban Development
Publication: Journal of Urban Planning and Development
Volume 150, Issue 4
Abstract
In the past, for urban governance issues, local governments tended to only focus on the economic development of cities, but in recent years, in the context of the global pursuit of sustainable goals, how to propose public investment policies that can attract more people willing to relocate to cities has become more important. This paper explores the impact of public investment with different goals (types) on urban development to illustrate that public investment only in pursuit of economic development (income growth) may result in cities deviating from achieving their sustainable goals. Excessive housing prices and pollution may reduce people’s willingness to move there. Only investing in both economic development and infrastructure that can improve the living environment may enable cities’ housing prices and populations to grow moderately. By constructing a theoretical model and numerical simulation analysis, this paper not only explains the positive and negative externalities of public investment but also proposes what factors affect cities’ housing prices, population, and the benefits of public investment. The results of this paper can help local governments formulate urban governance policies and supplement the literature on sustainable cities.
Get full access to this article
View all available purchase options and get full access to this article.
Data Availability Statement
Some or all data, models, or codes that support the findings of this study are available from the corresponding author upon reasonable request.
Acknowledgments
Funding from the Ministry of Science and Technology of Taiwan under Project no. MOST 111-2410-H-390-013 has enabled the continuation of this research and the dissemination of these results.
References
Aarhaug, J., and F. Gundersen. 2017. “Infrastructure investments to promote sustainable regions.” Transp. Res. Procedia 26: 187–195. https://doi.org/10.1016/j.trpro.2017.07.019.
Agénor, P.-R. 2011. “Schooling and public capital in a model of endogenous growth.” Economica 78: 108–132. https://doi.org/10.1111/j.1468-0335.2009.00794.x.
An, B. Y., and R. W. Bostic. 2021. “What determines where public investment goes? Regional governance and the role of institutional rules and power.” Public Adm. Rev. 81 (1): 64–80. https://doi.org/10.1111/puar.13220.
Anguelovski, I., J. Connolly, and A. L. Brand. 2018. “From landscapes of utopia to the margins of the green urban life: For whom is the New Green City?” City 22 (3): 417–436. https://doi.org/10.1080/13604813.2018.1473126.
Ashton, P., M. Doussard, and R. Weber. 2012. “The financial engineering of infrastructure privatization.” J. Am. Plann. Assoc. 78 (3): 300–312. https://doi.org/10.1080/01944363.2012.715540.
Belongie, N., and R. M. Silverman. 2018. “Model CBAs and community benefits ordinances as tools for negotiating equitable development: Three critical cases.” J. Community Pract. 26 (3): 308–327. https://doi.org/10.1080/10705422.2018.1476427.
Benita, F., G. Bansal, and B. Tunçer. 2019. “Public spaces and happiness: Evidence from a large-scale field experiment.” Health Place 56: 9–18. https://doi.org/10.1016/j.healthplace.2019.01.014.
Berglund, L. 2021. “Early lessons from Detroit’s community benefits ordinance.” J. Am. Plann. Assoc. 87 (2): 254–265. https://doi.org/10.1080/01944363.2020.1823243.
Bhatta, S. D., and M. P. Drennan. 2003. “The economic benefits of public investment in transportation: A review of recent literature.” J. Plann. Educ. Res. 22 (3): 288–296. https://doi.org/10.1177/0739456X02250317.
Bilsky, E., A. C. Moreno, and A. Fernández Tortosa. 2021. “Local governments and SDG localisation: Reshaping multilevel governance from the bottom Up.” J. Hum. Dev. Capabilities 22 (4): 713–724. https://doi.org/10.1080/19452829.2021.1986690.
Capozza, D., P. Hendershott, and C. Mack. 2004. “An anatomy of price dynamics in illiquid markets: Analysis and evidence from local housing markets.” Real Estate Econ. 32 (1): 1–32. https://doi.org/10.1111/j.1080-8620.2004.00082.x.
Croese, S., M. Oloko, D. Simon, and S. C. Valencia. 2021. “Bringing the global to the local: The challenges of multi-level governance for global policy implementation in Africa.” Int. J. Urban Sustainable Dev. 13 (3): 435–447. https://doi.org/10.1080/19463138.2021.1958335.
Day, C. 2018. “Population and house prices in the United Kingdom.” Scott. Polit. Econ. 65 (2): 127–141. https://doi.org/10.1111/sjpe.12166.
Efthymiou, D., and C. Antoniou. 2013. “How do transport infrastructure and policies affect house prices and rents? Evidence from Athens, Greece.” Transp. Res. Part A Policy Pract. 52: 1–22. https://doi.org/10.1016/j.tra.2013.04.002.
Eichholtz, P., and T. Lindenthal. 2014. “Demographics, human capital, and the demand for housing.” J. Hous. Econ. 26: 19–32. https://doi.org/10.1016/j.jhe.2014.06.002.
Elburz, Z., P. Nijkamp, and E. Pels. 2017. “Public infrastructure and regional growth: Lessons from meta-analysis.” J. Transp. Geogr. 58: 1–8. https://doi.org/10.1016/j.jtrangeo.2016.10.013.
Ermisch, J., and E. Washbrook. 2012. “Residential mobility: Wealth, demographic and housing market effects.” Scott. J. Polit. Econ. 59 (5): 483–499. https://doi.org/10.1111/j.1467-9485.2012.00591.x.
Ewald, C.-O., and W.-K. Wang. 2011. “Analytic solutions for infinite horizon stochastic optimal control problems via finite horizon approximation: A practical guide.” Math. Social Sci. 61 (3): 146–151. https://doi.org/10.1016/j.mathsocsci.2011.03.001.
Frame, D. E. 2008. “Regional migration and house price appreciation.” Int. Real Estate Rev. 11 (1): 96–112. https://doi.org/10.53383/100092.
Futagami, K., Y. Morita, and A. Shibata. 1993. “Dynamic analysis of an endogenous growth model with public capital.” Scand. J. Econ. 95 (4): 607–625. https://doi.org/10.2307/3440914.
Gabriel, S., J. P. Mattey, and W. Wascher. 1999. “House price differentials and dynamics: Evidence from the Los Angeles and San Francisco metropolitan areas.” FRBSF Econ. Rev. 1: 3–22.
Glaeser, E. L., and J. Gyourko. 2005. “Urban decline and durable housing.” J. Polit. Econ. 113 (2): 345–375. https://doi.org/10.1086/427465.
Glaeser, E. L., and J. D. Gottlieb. 2009. “The wealth of cities: Agglomeration economies and spatial equilibrium in the United States.” J. Econ. Lit. 47 (4): 983–1028. https://doi.org/10.1257/jel.47.4.983.
Greiner, A. 2005. “Fiscal policy in an endogenous growth model with public capital and pollution.” J. Jpn Econ. Assoc. 56 (1): 67–84.
Gupta, M. R., and T. R. Barman. 2009. “Fiscal policies, environmental pollution and economic growth.” Econ. Modell. 26 (5): 1018–1028. https://doi.org/10.1016/j.econmod.2009.03.010.
Halko, A., R. Mäntysalo, and E. Purkarthofer. 2024. “Engaging the united nations’ agenda 2030 in strategic governance of ‘Europe’s most sustainable city.’” Int. J. Urban Sustainable Dev. 16 (1): 1–16. https://doi.org/10.1080/19463138.2023.2295324.
Hao, Y., and H. C. Cho. 2022. “Research on the relationship between urban public infrastructure, CO2 emission and economic growth in China.” Environ. Dev. Sustainability 24: 7361–7376. https://doi.org/10.1007/s10668-021-01750-0.
Inalou, R. B., H. Sharafi, and S. K. Goki. 2022. “The analysis of sustainable small city development: A sustainable method for reducing rural–urban population migration from rural settlement to Big cities considering Golbaf, Iran.” J. Urban Plann. Dev. 148 (4): 04022041. https://doi.org/10.1061/(ASCE)UP.1943-5444.0000877.
Johnson, C. A. 2018. The power of cities in global climate politics. cities and the global politics of the environment, 1–23. London: Palgrave Macmillan.
Keivani, R. 2009. “A review of the main challenges to urban sustainability.” Int. J. Urban Sustainable Dev. 1 (1–2): 5–16. https://doi.org/10.1080/19463131003704213.
Khakee, A. 2014. “An unbalanced model for sustainable urban development.” Int. J. Urban Sustainable Dev. 6 (1): 52–64. https://doi.org/10.1080/19463138.2013.870765.
Liang, W., and M. Yang. 2019. “Urbanization, economic growth and environmental pollution: Evidence from China.” Sustainable Comput. Inf. Syst. 21: 1–9. https://doi.org/10.1016/j.suscom.2018.11.007.
Lin, Y., Z. Ma, K. Zhao, W. Hu, and J. Wei. 2018. “The impact of population migration on urban housing prices: Evidence from China’s major cities.” Sustainability 10 (9): 3169. https://doi.org/10.3390/su10093169.
Meen, G. 2012. “The adjustment of housing markets to migration change: Lessons from modern history.” Scott. J. Polit. Econ. 59 (5): 500–522. https://doi.org/10.1111/j.1467-9485.2012.00592.x.
Milbourne, R., G. Otto, and G. Voss. 2003. “Public investment and economic growth.” Appl. Econ. 35 (5): 527–540. https://doi.org/10.1080/0003684022000015883.
Miles, D. 2012. “Population density, house prices and mortgage design.” Scott. J. Polit. Econ. 59 (5): 444–466. https://doi.org/10.1111/j.1467-9485.2012.00589.x.
Palm, J., N. Smedby, and K. McCormick. 2019. A research agenda for sustainable consumption governance, chapter 11, edited by O. Mont. Cheltenham, UK: Edward Elgar.
Peng, C.-W., and I.-C. Tsai. 2019. “The long- and short-run influences of housing prices on migration.” Cities 93: 253–262. https://doi.org/10.1016/j.cities.2019.05.011.
Rajput, T. S., A. Singhai, S. Routroy, K. Dhadse, and G. Tyagi. 2021. “Urban policymaking for a developing city using a hybridized technique based on SWOT, AHP, and GIS.” J. Urban Plann. Dev. 147 (2): 04021018. https://doi.org/10.1061/(ASCE)UP.1943-5444.0000691.
Rao, C., and B. Yan. 2020. “Study on the interactive influence between economic growth and environmental pollution.” Environ. Sci. Pollut. Res. 27: 39442–39465. https://doi.org/10.1007/s11356-020-10017-6.
Romp, W., and J. D. Haan. 2007. “Public capital and economic growth: A critical survey.” Perspekt. Wirtsch. 8: 6–52. https://doi.org/10.1111/j.1468-2516.2007.00242.x.
Tomor, Z., A. Meijer, A. Michels, and S. Geertman. 2019. “Smart governance for sustainable cities: Findings from a systematic literature review.” J. Urban Technol. 26 (4): 3–27. https://doi.org/10.1080/10630732.2019.1651178.
Valencia, S. C., D. Simon, S. Croese, J. Nordqvist, M. Oloko, T. Sharma, N. T. Buck, and I. Versace. 2019. “Adapting the sustainable development goals and the new urban agenda to the city level: Initial reflections from a comparative research project.” Int. J. Urban Sustainable Dev. 11 (1): 4–23. https://doi.org/10.1080/19463138.2019.1573172.
Wakely, P. 2020. “Partnership: A strategic paradigm for the production & management of affordable housing & sustainable urban development.” Int. J. Urban Sustainable Dev. 12 (1): 119–125. https://doi.org/10.1080/19463138.2019.1647016.
Wakely, P. 2022. “Sustainable urban housing policies in the era of post-COVID climate change mitigation.” Int. J. Urban Sustainable Dev. 14 (1): 416–424. https://doi.org/10.1080/19463138.2022.2055298.
Wang, W.-K., and C.-O. Ewald. 2010. “Dynamic voluntary provision of public goods with uncertainty: A stochastic differential game model.” Decis. Econ. Finance 33 (2): 97–116. https://doi.org/10.1007/s10203-009-0100-0.
Weinhold, D., and E. J. Reis. 2001. “Model evaluation and causality testing in short panels: The case of infrastructure provision and population growth in the Brazilian Amazon.” J. Reg. Sci. 41 (4): 639–657. https://doi.org/10.1111/0022-4146.00236.
Williams, K. 2009. “Sustainable cities: Research and practice challenges.” Int. J. Urban Sustainable Dev. 1 (1–2): 128–132. https://doi.org/10.1080/19463131003654863.
Wolf-Powers, L. 2010. “Community benefits agreements and local government: A review of recent evidence.” J. Am. Plann. Assoc. 76 (2): 141–159. https://doi.org/10.1080/01944360903490923.
Zhen, H., H. Hu, N. Xie, Y.-Q. Zhu, H. Chen, and Y. Wang. 2020. “The heterogeneous influence of economic growth on environmental pollution: Evidence from municipal data of China.” Pet. Sci. 17: 1180–1193. https://doi.org/10.1007/s12182-020-00459-5.
Zheng, S., W. Sun, J. Wu, and M. E. Kahn. 2017. “The birth of edge cities in China: Measuring the effects of industrial parks policy.” J. Urban Econ. 100: 80–103. https://doi.org/10.1016/j.jue.2017.05.002.
Information & Authors
Information
Published In
Journal of Urban Planning and Development
Volume 150 • Issue 4 • December 2024
Copyright
© 2024 American Society of Civil Engineers.
History
Received: Aug 10, 2023
Accepted: Mar 21, 2024
Published online: Aug 6, 2024
Published in print: Dec 1, 2024
Discussion open until: Jan 6, 2025
ASCE Technical Topics:
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.