The Review of Austrian Economics, 17:2/3, 187–202, 2004.
2004 Kluwer Academic Publishers. Manufactured in The Netherlands.
Exit and Voice in U.S. Settlement Change
PETER GORDON firstname.lastname@example.org
HARRY W. RICHARDSON email@example.com
University of Southern California, Los Angeles, CA 90089-0626, USA
Abstract. The prescriptions of top-down land use planners and the actions of the people who shape U.S. cities,
consumers and developers, are at odds. In spite of various recent pronouncements that the “Smart Growth”
movement has begun to reverse suburbanization trends, the opposite appears to be the case. Population data
from the 2000 census and employment trend data from the Commerce Department’s REIS (Regional Economic
Information System) ﬁle corroborate the view that the decentralization of people and jobs continues. Falling
transportation and communications costs strongly suggest that most people will continue to choose suburban
The move to new communities in suburban and exurban areas has been accompanied by a parallel move
to private communities. In the past 25 years, about 40 million Americans have moved into private communi-
ties. Over the same period, the suburbs have grown by approximately 55 million. In addition to the advantages
associated with suburban and private community living, both offer more secure property rights. Governance ar-
rangements in private communities must pass a market test; governance in newer communities is less likely to
be hampered by established interest groups and lobbies. Both outcomes can be seen as institutional adaptations
to the threat posed to property by an environmental movement working hard to implement top-down land use
KeyWords: land use regulations, settlement changes
JEL classiﬁcation: R23, R52
Urban sprawl has become the slander of choice among critics of modern cities.
most taunts, there is little speciﬁcity and there exists no widely accepted deﬁnition of the
term. Academic critics are usually content to presume various market failures while most
other critics want people to live at higher densities but have no way of specifying how
high. It would be simpler if they settled for the clearer label auto-oriented development.
Private mobility is the near universal choice and, as always, settlement patterns respond to
the dominant mode of transportation. Dispersed settlement patterns, in turn, increase the
demand for personal transportation, and so forth.
If there are signiﬁcant resulting externalities, these can be dealt with directly without con-
travening the lifestyle choices of most of the population. There is, of course, the widespread
political aversion to the use of market mechanisms in this way because rationing via price
This work presented at the 27th Annual Conference of The Association of Private Enterprise Education, April 7–9,
2002, Cancun, Mexico.