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Why Government Planning Always Fails

Working paper #652
Randal O'Toole

Long-range, comprehensive government planning does more harm than good, especially when planners attempt to plan private property. Long-range planning fails because success requires the accuracy of future forecasts. Those forecasts can never be accurate, yet special interest groups lock the government into the plans. Comprehensive planning fails because the areas being planned are simply too complicated for anyone to understand. Government planning of private property fails because planners have no incentives to find the optimal use of other people’s property. Government planning can work if it focuses on the short-run, the narrow missions of agencies managing such things as sewers, roads, or recreation areas, and if the agencies receive feedback, such as user fees, that rewards them for doing the right thing and penalizes them for doing the wrong thing. When stretched beyond these limits, government planning is a danger to a nation’s freedom and economic health.

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