THE EFFECTS OF LAND POLICY - QUANTITY AS WELL AS QUALITY IS IMPORTANT

Most studies of land policy, in the abstract and when applied to a cou ntry and to comparisons between countries, use a theoretical framework which is derived, ultimately, from Ricardo's land price theory, This is used to predict the effects and the incidence of the costs and bene fits which result from applying land policy instruments, This article begins by comparing land policy in Israel and the Netherlands in that way, Both countries have a highly sophisticated and integrated set of land policy instruments, However, some very important differences betw een the effects of applying those instruments in the two countries can not be explained within that framework, In particular, in the Netherla nds, the development value of land is low and development gains small- in stark contrast with Israel, A supplementary framework is needed, an d this is given by the stock adjustment model applied to housing, With this, the difference between the two countries can be explained as be ing the result of differences in the way the instruments are applied t o influence the amount of housing supplied, The Ricardian theory and t he stock adjustment model can be combined into one framework that rela tes land policy to housing production, The key variable in this relati onship is the type of land development process that dominates in a cou ntry, Whether this process is carried out by a private or a public bod y can affect the volume of production, and hence the price, of housing , This adds a new element to the discussion about the relationships be tween planning, land supply and house prices.