SUSTAINABILITY AND PUBLIC CHOICE - A THEORETICAL ESSAY ON URBAN PERFORMANCE INDICATORS

Liveable, endurable, and governable cities are sustained by a delicate balance of laws and policies that protect the interests of individual s, households, and firms at the same time as meeting the collective co nsumption needs of existing and future citizens. A general equilibrium model is developed in order to articulate some of the important theor etical features of this problem of urban management. Central to the mo del is the idea that sustainable policies and actions have themselves to be sustainable and that this is possible only if they reflect the p references of citizens. Starting from a household utility-maximisation problem the model yields an equilibrium urban public goods matrix, de signated the urban management matrix Gamma*, which may be viewed as a socially efficient urban management objective function. It contains qu antities of environmental goods, social infrastructure, and regulative services that are socially optimal in the sense that any deviation fr om them will make some citizens worse off. These are used to derive a set of urban system performance indicators that represent a realistic specification of a sustainable city from the current perspective of ci tizens. The degree of environmental sustainability implicit in the ind icators depends on the preferences of existing citizens for prudent co llective action. The indicators represent the optimal prescription of sustainable-city policies for present application. If pro-sustainabili ty education and propaganda are successful in changing preferences ove r time, then a comparative static use of the model charts a socially a nd politically sustainable path towards longer term environmental sust ainability. The essay is a theoretical one intended to explore the nat ure of collective and individual consumption trade-offs in a sustainab le city.