Ethics @ Work: The best-laid plans

Will proposed planning reform reduce corruption?

April 23, 2010 04:30
3 minute read.

business ethics 63. (photo credit: Courtesy)

Barely a month ago, the Knesset passed the first reading of a proposed law that would reform the building planning process. A few weeks later, the police asserted that the current planning process is riddled with corruption and arrested many senior figures associated with building projects in Jerusalem and Atlit.

Prime Minister Binyamin Netanyahu has asked Justice Minister Yaakov Neeman to reexamine the draft law to see if will be part of the solution or perhaps part of the problem.

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The planning process for new buildings is cumbersome – and to a large extent rightly so. A country can’t grow without new buildings for dwelling and industry. But this is one area where decentralized markets can’t really do the job themselves.

The reason is the well-known maxim of real-estate experts: The three most important things in determining property value are location, location and location. Your location isn’t determined by what you do, but rather by what other people do; government planning is beneficial to obtain rational allocation of land between varying uses.

Planning boards must weigh a variety of considerations – both environmental and developmental – and the interests of a variety of parties including neighbors of proposed projects.

The first unsurprising result is that getting approval for a new building can take many years. The second unsurprising result is that developers are anxious to influence the judgment of board members and may decide to bribe them.

The proposed reform was designed to deal with both problems. Its guiding principles are: increasing efficiency through simplification of bureaucracy (“only one building plan, only one committee”); increasing transparency through providing greater public access to board deliberations; and fighting corruption through creation of a special police unit devoted to monitoring local planning boards.

The law provides for a sharper delineation of the authorities of regional planning boards, which will deal only with large-scale issues of use allocation, and local boards, which alone will deal with actual plan approvals. Special appointed representatives and professionals will be added to the local planning boards to increase oversight and expertise.

The law creates a very demanding time table for approval: Ordinary proposals will have to obtain a response within 10 months; extraordinary ones within two years.

The corruption scorecard is as follows: Reducing the number of committees, particularly the oversight of the regional committees, will make corruption easier.

Corruption is much easier to sustain on a local level than on a regional one; in general, the more people involved with an initiative, the harder it is to buy influence and get away with it.

The rapid time table also makes corruption easier; sometimes influence peddling takes a while to sniff out, and getting things done quickly makes it easier to just railroad an approval.

Increasing transparency will help reduce corruption because it will become easier to figure out who was the leading advocate of any particular building project. It is natural that any particular proposal will have allies and opponents on a board, but if there are allegations of corruption, then knowing everyone’s position can help evaluate them.

Likewise, adding outside board members makes it more difficult for local influence peddlers to affect the outcome. Having a special police unit devoted to this area would likely insure ongoing oversight.

Finally, any reform constitutes a shake-up of the system, which can disrupt existing webs of influence and frustrate the efforts of corrupt elements to cultivate influence.

I am most worried about the time tables. Ten months is not really a long time to evaluate an ordinary building proposal, and two years is not a long time to evaluate a complex one.

Reformers sometimes fail to understand that while some things take a long time because they are poorly designed, others take a long time because they are by nature time consuming.

I think the decision to reconsider the reform is a thoughtful one. I would not be surprised if Neeman concludes that the previously proposed turnaround is just too rapid to allow effective oversight.

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Asher Meir is research director at the Business Ethics Center of Jerusalem, an independent institute in the Jerusalem College of Technology (Machon Lev).

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