The concept of multifunctional land use addresses the challenge to combine several socioeconomic functions in the same area, so as to save scarce space and to exploit economies of synergy. An interesting question in the respect concerns the role of the land market. One could question if a free land market would facilitate multifunctional land use in an optimal way, and if not, what the relevant forms of market failures are. Of all different land use functions, the infrastructure component is interesting to analyse, since it is generally different from other land use functions: the government instead of private investors usually provides it. The way the land market is organised could affect the composition of the different land use functions, including infrastructure. The present paper aims to offer a new contribution to the economics of land-use by addressing the differences between the realisation of multifunctional land use in both a free and a regulated land market. The importance of transport infrastructure for facilitating multifunctional land use will be investigated, and an analysis will be made of possible market and government failures in the provision of transport infrastructure. (Author/publisher)
Abstract