Public Policy and the Distribution of Benefits: Lessons from Urban Renewal (New York, Chicago, Illinois).

Abstract

This dissertation is an investigation into the factors affecting the distribution of benefits from public policy. Policies are formed to address specific social problems, but often fail to alter significantly conditions which gave rise to these problems. Much past research has described in detail how policies have failed, who benefited or suffered most, and what consequences resulted from policy failure. If there are lessons to be learned from past mistakes, it is imperative that an underst and ing of the mechanism which accounted for these failures be developed. Otherwise, future policies are destined to repeat past errors. Drawing on agency reports, government documents and other case study materials on Chicago and New York, this research outlines the pattern of benefits and costs of Urban Renewal in relation to its stated policy objectives. Low income neighborhoods, identified as sites with a high proportion of subst and ard housing, where the targets of massive redevelopment projects. Rather than creating a large stock of adequate low income housing, renewal resulted in the displacement of low income families and the transformation of the target sites into middle and upper income neighborhoods. These outcomes are shown to be constrained by structural elements contained in policy implementation. In particular, reliance on producer subsidies, rather than direct public production of housing, to bring about social changes led to an effect opposite to the one intended by the rhetoric of renewal. This dissertation has put forth the argument that the use of producer subsidies to meet social goals will replicate existing inequalities in a capitalist society. The reasons for this are that resource inequalities result inevitably from market relations, and therefore market mechanisms tend to reinforce rather than alleviate existing inequalities. This analysis implies that current market-based urban redevelopment policy initiatives, such as urban enterprise zone proposals, because of their similar reliance on producer subsidies to bring about change, will not be able to alter the inequities they are intended to overcome.