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Abstract

This paper discusses regulation of rural land-use and compensation, both of which appear to have become more common but also more disputed. The implications of contemporary theories in relation to this matter are examined. Coverage includes the applicability of new welfare economics, the relevance of the neoclassical theory of politics, and the implications of contemporary theories of social conflict resolution and communication. Examining case studies of Swiss and Australian regulation of the use of rural properties and the ensuing conflicts, it is found that many decisions reflect a mixture of these elements. Rarely, if ever, are social decisions in this area made solely on the basis of welfare economics, for instance social cost-benefit analysis. Only some aspects of such decisions can be explained by the neoclassical theory of politics, and only ex post. Theories of social conflict resolution suggest why approaches of discourse and participation may resolve conflicts on regulation and compensation and in which way. These theories and their practical application seem to gain in importance as contest against decisions in a sovereign capacity increases. The high complexity of most conflicts on regulation and compensation cannot be tackled with narrow economic theories. Moreover, the Swiss and Australian examples show that such approaches of conflict resolution may rather favour environmental standards.

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