An Intertemporal Efficiency Test of a Greenbelt: Assessing the Economic Impacts of Seoul's Greenbelt

Greenbelts have been a widely used planning tool for preserving open space and containing the physical expansion of built-up areas. Al-though both the economic costs and the ben-efits of greenbelts have been studied, there have been no attempts to integrate the two. In this paper, I attempt to illummate the argu-ment by measuring the aggregate net metro-politan economic gain or loss (in both house-hold utility and land value) of a marginal release of greenbelt land for development in Seoul, a city that has strong open-space pro-tections and severe urbanization pressures. I present the calculation for four points in time to discover how the net benefit changes over the long run. The trend shows that Seoul’s greenbelt achieved economic efficiency as the city grew, but lost economic efficiency once the congestion effect kicked in. I conclude that a fixed boundary for a greenbelt cannot be a net benefit forever, and thus the original greenbelt designation should be reexamined penodically. Chang-Moo Lee is an associate research director with the Seoul Development Institute In Seoul, l changmoo~netsgo com. One of the most difficult and contentious urban planning problems, especially in large metropolitan areas, has to do with the preservation of the natural environ-ment. Although its value is now universally recognized, the environment’s contri-butions cannot be captured in private market transactions. Thus, land that should remain in its natural state often gives way to development. This development even occurs where preservation of open space has been part of the original community plan, as in the case of the 1930s experimental greenbelt towns in the United States. First inspired by Ebenezer Howard’s Garden Cities of To-Morrow (1902), greenbelts have been a widely used planning tool for containing the physical expan-sion of built-up areas. The first system of greenbelts surrounding an existing major city was introduced in London, based on the Greenbelt Act of 1938 (Munton 1983). Since then, other cities around the world adopted systems similar to that of London including Ottawa, Moscow, New Delhi, Tokyo (which terminated it