.

In response to Malpezzi's comment that a Georgist land tax would ultimately lead to land becoming "radioactive": like plutonium, who'd want to own it, if it harms you (financially) unless you exert positive effort to keep losses at zero? More than one Georgist responded: Yes, that is precisely the idea.

Mason Gaffney responded to Malpezzi's long post with several points, some of them summarized here:

(1) First, George himself performed little analysis of land markets, except to allege that they were highly imperfect and to provide examples. Views identified with George have been articulated by many economists before and after him.

(2) Marx did not take the view that land differs from capital; that pops up in a chapter written by Engels and published after Marx died. Marxists since then have disputed the idea that land differs from capital in the classical sense.

(3) George wanted the land tax to replace other taxes to finance public functions and his idea of those functions was not greatly different from those we have today, except for the pork (military spending, farm subsidies, bailouts, etc.).

(4) Malpezzi is overlooking the Physiocratic view of tax incidence, which is that when you lower other taxes, you raise taxable rents by an equal or greater amount ("greater" because you remove excess burdens).

(5) What's relevant is not elasticity of supply but that the land inside any taxing jurisdiction is fixed. Tax jurisdictions are defined as areas of land.

(6) To say there is little urban land net of all improvements is sensationally contrary to fact. In all of Milwaukee County, when he studied it in the 1960s, there were only two municipalities without a lot of vacant land (Shorewood and Whitefish Bay). And in those two there were enough teardowns and renewals to find land values by looking at prices paid on the eve of demolition. There were also parking lots.

(7) There is no basis for saying George's scheme must be implemented on all land that is potentially substitutable for the land in question. Land cannot migrate. It is taxes on capital, sales, income, etc, that must be uniform to avoid migration.

(8) "Georgists" are not a uniform class and what is done in Harrisburg is mild and partial relative to George's proposal.

(9) there is a literature on the tendency of the land fraction in real estate to rise with the value of the bundle.

(10) The Georgist prescription for the Soviet Union drafted by Tideman does not suggest government control of land allocation. It is market-oriented.

(11) Land cannot be converted into capital, nor vice versa, so there is no need to tax them at the same rate to avoid distortion. Distortions do result, however, from taxing capital at ANY rate, because it is impossible to tax all capital uniformly. No jurisdictions even try.

Peter Colwell said that, unlike Malpezzi, he had the impression that site value taxation would tax land value net of only onsite improvements, the idea being to capture the externalities "society" has produced. If Colwell is right, the technical difficulty for a Georgist assessing land (let's say, a graded tax) is reduced. Of course, a 100% land tax would be assessed based on offers to pay tax, offers that would probably reflect the value of offsite improvements.

Mason Gaffney agreed with Colwell, that if, for example, a landowner paid for street improvements, it would be wrong to tax him or her for the resulting increment in value. Where the public paid, the public should collect for the increase in land value. But it could get tricky if, as happens, the developer pays for the initial street improvements but then "dedicates" them to the municipality, meaning the public must pay for operating, maintaining, and replacing them. It is also easy to misattribute gains in value. A small expenditure on streets in a favorable location will make lots valuable; in a bad location, it might fail.

Jeffrey Smith said that

(1) collecting rents over as broad an area as possible is the goal of advocates of the land tax; hemming the collection in is the aim of opponents. So for broader application, take aim at the opponents.

(2) Measuring any value (not just site value) may be hard for beginners. No one suggests getting rid of other taxes or prices because measuring their underlying value is hard.

(3) For post-tax-shift losers, government could offer deferments, as is done now. To be fair, one should complain, too, about regressive sales tax, collateral damage from wage taxes, etc.

(4) Why own land in a geonomy? For the income from the improvement, why should this motive change? Because, as Peter Colwell notes, society collecting rent does not change how much one pays but merely to whom.

(5) A sound policy would be no exemptions, even for government and railroads.

As to (5), Mason Gaffney said that in Taiwan government property had been put on the tax rolls. This should have a bracing effect on administrators, who must defend their budgets.

Tony O'Brien had several comments on Malpezzi's post, among them:

(1) Land values are often seriously understated on tax returns, to minimize taxes on assets, so the figure of 6% to 8% might not be reliable.

(2) The rental value of resources and exclusive licenses are not included in this figure, (and rarely are when this subject is debated). These would add massively to the questionable 6% to 8% quoted.

(3) The cost of government spending as a proportion of GNP might be correct for the U.S. but much of it disappears into an increasingly unwieldy, unproductive, and cumbersome U.S. bureaucracy, and less and less is transferred to where it is most needed. O'Brien estimates that in Australia, where GNP is about $450 billion, the current total tax revenue is about $160 billion or 30% of GNP. A 10% tax on all land and resources at current values would yield about $100 billion. Given the savings expected from the greatly reduced cost of government (by, for example, doing away with the taxation department and all the lawyers, enforcers, and checkers necessitated by a complex tax system), $100 billion might be more than sufficient to fund all the legitimate duties and functions of modern government, including health and welfare safety nets. O'Brien believed the same ratios would apply in most countries around the world.

(4) Improvements are the things the occupier does to the site itself (construction, paving the parking lot, etc.). The surrounding infrastructure indeed adds to the unimproved site value and it is precisely that value added by the infrastructure and the presence of the surrounding population that Georgists suggest is the natural source of government revenue, as the community puts the infrastructure there.

(5) Properly the land value tax system should operate nationally but local application still produces measurable benefit and more equity to the local economy.

(6) In the example in which Malpezzi invests his retirement income in land and Prof. Green invests in the stock market, it is true that Malpezzi would be liable for land rent but with all other taxes wiped out, the surge in economic activity that would follow such a change would more than compensate for all apparent loss. Not that O'Brien's fellow Georgists all agree that ALL other taxes would disappear, often, he thinks, because they overlook the rentable value of resources other than land, including mineral licenses, landing rights, broadcast bands, and the like.

(7) No revenue-raising system could be more equitable, horizontally or vertically, than the Georgist one, simply because everyone would be paying market-determined rents in precise proportion to the benefits received -- not user pays, but beneficiary pays. The person who occupied a highly productive site (with great income-generating potential) in an urban center would pay more than someone on a less productive site at the margin.

(8) Malpezzi's observations about Russia do not refute the logic of the Georgist system -- they simply reflect serious hurdles to be overcome if it is to be implemented.

(9) The incentive to hold land idle would disappear -- a blessing.

Responding to Malpezzi, Bryan Kavanagh made several points. Among them:

(1) the value of notionally unimproved sites is the value endowed by population and surrounding infrastructure (or the relative lack thereof). If we ignore population, infrastructure, AND subject site improvements, we haven't discovered America. In practical terms, accurately valuing urban land truly net of improvements is impossible. But valuing land net of subject site improvements is done all the time.

(2) If assessors in Harrisburg haven't solved the valuation problem, Harrisburg should send them for a lesson to Oz (Australia?).

(3) In response to Malpezzi's question: If textbook Georgist taxation, at 100% of land rents, were imposed, what would happen to the incentive to hold land? The best incentive to hold land is to want to USE it. Yes: LVT would be an incentive to release underused land.

(4) In response to Malpezzi's question: What's the incentive for owning land if you can't make any money from it? To use the land for its highest and best use, perhaps? Is capital gains the only reason for holding land?

Roy Langston was surprised that Malpezzi was surprised at so much support for Georgist views. After all, the announced concern of the Land and Real Estate Initiative is how the economy can realize the full benefits of land and real estate assets -- real property -- and how those benefits can be extended to the poor. Land value taxation, which Henry George popularized, remains the only available policy tool that would achieve these goals without imposing unfair or unsustainable costs on society, and it would yield many additional benefits. Moreover, the central economic and moral arguments for land value taxation have never been refuted. Langston criticized Gregory Ingram, whom Malpezzi had cited in saying that U.S. land rents are roughly 6-8 percent of national output, a fraction that remained roughly constant over a century. Since most government revenues at all levels in the United States were derived from land rents 100 years ago, said Langston, this would imply either that government was extremely small (which it wasn't, except by modern standards) or that land tax rates were very high relative to the discount rate (which they weren't, except by modern standards). He found it odd that Ingram had not performed an obvious check on his analysis. The total value of land rents is probably about double Ingram's figure, as can easily be estimated from 1) the total value of all real estate in the country (roughly $20 trillion), or 2) the fraction of household income devoted to housing.

Bryan Kavanagh said that in TAX REFORM:A RATIONAL SOLUTION (by Day, Else-Mitchell, Kavanagh, and Tucker) they had provided a spreadsheet that derives Australia's land rents from 1984 to 1996, based upon (arguably conservative) figures for total land values produced by the Commonwealth Grants Commission. Land rents were shown to range between 13.8% and 20.3% of national income during the period (or between 37% and 55% of taxation at all levels of government). He would provide a copy for anyone interested in the matter.

Malpezzi had said that imposing a Georgist tax system would entail many violations of vertical equity, since land is so widely held in the U.S. Langston responded that with slavery, too, government had created a privileged class comprising those who would and did financially benefit from the violation of others' rights. Many otherwise moral people, including such giants as Thomas Jefferson, chose to take advantage of that system in financial self defense. Similarly, the current system of taxing income (production) and sales (consumption) rather than the asset value government creates for the benefit of those who own land and (to varying degrees) other assets has stimulated many people to buy land and other assets as a matter of financial self-defense (especially the land sitting under principal residences, for the enormous explicit tax advantages). So land is, indeed, widely held -- just as slaves were widely held, and for similar reasons. Like slave owners in the antebellum South, though, landowners now depend to some extent on continuing the unjust system to which they have adapted their financial behavior. But unlike the current system of high income and sales taxation and low land value taxation, the system of slavery never succeeded in recruiting its primary victims as its stoutest defenders.

In response to other of Malpezzi's points, Langston said, (1) apropos a system that could work in Russia and other post-socialist countries, it's not necessary to retain the land in public ownership and allocate it through a political mechanism. It might be better and would certainly be far easier just to privatize it, and then tax its value at an appropriate (double-digit) rate. (2) A 100% land tax is not necessary and probably not desirable; 80%-90% would be sufficient for most purposes. Zero tolerance is anti-scientific nonsense. (3) You make money from land by using it more productively than others. (4) As for why people would own land when it could harm you financially: People choose to own all sorts of things that harm them financially even when they do exert positive effort to minimize losses. Pets are a good example. Similarly, people choose to employ other people even though it takes positive effort to ensure their wages don't turn into dead losses (and sometimes even positive effort is not enough). It requires an act of imagination to consider this a significant difficulty with land value taxation, especially if government taxes back only 80%-90% of the land value it creates, and leaves the remainder as a (smaller, but still substantial) free gift to the land owner.

Roy Langston said that one must distinguish between inly seeks to place himself in the path of a land value increment created by government, the community, and the taxpayer. Mason Gaffney responded that most of the growing edges of cities in Southern California are owned by huge, well-organized political speculators. Their special skill is lobbying for subsidized public works, including those that bring them scarce water (another natural resource). A (very) partial list includes Donald Bren (Irvine Co.), the Newhall family, the O'Neill family, the Minor family, the Chandler family (L.A. Times, Tejon Ranch), J.G. Boswell, major oil companies, major film and entertainment companies, and various railroad land empires and their spinoffs. Major law firms and bonding firms march along with them, as do their various pistoleros in the University of California System. Major "free-market" think-tanks, supposedly opposed to porkbarrel spending, avoid crossing them.

Richard Green said that in principle he found the idea of taxing the value of undeveloped land appealing, on grounds of both efficiency and equity. Leaving aside, for the moment, the issue of the true elasticity of land supply. The problem would lie with administration. Perfect administration of such a tax system would require an omniscient, virtuous government. Take the omniscience required to value the land: When Green does regression analysis of house prices, the coefficient of variation is rarely better than 20 percent, based on land and structures. But we actually have a very good idea of the value of structures (because it is easy to observe replacement cost, at least on newer buildings), so most of the variation in values comes from location. So the regression suggests that the COV for land is greater than 20% (because removing the structure will not cause the standard error of the regression to drop much, but the mean value explained will fall a lot). This means that when land is assessed in the middle of cities (where raw land sales are rarely, if ever, observed), the tax burden on a substantial number of properties will be either more than 20% higher or 20% lower that it should be. The overtaxed properties will lie fallow (why develop something when its income is taxed at more than 100%?), or, if they are already developed, will filter down rapidly (see Michelle White's 1986 JUE piece on this) and the undertaxed properties will give rents to speculators.

This assumes virtuous, unpressured assessors, who do the best they can, without undue influence. But assessors (and review boards and courts) are subject to tremendous pressure from rent seekers. Green has seen instance after instance of powerful companies challenging their assessments under the current U.S. system, spending vast amounts on attorneys, appraisers, economists, etc., to get their taxable values lowered. Small homeowners and business people generally do not have the resources to compete in the forums that determine property values. The issue, then, is whether despite these limitations, the George tax is superior to, say, the current U.S. income tax system, or a VAT, or any other kind of widely used tax system. To determine this will require very careful analysis in a general equilibrium framework that models uncertainty and public choice, and even then we might not know. He didn't know whether in practice the George tax was better or worse than other tax schemes around the world and he suspects no one else does, either.

Who is suggesting perfect administration? asked Tony O'Brien. Perfect administrations require perfect citizens, which are few and far between. You don't need omniscience; you need good, scientific, empirical knowledge. Bidders in an open market will accurately establish the price of a lot based on best (most profitable) current use. Valuers have many ways of accurately, reliably estimating value. And no doubt pressure can be and is brought to bear on assessors and town-planners involved in big property dealings -- what else is new? -- but in a site rent for revenue system 100% of the site rental is taxable, so the only gain the developer can make is on the development itself. Bidders determine site values and wear the results of their decisions. With a 100% land tax, profits will be based solely on the skill and input of the developer and not on the expectation of windfall gains from rezoning or from monopoly holdings. The site rent for revenue system, which Green calls the "George tax," recognizes land as a unique element in the economy and not as a subgroup of capital. It is the only element in the economy that is finite and can be monopolized (unlike both capital and labor). Taxing land leaves labor to its full rewards, in proportion to effort applied. If anyone can show him how ANY other system, past or current, can better explain the present universal coexistence of fantastic wealth alongside abject poverty, and has a logical plan for solving that problem, he will jump on that bandwagon. If the World Bank's function is to use its financial and intellectual resources to help the poor, then before it considers the pros and cons of condos or coops and debates neoclassical economic dead ends, it should examine the root cause of poverty. Until the land question is tackled, all assistance will end up in the pockets of the people who own the land and resources.

Adam Monroe wondered why a land tax would require any more omniscient a government than other systems would. That land values could be more difficult to assess than the value of structures seems wildly illogical. Every instance in which land has been the principle commodity assessed -- in Estonia, in South Africa, and in the growing number of Pennsylvania cities adopting the land tax shift -- has brought the unmitigated praise of assessors, reduced the cost of assessment, and reduced complaints about assessment from property owners. Monroe believed Green's point about variations in midcity land values and taxes to be weak and said that the private collection of most land rent did not seem preferable to the private collection of some. In any case, the exclusive use of land rent to fund government does not necessitate collecting 100% of land's rental value, but it does necessitate eliminating all other taxes -- an incomparable incentive to property development and other forms of business, which would thus reduce poverty more than any other conceivable reform. As for powerful companies challenging their assessments and homeowners not doing so, most homeowners and businesses own improvements of greater price than the land parcels on which those improvements sit. Shifting tax rates from improvements to land will be a welcome change for them, reducing their overall property taxes. The only parties likely to complain will be owners of large plots of undeveloped or underdeveloped land. This has been the case everywhere the shift to a land tax has taken place, as was predicted. Green had mentioned uncertainty about whether the land tax would be superior to an income tax or value-added tax system. Monroe responded that shifts in taxation from improvements to land have been taking place for quite a long time and more and more taxing bodies, seeing the results therefrom, have instituted similar reform. The Center for the Study of Economics (2000 Century Plaza, Suite 238, Columbia, Maryland 21044-3210; phone 410-740-1177) has catalogued the results for a number of Pennsylvania cities. Joshua Vincent (of the Center) can provide data to confirm the superiority of Georgist tax reform and can refer you to others around the world who have compiled similar data. Shifting tax rates from improvements to land has revitalized more than 15 Pennsylvania cities, which have all gone from decay to rebirth. Their growth now surpasses growth in similar nearby cities by such a large margin that the number of cities adopting the tax shift is increasing rapidly. Tom Ridge, Pennsylvania's governor, recently signed a bill that enables smaller Pennsylvania cities to adopt the tax shift as well. The bill passed in the State Senate 50 to 0 and in the House of Representatives 198 to 2. Clearly these folks are convinced.

Jeffery Smith said that a public opinion research survey commissioned by the California League of Conservation Voters, a majority of those polled voted to replace California's property tax with public collection of the publicly generated rental value of land -- a shift in taxes that, it was hoped, would curb urban sprawl and cut the cost of housing.

It is sheer hyperbole to say that a land tax would require an omniscient government, said Roy Langston. Buyer and seller value the land whenever it changes hands, and they are hardly omniscient. The cost of a new structure is highly certain, and reasonably observable; the value of a new (or old) structure is much less so. He has seen more than one costly new structure he would have paid money to see demolished. And there is the "leaky condo" problem, where owners of defective buildings less than five years old are in negative equity because of repairs needed to keep the building habitable. What does that do to the coefficient of variation (COV)? Also, much of the variance in land values reflects buyers' different estimates of future changes in the discount rate, not the land rent. Increasing the tax rate to a stable, entirely predictable figure much higher than the discount rate would improve the COV by a commensurate amount. As for raw land sales in the middle of cities: Properties are fairly often transferred just before demolition, which amounts to the same thing. Additional data points can be gathered by compulsory reserve auctions of all parcels immediately after demolition of improvements thereon. That is, the newly cleared parcel is advertised as for sale, and bids are taken, but the land is sold only if the owner decides the highest bid is high enough. In any case, the highest bid is then taken as the value of the parcel. As for the concern that some properties might be overtaxed and some undertaxed, that is a good reason to take only 80%-90% of the rent in tax. Problems with assessment are easily solved by self-assessment: each property is worth what its owner says it is worth, given that if anyone offers more for it, the owner must either sell it at that price, or pay double the tax on the difference. All that remains then is to separate land value from improvement value and a few simple reforms would allow this to be done much more accurately under a high land value tax than is currently true.

Answers to some of Richard Green's important questions about accurate land assessment will be empirical, said Nicolaus Tideman, and will be conditioned by the appropriateness and sophistication of the empirical techniques used. He and Florenz Plassmann are working on the problem of land assessment and expect to have results by May 1 or sooner. They have data on the 290 property sales within half a mile of the center of downtown Portland, Oregon, for the last 10 years. Perhaps two dozen are vacant land and an undetermined number are property sold on the eve of demolition, where all value can be attributed to land. They have a model that divides value between land and buildings in a way they believe has better theoretical foundations than others they are aware of. They plan to use maximum likelihood estimation techniques, which they believe to be more suitable than least-squares approaches. Remember, said Tideman, that the neutrality of a land tax does not require that assessments be accurate -- only noncontingent, as long as the tax is less than the rent of unimproved land. In highly built-up areas, we should think of land value as the product of a suitable estimating equation. We should require anyone who wishes to appeal an assessment to specify an alternative assessment function, which would then be applied to all property if the function were judged to be better. He and Plassman do not expect to explain sales values perfectly. They will be satisfied if they can achieve a lower coefficient of variation for sales of vacant and pre-demolition land than the assessor achieves for total property value. That should establish that land taxation can work with at least as much administrative accuracy as the present property tax. He would bet even money that they can achieve the hoped-for accuracy, with a formula to be delivered on May 1, for downtown Portland sales for the subsequent year.

Asking about the supply elasticity of land is the wrong question, said Tideman. The question should be, "Is it possible to devise a noncontingent tax, under which people do not increase their tax liabilities by being more productive?" He sees no reason for supposing this cannot be done. To what extent can land values and GDP be expected to increase if taxes are shifted from labor and capital to land? He and Plassmann are working on a computational general equilibirum model of the economies of the 48 continental U.S. states, plus the District of Columbia. The model has four factors of production (land, labor, machines, and structures), 20 industries and 8 consumer groups. The model will predict the effects of tax changes in individual states on economic activity in all states and on aggregate excess burden.

The problem, responded Max Kummerow, is not to assess land values in the absence of a single tax but to assess the tax after a tax is supposed to have taken away land values. Initially you could use land values under the old tax regime, as Portland has done, but as soon as you impose the tax the land value will change to zero, if you have got the tax right. Once all land sells for zero, how do you decide how much development should be on it? If market prices don't signal potential development density, what does? Development higher in density (value) than you expected suggests that you are undertaxing, so the tax assessor has to always guess the "correct" development for each site -- hence the worry about replacing the market with the assessor. Hayek and the experience of socialist countries convinced many people that markets do it better. Of course, markets are influenced by taxes and regulatory limits on land use -- why not merely advocate a somewhat higher tax on bare land? This would not end speculation, however; it would merely create more income for government and a capital loss for current owners. If I expect intensity of use to increase and am competing with buyers who do not, I will buy the land for the price reflecting the new tax and wait happily for my unearned increment as the value of the land rises (because I didn't have to invest so much to buy the now-cheap land). The assessor has to keep changing the tax to reflect changes in value (potential uses) if he wants to keep me from making money. The assessor becomes the market under that scenario. Since speculation is about land price change, speculation is possible even on land with zero value because of the rent-confiscating tax. Why would a speculator care if he pays $1 million for a site (and low taxes for a few years) or $1000 for a site plus high land taxes that end up giving the same profit in terms of present value? The community can capture speculative profits better through capital gains taxes or direct ownership, but with ownership the community will be making the market decisions. In a mixed economy, assuming an honest and vigorous democracy, that might work -- private decisions would tend to keep public decisions within reasonable bounds, and vice versa. Morally, there isn't much difference whether the children inherent bare land, shares, office buildings, or the copyright to Microsoft Office -- the income they receive, if it is property income, is unearned by their own efforts. Money doesn't smell. Inheriting rent from land or returns from bonds or shares is the same; you can trade one form of property for the other. What this discussion opens up is the whole question of property rights and the distribution of income and wealth. The rich tend to get richer, which leads to a kind of market failure -- for markets to allocate things efficiently from the standpoint of welfare (for everyone to have the endowments or income to play the game and express consumer demand). But if governments interfere too much with property rights (enact too much redistribution), they take away incentives to invest and work. Most of us would rather make choices in markets than make appeals to bureaucracies, for allocating most things (except public goods and externalities, which we must argue about collectively). Some societies seem to have done well by adopting progressive taxation of incomes, taxes on wealth, and transfer payments to the poor, while ensuring favorable conditions for investment, which means respecting property rights. Investments in human capital are a win-win "leveller." Kummerow likes the early-20th century institutional economists' approach of tinkering with institutions at the margin to fix glaringly obvious problems rather than trying to create utopia on earth by ideological means.

Adam Monroe reiterated that land speculation produces no goods or services and society is not better off with feudal aristocracies. To place land's rental value in the hands of a few people or institutions is to allow slavery. The public collection of land's rental value, by removing financial rewards for land speculation, would reduce the cost of land to its lowest possible level, eliminating poverty. Land price bubbles inevitably pop and nations go into recession. Allowing the proper relationship between nature and society is to allow equality and freedom, the two great seemingly opposite political ideals, to be perfectly synthesized: equality in access to Providence, freedom in access to one's own creative potential. But an ideal is not an inevitability. Our timely and correct decision on this matter is vital. Nature is not stupid. The continuation of life is assured with or without Earth's little crop. Planets such as ours, with similar life, populate the universe like grains of sand on a beach that extends past the view of human eyes squinting at a horizon. Let Earth be a survivor, a success story, a winner. It's our world and our choice.

Alfred Anderson asked why, as the conference drew to a close, the group could not address poverty's basic relationship to land -- the near-monopoly private ownership of land, its natural resources, and other parts of our common-heritage wealth by the world's super-wealthy.

Roy Langston responded that the counter-examples to Anderson's hypothesis were too glaring: rapid declines in poverty where land rent is privately collected but the tax and regulatory systems favor production of wealth (as in Hong Kong), juxtaposed with horrendous poverty, even famine, where land is held by the state "in trust" for the people but the tax and regulatory systems punish or prevent the production of wealth (as in North Korea). We undercut the case for public collection of land rents when we claim too much for it, said Langston. Public collection of land rents cannot significantly alleviate poverty where the tax and regulatory systems discourage the production of wealth, because such tax and regulatory systems effectively reduce land rents to a level insufficient to the purpose. Similarly, Henry George notwithstanding, the private collection of land rents does not create poverty where the tax and regulatory systems encourage the production of wealth, because the flow of land rents may support the landowners in idleness but their magnitude means that working people can demand and get higher pay for their labor. Land value taxation would thus merely alleviate poverty to the degree that it substitutes for more economically and morally destructive taxes. That should be enough. Claiming more is unreasonable, and weakens the case for justice.

CONCLUDING REMARKS

Having read many of the conference messages, Anthony Yezer concluded that the World Bank should be cautious about relying on the conference proceedings for any serious purposes. The fact base for the issues presented is thin and the Bank is advised to cultivate a significant in-house capability for modeling urban land and housing markets in developing countries before providing information or recommending programs for those countries. The differences between those who are confident they can appraise land values in Russian cities and those who doubt this ability suggest that great caution is in order. In Yezer's view, the Bank should concentrate on case studies of land and real estate markets that appear to be functioning "best" and study the feasibility of translating those systems to developing countries.

Adam Monroe agreed with Yezer's recommendations about case studies. The markets that seem to him to be functioning best are those with the greatest decentralization of land ownership, such as the cities in Pennsylvania that have adopted the property tax shift, as well as Denmark, Hong Kong, and many cities in the Republic of South Africa. About the motives driving the conference debate, Monroe referred participants to Mason Gaffney's well-documented essay, available at

Mason Gaffney said those wanting more information on using taxation to assert the common interest in land could contact the Robert Schalkenbach Foundation by e-mail at . They can direct you to industrious geofiscal nerds at about 30 web links.

Looking back, Omar Razzaz said he had expected the online conference to be a useful but somewhat dry exercise in which participants would post references to their work or someone else's. He was wrong. The conference quickly evolved into a passionate and lively debate and a valuable exchange of ideas among academics, researchers, and practitioners with much to share. He apologized to the passive recipients who expected to turn on a water tap and instead turned on a fire hydrant of e-mail. Razzaz reminded participants that the conference was not an isolated event but a way of launching LARI, the Land and Real Estate Initiative of the World Bank Group. LARI has a broad agenda. Its main concern is how the economy can realize the full value of land and real estate assets and how to extend those benefits to the poor. There will be three clusters of activities:

The "why" cluster, or the rationale for focusing on the relationship between land and real estate, on the one hand, and growth, stability, and distributional issues, on the other.

The "how-to" cluster, or the methodology for achieving the desired productivity and distributional gains, with a focus on regulation, property rights, market institutions, and transaction costs.

The "what" cluster, or the products (loans and advice) that need to be developed by the World Bank Group and other research and professional organizations.

Another important goal of LARI is to help build an information network on who is who and of research and professional organizations active in the area of land and real estate. Participants who belong to an organization interested in sharing information about its resources with others should e-mail Razzaz (not landecon, which will soon be inactive) with the organization's name, address (including email and web page, if applicable), and main areas of work and competence. This information will be fed into an information network the Bank is building, which will be open and available to all and should help reduce information barriers in the field.

In conclusion, Razzaz thanked Kerry McNamara and Ron Kim for technical management of the conference, Andrea Hodson and Pat McNees for editing the weekly summaries, and Zeynep Ersel for posting messages and making sure the "virtual" conference ran smoothly. Participants also thanked Razzaz and the World Bank for hosting the conference.

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