There is a large body of literature that discusses the control of settlement patterns using traditional planning instruments. Whilst there is some theoretical literature discussing the use of development charges to influence settlement patterns by addressing market failure, there is limited literature examining how such charging is implemented in practice. This paper presents the theoretical basis for development charging based on the Pigouvian tradition and discusses how these charges can be calibrated. It identifies the potential for second-best approaches, including hypothecation of revenues. This approach is distinguished from infrastructure charging which is a cost-recovery instrument. The Irish system of infrastructure charging is assessed as a means of exploring how current instrument design could be improved to align with policy aspirations using the lessons that theory provides.
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