The Long-Term Impact of Kelo v. City of New London: Comparing State Legislative and Judicial Responses

Lopez Edward J. (), Pace H. Justin () and Murphy Jon ()
Additional contact information
Lopez Edward J.: Professor of Economics and Distinguished Professor of Capitalism, Western Carolina University, Cullowhee, NC 28723, USA
Pace H. Justin: Associate Professor of Business Law and Director of the School of Accounting, Finance, Information Systems, and Business Law, Western Carolina University, Cullowhee, NC 28723, USA
Murphy Jon: Assistant Professor of Economics, 7881 Nicholls State University , Thibodaux, LA, USA

Review of Law & Economics, 2025, vol. 21, issue 3, 597-627

Abstract: After 20 years since the U. S. Supreme Court ruling in Kelo v City of New London, the academic literature has mostly dried up. Yet cases of economic development takings continue to emerge across the country. This paper revisits some of the main issues from a law and economics perspective. What are the long-term effects of the Kelo ruling and the state reforms it spawned? How effective have regulations been in accomplishing their goals of reducing inefficient economic development takings? We review the quantitative literature that compared the 50 states’ legislative and judicial responses to Kelo, and then present a comparative case study of two states: Michigan, which enacted significant reforms, and North Carolina, which enacted relatively mild reforms. Over time, developers and local or state authorities explore increasingly creative ways to extract rents through loophole mining, boosted by a diminished spotlight. Thus, relatively strong takings powers that may appear efficient in the short run may, in the long run, lead to greater inefficiencies than intended, implying that stricter regulations may become more necessary in the long-run to maintain efficiency.

Keywords: eminent domain; economic development takings; holdout problem; property rights (search for similar items in EconPapers)
JEL-codes: K11 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/rle-2025-0005 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:rlecon:v:21:y:2025:i:3:p:597-627:n:1004

Ordering information: This journal article can be ordered from
https://www.degruyte ... journal/key/rle/html

DOI: 10.1515/rle-2025-0005

Access Statistics for this article

Review of Law & Economics is currently edited by Francesco Parisi

More articles in Review of Law & Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().