EconPapers    
Economics at your fingertips  
 

Takings of Land by Self-Interested Governments: Economic Analysis of Eminent Domain

Hans-Bernd Schäfer () and Ram Singh ()

Journal of Law and Economics, 2018, vol. 61, issue 3, 427 - 459

Abstract: In this paper, we model and examine the effects of two salient features of eminent-domain law and its use. First, the compensation is less than full. Second, the government is not a perfect agent of society. Once these features are taken into account, several claims in the existing literature do not hold. Our results question the fiscal illusion theory. We show that full compensation ensures efficiency neither of the takings nor of the investment decisions. Moreover, departure from efficiency can get worse with the tightening of budget constraints. However, undercompensation, combined with the provision of restitution, delivers a better outcome in terms of investment choices by the owners and the taking decisions and choice of projects by the government. Furthermore, we show that fixed-compensation schemes generally are not efficient even if the government is benevolent, but undercompensation can still deliver an outcome more efficient than full compensation.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1086/699242 (application/pdf)
http://dx.doi.org/10.1086/699242 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: Takings of Land by Self-interested Governments Economic Analysis of Eminent Domain (2017) Downloads
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:ucp:jlawec:doi:10.1086/699242

Access Statistics for this article

More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().

 
Page updated 2025-03-31
Handle: RePEc:ucp:jlawec:doi:10.1086/699242