Property Takings in Developed Versus Developing Countries: Economics, Politics, and the Limits of the Holdout Problem

Abstract:     
In the spirit of the Upton Forum, I will take this opportunity to compare and contrast takings in developing versus developed countries (specifically the United States). I will argue that takings differ in the two realms by the political processes through which they pass, which reflects the different institutional and ideological contexts through which they are enacted. These political differences help explain the fact that the distributional effects operate in opposing directions in the two settings: from rich to poor in developing countries but from poor to rich in the United States. Yet there is an important similarity as well. Takings in both developed and developing countries alter people’s incentives for maintaining and investing in their property. This paper explores these margins of contrast between takings in the developed versus developing world, and then discusses implications for the primary economic justification of the takings power, known as the holdout problem. The holdout problem is an argument based on economic efficiency, but it does not account for two sources of inefficiency that I highlight here.

Number of Pages in PDF File: 27

Accepted Paper Series