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Land Grab: Takings, the Market Process, and Regime Uncertainty

PROPERTY WRONGS: THE LAW AND ECONOMICS OF TAKINGS, Bruce L. Benson, ed., New York: Palgrave Macmillan, 2010.

Posted: 16 Jan 2008 Last revised: 1 Nov 2010

Peter J. Boettke

George Mason University - Department of Economics

Christopher J. Coyne

George Mason University - Department of Economics

Peter T. Leeson

George Mason University - Department of Economics

Date Written: October 7, 2007

Abstract

Property rights are a key aspect of the rules governing economic interactions, providing individuals with dependable information and incentives. Well-defined and stable property rights encourage the effective use of existing scarce resources and also provide the incentive to innovate. In this context, we explore the impact of government takings on entrepreneurship and the market process. By changing the rules of the game, takings distorts the market process by shifting the opportunities and incentives facing entrepreneurs. The use of takings also introduces "regime uncertainty" whereby the predictability of the rules of the game is weakened. These costs of takings are typically overlooked because they involve unrealized entrepreneurial opportunities that cannot be captured in standard cost-benefit calculations.

Keywords: Eminent Domain, Takings, Entrepreneurship, Regime Uncertainty

JEL Classification: L26, B53

Suggested Citation

Boettke, Peter J. and Coyne, Christopher J. and Leeson, Peter T., Land Grab: Takings, the Market Process, and Regime Uncertainty (October 7, 2007). PROPERTY WRONGS: THE LAW AND ECONOMICS OF TAKINGS, Bruce L. Benson, ed., New York: Palgrave Macmillan, 2010. . Available at SSRN: https://ssrn.com/abstract=1083389

Peter J. Boettke

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

Christopher J. Coyne (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

Peter T. Leeson

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://www.peterleeson.com

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