Is the Government Fiscally Blind? An Empirical Examination of the Effect of the Compensation Requirement on Eminent Domain Exercises

33 Pages Posted: 24 Jun 2015 Last revised: 2 Feb 2023

See all articles by Ronit Levine-Schnur

Ronit Levine-Schnur

Reichman University - Interdisciplinary Center (IDC) Herzliyah - Harry Radziner School of Law

Gideon Parchomovsky

Hebrew University of Jerusalem - Faculty of Law; University of Pennsylvania Carey Law School

Date Written: January 5, 2016

Abstract

We empirically test the fiscal illusion hypothesis in the takings context. Israeli law allows local governments to expropriate up to 40% of any parcel without compensation. In 2001, the Israeli Supreme Court created a carve-out for takings of 100%, requiring full compensation in such cases. We analyzed data for 3,140 takings cases in Tel Aviv between 1990 and 2014. There was no disproportionate share of takings of just under 40%. Nor was there a long-term drop in the share of 100% takings post-2001. Although a short-term drop in the share of 100% takings followed the 2001 decision, the trend was later reversed, and the share of 100% takings surpassed the pre-2001 level. Our findings do not corroborate the fiscal illusion hypothesis in its strict form. Rather, they lend qualified support to the hypothesis that takings practices are largely shaped by planning needs and fairness considerations.

Keywords: Eminent Domain, Fiscal Illusion, Takings

JEL Classification: K00, K11

Suggested Citation

Levine-Schnur, Ronit and Parchomovsky, Gideon, Is the Government Fiscally Blind? An Empirical Examination of the Effect of the Compensation Requirement on Eminent Domain Exercises (January 5, 2016). 45 Journal of Legal Studies 439 (2016), U of Penn, Inst for Law & Econ Research Paper No. 15-34, Available at SSRN: https://ssrn.com/abstract=2621778

Ronit Levine-Schnur (Contact Author)

Reichman University - Interdisciplinary Center (IDC) Herzliyah - Harry Radziner School of Law

Israel

Gideon Parchomovsky

Hebrew University of Jerusalem - Faculty of Law ( email )

Mount Scopus
Mount Scopus, IL 91905
Israel

University of Pennsylvania Carey Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-1603 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
86
Abstract Views
1,331
Rank
539,512
PlumX Metrics