Growth Under the Shadow of Expropriation? The Economic Impacts of Eminent Domain

87 Pages Posted: 10 May 2023

See all articles by Daniel L. Chen

Daniel L. Chen

Directeur de Recherche, Centre National de la Recherche Scientifique, Toulouse School of Economics, Institute for Advanced Study in Toulouse, University of Toulouse Capitole, Toulouse, France

Susan Yeh

Charles River Associates (CRA)

Multiple version iconThere are 3 versions of this paper

Abstract

Is it justified for states to appropriate private property rights? If so, should governments regulate or expropriate? Competing models predict that government power of appropriation causes underinvestment, overinvestment, and growth. We use random assignment of U.S. federal court judges setting geographically-local precedent to document all three mechanisms. Government power increased expropriation, highway construction, property values, and growth, especially in government, transportation, and construction as well as agriculture, retail, and financial sectors, but increased displacement of racial minorities, who became more likely to be unemployed and live in public housing. These results are consistent with minority Democrat judges being more likely to strike down government expropriations while Republican former federal prosecutors being more likely to uphold them. However, government power to regulate did not increase displacement or racial inequality, while spurring growth and property values, suggesting that regulation relative to expropriation may be more Pareto improving.

Keywords: Property rights, displacement, Regulation, takings

Suggested Citation

Chen, Daniel L. and Yeh, Susan, Growth Under the Shadow of Expropriation? The Economic Impacts of Eminent Domain. Available at SSRN: https://ssrn.com/abstract=4444409 or http://dx.doi.org/10.2139/ssrn.4444409

Daniel L. Chen (Contact Author)

Directeur de Recherche, Centre National de la Recherche Scientifique, Toulouse School of Economics, Institute for Advanced Study in Toulouse, University of Toulouse Capitole, Toulouse, France ( email )

Toulouse School of Economics
1, Esplanade de l'Université
Toulouse, 31080
France

Susan Yeh

Charles River Associates (CRA) ( email )

1201 F. St. NW
Ste. 700
Washington, DC 20004
United States

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

Paper statistics

Downloads
7
Abstract Views
77
PlumX Metrics