The Political Economy of Public Use in Poletown: How Federal Grants Encourage Excessive Use of Eminent Domain

29 Pages Posted: 10 Jan 2005  

William A. Fischel

Dartmouth College - Department of Economics

Date Written: February 2005

Abstract

This article argues that the use of eminent domain that was at issue in Poletown [304 N.W.2d 455 (Mich. 1981)] was flawed by fiscal constraints. The funding for the project, which leveled a thickly-settled neighborhood of Detroit in order to build an automobile plant, was provided almost entirely by the federal government. I argue that it is unlikely that the city of Detroit would have undertaken the project if it was required to raise its own funds to finance it or if the money had been given to the city by the federal government to do with as it pleased. The Michigan Supreme Court's intentions in Hathcock [684 N.W.2d 765 (Mich. 2004)] to forestall the use of eminent domain for Poletown-like economic development would be better served by an inquiry into the nature of the financing of the projects than a categorical ban on them.

Keywords: Eminent domain, public use, takings clause, local taxes, intergovernmental grants

JEL Classification: K11, H7

Suggested Citation

Fischel, William A., The Political Economy of Public Use in Poletown: How Federal Grants Encourage Excessive Use of Eminent Domain (February 2005). Available at SSRN: https://ssrn.com/abstract=645402 or http://dx.doi.org/10.2139/ssrn.645402

William A. Fischel (Contact Author)

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States
603-646-2940 (Phone)
603-646-2122 (Fax)

HOME PAGE: http://www.dartmouth.edu/~wfischel/

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