Land acquisition: Political intervention, voice and fragmentation
AbstractThis paper develops a simple dynamic framework of holdout in land acquisition (both with and without political intervention), where holdout arises because of the landowners' inability to manage large sums of money (and consequent lack of inter-temporal consumption smoothing in case of sale). We then use this framework to analyze two issues, political intervention and fragmentation, showing that the results depend on a subtle interaction of voice, collective bargaining and the severity of fragmentation. Political intervention leads to a large party size (and is consequently more likely) in case it leads to voice for both members and non-members, but not otherwise. Moreover, under both these scenarios, politicization may lead to inefficiency. Further, the efficiency implications of fragmentation also depend on the nature of politicization, with fragmentation increasing holdout in the absence of politicization.
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Bibliographic InfoPaper provided by Indian Statistical Institute, New Delhi, India in its series Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers with number 10-05.
Length: 31 pages
Date of creation: Jul 2010
Date of revision:
Land acquisition; holdout; fragmentation; politics; voice; collective bargaining;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
- R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
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