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Power, Property Rights, and the Dynamics of Local Wealth Appropriation

Author

Listed:
  • Dan Cao
  • Roger Lagunoff
  • Yingqi Xu

Abstract

We examine the dynamic connections between local wealth inequality and the local politics of property rights. A jurisdiction comprises a politically dominant in-group and a marginalized out-group. At each date, the jurisdiction exploits weaknesses in due process rights under the legal system to redistribute property claims away from the out-group and toward the in-group. It combines takings and zoning with the leveraging of public assets to deter legal challenges. This leverage varies over time and depends on status quo effects and asymmetries in legal treatment of assets. The results show how local politics and policies are linked to wealth disparities.

Suggested Citation

  • Dan Cao & Roger Lagunoff & Yingqi Xu, 2026. "Power, Property Rights, and the Dynamics of Local Wealth Appropriation," American Economic Journal: Microeconomics, American Economic Association, vol. 18(1), pages 59-104, February.
    • Handle: RePEc:aea:aejmic:v:18:y:2026:i:1:p:59-104
    DOI: 10.1257/mic.20240004
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H13 - Public Economics - - Structure and Scope of Government - - - Economics of Eminent Domain; Expropriation; Nationalization
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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