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Land acquisition: Political intervention, fragmentation and voice

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  • Chowdhury, Prabal Roy

Abstract

This 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) – formalized as landowners having sophisticated present-biased preferences. We then use this framework to analyze two issues of interest, political intervention and fragmentation. We find that politicization cannot improve efficiency if holdout is landowner-induced, and may even increase inefficiency if holdout is buyer-induced. Further, the extent of politicization depends on whether it involves voice for non-members or not. Turning to the effects of fragmentation, we find that while it increases holdout in the absence of politicization, in the presence of politicization this effect may, however, be reversed.

Suggested Citation

  • Chowdhury, Prabal Roy, 2013. "Land acquisition: Political intervention, fragmentation and voice," Journal of Economic Behavior & Organization, Elsevier, vol. 85(C), pages 63-78.
  • Handle: RePEc:eee:jeborg:v:85:y:2013:i:c:p:63-78
    DOI: 10.1016/j.jebo.2012.11.003
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    Cited by:

    1. Bhattacharya, Sourav & Kundu, Tapas, 2014. "Resistance, redistribution and investor-friendliness," Journal of Development Economics, Elsevier, vol. 109(C), pages 124-142.

    More about this item

    Keywords

    Land acquisition; Sophisticated present-biased preferences; Holdout; Fragmentation; Politics; Voice; Collective bargaining;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, 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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