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Public Use or Abuse? The Use of Eminent Domain for Economic Development in the Era of \textit{Kelo}

Author

Listed:
  • Moussa Diop

    (Pennsylvania State University)

  • Steven P. Lanza

    (University of Connecticut)

  • Thomas J. Miceli

    (University of Connecticut)

  • C. F. Sirmans

    (Florida State University)

Abstract

The Supreme Court decision in Kelo v. New London (2005) authorized the use of eminent domain for economic redevelopment projects provided that there are sufficient spillover benefits to the public in the form of enhanced taxes and new jobs. This paper examines the economic basis for this decision, and tests the conclusions using cross-state data on economic development takings. It also examines the factors underlying the political actions by states to limit such takings following the Kelo decision. The results are consistent with the economic justification for eminent domain as a means of overcoming holdout problems associated with land assembly.

Suggested Citation

  • Moussa Diop & Steven P. Lanza & Thomas J. Miceli & C. F. Sirmans, 2010. "Public Use or Abuse? The Use of Eminent Domain for Economic Development in the Era of \textit{Kelo}," Working papers 2010-28, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2010-28
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    More about this item

    Keywords

    Economic development; eminent domain; holdout problem; takings;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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