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Review of Law & Economics

Editor-in-Chief: Parisi, Francesco

Ed. by Cooter, Robert D. / Gómez Pomar, Fernando / Kornhauser, Lewis A. / Parchomovsky, Gideon / Engel, Christoph

SCImago Journal Rank (SJR) 2015: 0.196
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Pass a Law, Any Law, Fast! State Legislative Responses to the Kelo Backlash

Edward J. Lopez1 / R. Todd Jewell2 / Noel D. Campbell3

1Department of Economics, San José State University

2Department of Economics, University of North Texas

3EFIRM, University of Central Arkansas

Citation Information: Review of Law & Economics. Volume 5, Issue 1, Pages 101–135, ISSN (Online) 1555-5879, DOI: 10.2202/1555-5879.1268, April 2009

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In Kelo v. City of New London, the U.S. Supreme Court left it to the states to protect property against takings for economic development. Since Kelo, thirty-seven states have enacted legislation to update their eminent domain laws. This paper is the first to theoretically and empirically analyze the factors that influence whether, in what manner, and how quickly states change their laws through new legislation. Fourteen of the thirty-seven new laws offer only weak protections against development takings. The legislative response to Kelo was responsive to measures of the backlash but only in the binary decision whether to pass any new law. The decision to enact a meaningful restriction was more a function of relevant political economy measures. States with more economic freedom, greater value of new housing construction, and less racial and income inequality are more likely to have enacted stronger restrictions, and sooner. Of the thirteen states that have not updated, Arkansas, Oklahoma and Mississippi are highly likely to do so in the future. Hawaii, Massachusetts and New York are unlikely to update at all.

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