Jump to ContentJump to Main Navigation
Show Summary Details
More options …

Review of Law & Economics

Editor-in-Chief: Parisi, Francesco / Engel, Christoph

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

3 Issues per year

CiteScore 2017: 0.30

SCImago Journal Rank (SJR) 2017: 0.195
Source Normalized Impact per Paper (SNIP) 2017: 0.410

See all formats and pricing
More options …
Volume 12, Issue 2


Takings and Tax Revenue: Fiscal Impacts of Eminent Domain

Carrie B. Kerekes / Dean Stansel
  • Corresponding author
  • Economics and Finance, Lutgert College of Business, Florida Gulf Coast University, Fort Myers, Florida, USA
  • Email
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
Published Online: 2015-08-20 | DOI: https://doi.org/10.1515/rle-2015-0001


In the landmark 2005 Kelo case, the Supreme Court ruled that eminent domain takings for private development constituted permissible “public use” because of their potential to produce higher revenue. This paper provides the first examination of that relationship between eminent domain activity and state and local revenue. We find virtually no evidence of a positive relationship between the number of eminent domain takings for private use (such as the one that led to the Kelo decision) and the level of revenue. We find some limited evidence of a negative relationship between eminent domain and future revenue growth.

Keywords: eminent domain; state tax revenue; local tax revenue; takings

JEL: K11; H7; R5


  • Acemoglu, D. and S. Johnson. 2005. “Unbundling Institutions,” 113 Journal of Political Economy 949–995.Google Scholar

  • Acemoglu, D., S. Johnson and J.A. Robinson. 2001. “The Colonial Origins of Comparative Development: An Empirical Investigation,” 91 The American Economic Review 1369–1401.Google Scholar

  • Acemoglu, D., S. Johnson and J.A. Robinson. 2002. “Reversal of Fortunes: Geography and Institutions in the Making of the Modern World Income,” 117 Quarterly Journal of Economics 1231–1294.Google Scholar

  • Allen, C. 2014. “Kelo Revisited: Properties Were Seized and a Neighborhood Razed in the Name of ‘Economic Development’ That Never Came,” 19 The Weekly Standard February 10.Google Scholar

  • Benson, B.L. ed. 2010. Property Rights: Eminent Domain and Regulatory Takings Re-Examined. Oakland, CA: The Independent Institute.Google Scholar

  • Berliner, D. 2003. Public Power, Private Gain. Washington, DC: Institute for Justice.Google Scholar

  • Berliner, D. 2006. Opening the Floodgates: Eminent Domain Abuse in the Post-Kelo World. Washington, D.C: Institute for Justice.Google Scholar

  • Besley, T. 1995. “Property Rights and Investment Incentives: Theory and Evidence From Ghana,” 103 The Journal of Political Economy 903–937.Web of ScienceGoogle Scholar

  • Boettke, P.J. 1994. “The Political Infrastructure of Economic Development,” 13 Human Systems Management 89–100.Google Scholar

  • Boettke, P.J. and C.J. Coyne. 2003. “Entrepreneurship and Development: Cause or Consequence?” 6 Advances in Austrian Economics 67–88.Google Scholar

  • Boettke, P.J., C.J. Coyne and P.T. Leeson. 2010. “Land Grab: Takings, the Market Process, and Regime Uncertainty,” in B.L. Benson, ed. Property Rights: Eminent Domain and Regulatory Takings Re-Examined. Oakland, CA: The Independent Institute.Google Scholar

  • Brennan, G. and J. Buchanan. 1980. The Power to Tax: Analytical Foundations of a Fiscal Constitution. Cambridge: Cambridge University Press.Google Scholar

  • Carpenter, D.M. and J.K. Ross. 2008. Doomsday? No Way: Economic Trends and Post-Kelo Eminent Domain Reform. Washington, DC: Institute for Justice.Google Scholar

  • Cohen, C.E. 2006. “Eminent Domain After Kelo v. City of New London: An Argument for Banning Economic Development Takings,” 29 Harvard Journal of Law and Public Policy 491–568.Google Scholar

  • de Soto, H. 1989. The Other Path. New York: Basic Books.Google Scholar

  • de Soto, H. 2000. The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. New York: Basic Books.Google Scholar

  • Epstein, R.A. 1985. Takings: Private Property and the Power of Eminent Domain. Cambridge, MA: Harvard University Press.Google Scholar

  • Greenhut, S. 2004. Abuse of Power: How the Government Misuses Eminent Domain. Santa Ana, CA: Steven Locks Press.Google Scholar

  • Hayek, F.A. 1945. “The Use of Knowledge in Society,” 35 American Economic Review 519–530.Google Scholar

  • Hayek, F.A. 1960. The Constitution of Liberty. Chicago: University of Chicago Press.Google Scholar

  • Kerekes, C.B. 2011. “Government Takings: Determinants of Eminent Domain,” 13 American Law and Economics Review 201–219.Web of ScienceGoogle Scholar

  • Kerekes, C.B. and C.R. Williamson. 2008. “Unveiling De Soto’s Mystery: Property Rights, Capital Formation, and Development,” 4 Journal of Institutional Economics 299–325.Google Scholar

  • Knack, S. and P. Keefer. 1995. “Institutions and Economic Performance: Cross Country Tests Using Alternative Institutional Measures,” 7 Economics and Politics 207–228.Google Scholar

  • Landau, D. 2003. “A Simple Theory of Economic Growth,” 52 Economic Development and Cultural Change 217–325.CrossrefGoogle Scholar

  • Lanza, S.P., T.J. Miceli, C.F. Sirmans and M. Diop. 2013. “The Use of Eminent Domain for Economic Development in the Era of Kelo,” 27 Economic Development Quarterly 352–362.CrossrefGoogle Scholar

  • Leblang, D.A. 1996. “Property Rights, Democracy and Economic Growth,” 49 Political Research Quarterly 5–26.CrossrefGoogle Scholar

  • Lopez, E.J., C.B. Kerekes and G.D. Johnson. 2007. “Make Property Rights Stronger: Limit Eminent Domain,” in R.S. Sobel, ed. Unleashing Capitalism: Why Prosperity Stops at the West Virginia State Line and How to Fix It. Morgantown, WV: The Public Policy Foundation of West Virginia.Google Scholar

  • Lopez, E.J., R. Todd Jewel and N.D. Campbell. 2009. “Pass a Law, Any Law, Fast! State Legislative Responses to the Kelo Backlash,” 5 Review of Law and Economics 101–135.Google Scholar

  • Lopez, E.J. and S.M. Totah. 2007. “Kelo and Its Discontents: The Best (or Worst) Thing to Happen to Property Rights?” 11 The Independent Review 681–712.Google Scholar

  • Mauro, P. 1995. “Corruption and Growth,” 110 The Quarterly Journal of Economics 681–712.Google Scholar

  • McGeehan, P. 2009. “Pfizer to Leave City That Won Land-Use Case,” The New York Times November 13, A1.

  • Ranis, P. 2007. “Eminent Domain: Unused Tool for American Labor?” 10 Working USA: The Journal of Labor and Society 193–208.Google Scholar

  • Sandefur, T. 2006a. “The Backlash so Far: Will Americans Get Meaningful Eminent Domain Reform?” 3 Michigan State Law Review 709–777.Google Scholar

  • Sandefur, T. 2006b. “Playing the Takings Game: How Government Regulates Away Property Rights,” Goldwater Institute Policy Report 210.

  • Somin, I. 2007. “Is Post-Kelo Eminent Domain Reform Bad for the Poor?” 101 Northwestern University Law Review 1931–1943.Google Scholar

  • Somin, I. 2009. “The Limits of Backlash: Assessing the Political Response to Kelo,” 93 Minnesota Law Review 2100–2178.Google Scholar

  • Stansel, D. 2006. “Interjurisdictional Competition and Local Government Spending in U.S. Metropolitan Areas,” 34 Public Finance Review 173–194.CrossrefGoogle Scholar

  • Turnbull, G.K. and R.F. Salvino. 2009. “Do Broader Eminent Domain Powers Increase Government Size?” 5 Review of Law and Economics 785–806.Google Scholar

  • Turnbull, G.K., R.F. Salvino and M.T. Tasto. 2013. “Does the Power to Use Eminent Domain for Economic Development Actually Enhance Private Sector Employment?” in R.F. Salvino, M.T. Tasto, and G.M. Randolph, eds. Entrepreneurial Action, Public Policy, and Economic Outcomes. Northampton, MA: Edward Elgar Publishing Limited.Google Scholar

  • von Mises, L. 1935. “Economic Calculation in the Socialist Commonwealth,” in F.A. Hayek, ed. Collectivist Economic Planning. London: George Routledge & Sons. Originally published as “Die Wirtschaftsrechnung im sozialistischen Gemeinwesen” in the Archiv für Sozialwissenschaften, vol. 47, 1920.Google Scholar

About the article

Published Online: 2015-08-20

Published in Print: 2016-07-01

Citation Information: Review of Law & Economics, Volume 12, Issue 2, Pages 275–309, ISSN (Online) 1555-5879, ISSN (Print) 2194-6000, DOI: https://doi.org/10.1515/rle-2015-0001.

Export Citation

©2016 by De Gruyter.Get Permission

Comments (0)

Please log in or register to comment.
Log in