The Politics of Takings Clauses

Abstract

A long-standing consensus exists that the arbitrary or excessive expropriation of private property by a country hurts its economic growth. Although constitutions can play an important role in protecting private property, remarkably little is known about how they actually restrict the power of eminent domain and whether such restrictions are associated with reduced de facto expropriation risks. The main finding of this essay is that no observable relationship exists between de jure constitutional restrictions on the power of eminent domain and de facto expropriation risks. This finding suggests that the effectiveness of takings clauses might depend on the politics surrounding their adoption.