Private Property and Takings Compensation

Private Property and Takings Compensation

Theoretical Framework and Empirical Analysis

Yun-chien Chang

This innovative volume offers a thorough breakdown of the issues surrounding takings compensation – payments made as reimbursement for government takeover of private property. Using examples from New York City and Taiwan, Yun-chien Chang discusses the advantages and disadvantages of different methods of compensation and offers insightful suggestions for future implementation.

Chapter 5: Taiwan 1977–2009 and condemnors’ incentives

Yun-chien Chang

Subjects: economics and finance, law and economics, law - academic, law and economics, politics and public policy, public policy

Extract

This chapter conducts a case study of Taiwan’s takings compensation practices starting in 1977. In Taiwan, takings compensation is determined by official land value (which systematically deviates from fair market value) plus certain bonus compensation at local governments’ discretion. By analyzing how local governments set official land value and the bonus compensation, this chapter ascertains whether local governments maximize political interests or minimize takings compensation—that is, whether the fiscal illusion theory or the political interest theory is supported by empirical evidence. In addition, Taiwan’s post-1977 regime implements the ex ante assessment by non-landowners method. The empirical analysis here can examine whether this method produces accurate assessments of property value.

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