Entrepreneurial Action, Public Policy, and Economic Outcomes

Entrepreneurial Action, Public Policy, and Economic Outcomes

New Thinking in Political Economy series

Edited by Robert F. Salvino Jr., Michael T. Tasto and Gregory M. Randolph

Examining the economics of entrepreneurship from the perspectives of productive versus unproductive entrepreneurial behavior and the role of institutions in economic outcomes, the authors in this book seek to advance the research on institutions by providing a simple framework to analyze the broader, long-term consequences of economic policies. They examine the relationship between economic freedom and economic outcomes and summarize empirical evidence and theory. The book also provides practical policy solutions that are based on the authors' cogent analyses.

Chapter 7: Does the power to use eminent domain for economic development actually enhance economic development?

Geoffrey K. Turnbull, Robert F. Salvino Jr. and Michael T. Tasto

Subjects: business and management, entrepreneurship, economics and finance, austrian economics, politics and public policy, public policy

Abstract

The use of eminent domain for economic development has undergone intense scrutiny after the latest housing crisis and recession. Using a broad interpretation of the takings clause of the Fifth Amendment, local and state governments have increasingly justified the use of eminent domain in their efforts to provide jobs. Past studies have examined this use of eminent domain from the perspective of property rights and the scope and size of government. This chapter attempts to answer perhaps a more fundamental question. Do states that have liberal eminent domain actually enjoy greater economic growth? The empirical results do not support the employment growth motivation for eminent domain.

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