A Bargaining Model of Holdouts and Takings

The holdout problem is commonly cited as the justification foreminent domain, but the nature of the problem is not well understood.This article models the holdout problem in a bargaining framework,where a developer seeks to acquire several parcels of land fora large-scale development. We show that in the absence of eminentdomain, holdouts are a significant threat, resulting in costlydelay. However, if the developer has the power to use eminentdomain to acquire the land from holdouts, all sellers will bargain,thus avoiding delay. An offsetting cost is that owners may negotiateprices below their true value, possibly resulting in excessivetransfer of land to the developer.     

An International Comparison of the Incidence of Public Sector Whistle‐Blowing and the Prediction of Retaliation: Australia,Norway, and the US

We compare results of several large‐scale survey studies of whistle‐blowing by public sector employees, from samples in Australia, Norway, and the United States. Specifically, we review incidence rates of wrongdoing, whistle‐blowing and retaliation, as perceived by thousands of respondents employed by many government agencies in these countries. Despite differences in measurement in the studies and variation in results, findings suggest that wrongdoing was quite frequently observed and was reported in many cases. Retaliation resulted for far fewer than half of the whistle‐blowers, in all three nations. We also compare findings from the various studies concerning variables that predicted retaliation against whistle‐blowers in the different samples. Differences in results across the three countries add to existing evidence that country and workplace cultures can affect the whistle‐blowing process.     

The Demand for Land Title Registration: Theory with Evidence from Kenya

This article examines the role of title registration in providingsecurity of property rights for landowners. A simple model isdeveloped to examine the trade-off between increased securityof registering title against the administrative costs of accessingthe system. The model predicts that the demand for registrationshould be increasing in the value of the land, the educationof the landowner, and proximity to the central government (thelatter two being measures of the cost of accessing the system).Evidence on land registration in Kenya provides support forthe model.     

Title Assurance and Incentives for Efficient Land Use

This paper develops an economic analysis of a general class of land title systems, focusing specifically on incentives for efficient exchange and investment in land. The analysis abstracts from certain institutional features of actual title systems, and is therefore largely normative in nature. Nevertheless, the results are relevant for a complete evaluation of alternative systems, especially for countries where land development (or redevelopment) is a primary objective. The results suggest that in most cases, land registration is preferred to the recording system on exchange and investment grounds, holding other factors constant.     

Credible Criminal Enforcement

Economic models of crime and punishment implicitly assume that the government can credibly commit to the fines, sentences, and apprehension rates it has chosen. We study the government’s problem when credibility is an issue. We find that several of the standard predictions of the economic model are altered when commitment is taken into account. Specifically, when only fines are used, commitment results in a lower apprehension rate and hence a higher crime rate. However, when jail is used (with or without fines), apprehension rates and jail terms may be higher or lower compared to the optimal static policy.JEL K14, K42     

Toward a Comparative Economics of Plea Bargaining

We attempt to open a path to the comparative analysis of criminal procedure by superimposing the efficiency principle onto an adversarial system characterized by an aversion to false convictions and an inquisitorial system characterized by a desire to justly punish the guilty. We begin with a general model of plea bargaining, embed it in a larger framework that addresses the costs of adjudication, the value of punishing the guilty and the costs of false convictions, and then link the desirability of plea bargaining and compulsory prosecution to the weights given these costs and benefits in the objective function. We examine the judicial endorsement of plea bargaining in the United States and the debate over European analogs to plea bargaining in light of the model, and conclude that plea bargaining will increase social welfare in adversarial systems but not in inquisitorial ones.     

Free riders, holdouts, and public use: a tale of two externalities

Free riders and holdouts are distinct market failures that potentially impede the completion of otherwise beneficial transactions. The key difference is that the free rider problem is a demand side externality that requires taxation to compel payment for a public good, while the holdout problem is a supply side externality that requires eminent domain to force the sale of land for large scale projects. This paper highlights the distinction between these two problems and uses the resulting insights to clarify the meaning of the public use requirement of the Fifth Amendment takings clause.     

Public goods, taxes, and takings

Blume, Rubinfeld, and Shapiro [Blume, L., Rubinfeld, D., & Shapiro, P. (1984). The taking of law: When should compensation be paid? Quarterly Journal of Economics, 99, 71–92] first showed that compensation for takings can lead to a moral hazard problem that results in overinvestment in land suitable for public use. To the contrary, this paper shows that when compensation is financed by a proportional property tax, the compensation rule is irrelevant regarding the level of investment landowners make in their property, as well as the amount of land they authorize the government to acquire, both of which will be efficient. Intuitively, landowners recognize the equivalence of taxes and takings in budgetary terms, causing the distortionary effects of compensation and property taxation to cancel each other out through the balanced budget condition.