On the Legitimacy of Economic Development Takings

Abstract

For most governments, facilitating economic growth is a top priority. Sometimes, in their pursuit of this objective, governments interfere with private property. Often, they do so by indirect means, for instance through their power to regulate permitted land uses or by adjusting the tax code. However, many governments are also prepared to use their power of eminent domain in the pursuit of economic development. That is, they sometimes compel private owners to give up their property to make way for a new owner that is expected to put the property to a more economically profitable use.

This thesis asks how the law should respond to government actions of this kind, often referred to as economic development takings. The thesis makes two main contributions in this regard. First, in Part I, it proposes a theoretical foundation for reasoning about the legitimacy of economic development takings, including an assessment of possible standards for judicial review. Moreover, the thesis links the legitimacy question to the work done by Elinor Ostrom and others on sustainable management of common pool resources. Specifically, it is argued that using institutions for local self-governance to manage development potentials as common pool resources can potentially undercut arguments in favour of using eminent domain for economic development.

Then, in Part II, the thesis puts the theory to the test by considering takings of property for hydropower development in Norway. It is argued that current eminent domain practices appear illegitimate, according to the normative theory developed in Part I. At the same time, the Norwegian system of land consolidation offers an alternative to eminent domain that is already being used extensively to facilitate community-led hydropower projects. The thesis investigates this as an example of how to design self-governance arrangements to increase the democratic legitimacy of decision-making regarding property and economic development.