American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Power, Property Rights, and the Dynamics of Local Wealth Appropriation
American Economic Journal: Microeconomics
(pp. 59–104)
Abstract
We examine the dynamic connections between local wealth inequality and the local politics of property rights. A jurisdiction comprises a politically dominant in-group and a marginalized out-group. At each date, the jurisdiction exploits weaknesses in due process rights under the legal system to redistribute property claims away from the out-group and toward the in-group. It combines takings and zoning with the leveraging of public assets to deter legal challenges. This leverage varies over time and depends on status quo effects and asymmetries in legal treatment of assets. The results show how local politics and policies are linked to wealth disparities.Citation
Cao, Dan, Roger Lagunoff, and Yingqi Xu. 2026. "Power, Property Rights, and the Dynamics of Local Wealth Appropriation." American Economic Journal: Microeconomics 18 (1): 59–104. DOI: 10.1257/mic.20240004Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H13 Economics of Eminent Domain; Expropriation; Nationalization
- H77 Intergovernmental Relations; Federalism; Secession
- K11 Property Law
- P14 Capitalist Systems: Property Rights
- R52 Regional Government Analysis: Land Use and Other Regulations