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Status Quo Property Protection in Politico-Legal Systems

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Abstract

This paper models status quo (SQ) protection of property rights. A politico-legal system determines eligibility of citizen groups for protection. A ruling authority can reallocate property if and only if reallocation is preferable to the status quo for one such group. Along the solution path, SQ protections distort allocations across different assets and different property owners. Asset distortions vanish in the limit as the path converges to a stationary assignment. Ownership distortions vanish in the limit if no individuals belong to every eligible group. If the authority is self-interested, systemic protection of vulnerable groups may be welfare improving.

Citation

Lagunoff, Roger. 2023. "Status Quo Property Protection in Politico-Legal Systems." American Economic Review: Insights, 5 (2): 191-206. DOI: 10.1257/aeri.20220091

Additional Materials

JEL Classification

  • D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
  • H13 Economics of Eminent Domain; Expropriation; Nationalization
  • K11 Property Law
  • P14 Capitalist Systems: Property Rights