Title

Empire Building and Fiscal Illusion? An Empirical Study of Government Official Behaviors in Takings

Document Type

Article

Abstract

The takings literature debates whether government officials minimize takings compensation or paying compensation to the extent that it maximizes their political interests. But there has been no empirical study. Besides, two assessment methods of takings compensation—one implemented by American states, the other proposed by scholars—have been empirically found to award inaccurate takings compensations to condemnees. There is no empirical research, however, on a third assessment method, implemented in Taiwan.

Using data of takings compensation and market value from Taiwan 2000 – 2007, I empirically examined whether the Taiwan assessment method (as takings compensations are pre-determined by annual governmental assessments of property value) produces accurate compensation, and whether government officials minimize compensation or maximize their political interests. I found that about two-thirds of the takings compensations in Taiwan were below market value and, therefore, inaccurate. Government officials can further reduce compensation payment but have failed to do so. Condemnees were under-compensated because the more politically influential landowners pressured the government to distort governmental assessments of property value to reduce tax burden. Political interests are government officials’ main concern.

Date of Authorship for this Version

June 2008