The scholarly literature on takings compensation emphasizes incentives for condemnors and condemnees. The widely accepted prediction that full compensation leads to overinvestment by condemnees, however, is not based on the correct understanding of the takings law in the United States. Condemnors are often assumed to be social wealth maximizers or to suffer from fiscal illusion, both theories lacking empirical support. In addition, costs and accuracy of assessing property value for takings compensation...
