Land Grab : Takings, the Market Process, and Regime Uncertainty

Property rights are a key aspect of the rules governing economic interactions, providing individuals with dependable information and incentives. Well-defined and stable property rights encourage the effective use of existing scarce resources and also provide the incentive to innovate. In this context, we explore the impact of government takings on entrepreneurship and the market process. By changing the rules of the game, takings distorts the market process by shifting the opportunities and incentives facing entrepreneurs. The use of takings also introduces quot;regime uncertaintyquot; whereby the predictability of the rules of the game is weakened. These costs of takings are typically overlooked because they involve unrealized entrepreneurial opportunities that cannot be captured in standard cost-benefit calculations