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Institutional Imperfections and Buyer-Induced Holdout in Land Acquisition

Author

Listed:
  • Sreeparna Saha

    (Central Queensland University)

  • Prabal Roy Chowdhury

    (Indian Statistical Institute, Delhi)

  • Jaideep Roy

    (University of Bath)

  • Grazyna Wiejak-Roy

    (University of the West of England)

Abstract

Imperfect institutions, particularly in developing economies, encourage bureaucratic corruption and outside interference by political parties or civic-society organisations, thereby distorting property rights for land. We characterise conditions when an industrial buyer’s optimal design to acquire land strategically involves holdout as a response to these imperfections. We propose testable hypotheses suggesting that such form of holdout increases (i) with a reduction in corruption if the current imperfections are significant, (ii) with an increase in ease of political opposition, and (iii) during elections. We also study welfare implications and discuss the relevance of the framework and the results for advanced economies.

Suggested Citation

  • Sreeparna Saha & Prabal Roy Chowdhury & Jaideep Roy & Grazyna Wiejak-Roy, 2020. "Institutional Imperfections and Buyer-Induced Holdout in Land Acquisition," Discussion Papers 20-02, Indian Statistical Institute, Delhi.
  • Handle: RePEc:alo:isipdp:20-02
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    File URL: https://www.isid.ac.in/~epu/dispapers/dp20_02.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Land acquisition; institutional imperfections; outside interference; buyer-induced holdout.Sector; Public Sector;
    All these keywords.

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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