The Institute for Justice (the libertarian public interest law firm that represented the property owners in Kelo v. City of New London) has an interesting study assessing the economic impact of post-Kelo reform laws that ban Kelo-style economic development takings.
Contrary to the "doomsday" predictions of planners and local government officials who claimed that eliminating economic development takings would drastically stifle development, the study finds that states with strong post-Kelo reform laws have not suffered any reduction in growth and development relative to preexisting trends or in comparison with states that passed ineffective reforms or none at all.
I tend to agree with the study's conclusion that takings for economic development aren't actually necessary to increase employment or promote local economic growth. For reasons I outlined in this article, economic development takings are likely to do more harm than good for local economies.
At the same time, I think that the IJ study is not yet a definitive assessment of the economic impact of post-Kelo reform laws. All but one of the laws considered in the study have been in force for less than two and one half years (Utah, which enacted its reform law a few months before Kelo came down on June 23, 2005, is the exception). It is probably too early to fully assess their longterm impact. In addition, while the study controls for preexisting economic trends, it doesn't take account of intervening events other than post-Kelo reform laws that might affect economic development in different regions of the country.
The IJ study is a compelling refutation of the more extreme doom and gloom predictions of Kelo defenders. In my view, time will show that banning economic development takings is a boon for local economies, not a detriment. A few state Supreme Courts, such as Washington's (1959) and Kentucky's (1979), banned economic development takings under state constitutions many years before Kelo; there is no evidence that their actions undermined their states' economies in any way. Development economists have long argued that protecting property rights is a good way to promote growth. If landowners' rights are protected, they are more likely to invest in their properties and establish enterprises that stimulate local economies.
However, it will probably take several years for us to accumulate more definitive data on the impact of post-Kelo reform laws. In the meantime, the IJ study, combined with other available evidence, has shifted the burden of proof to those who argue that economic development takings are an essential tool for promoting local economic growth. It is up to them to show that forcibly displacing homeowners and businesses for the benefit of other private interests really is a good way to promote economic growth.
CONFLICT OF INTEREST WATCH: As longtime VC readers know, I have done considerable pro bono work for IJ, including writing several amicus briefs on their behalf.
All Related Posts (on one page) | Some Related Posts:
- Property Rights Three Years after Kelo, Part IV - What the Feds Have Done:
- Property Rights Three Years After Kelo, Part III - A New Cross-Ideological Coalition for Property Rights?
- Property Rights Three Years After Kelo, Part II - The State of the States:...
- Goldstein v. Pataki and the Shortcomings of Kelo:
- Assessing the Economic Impact of Banning Economic Development Takings:
- Political Ignorance and Post-Kelo Eminent Domain Reform:
- "Victims" of Subprime Mortgages and Victims of Eminent Domain:
- The State of Post-Kelo Eminent Domain Reform:
(see e.g. http://volokh.com/posts/1196716470.shtml)
if thats true..no wonder post kelo reform states haven't suffered any economic loss from a post kelo reform.
Did the IJ study show that banning economic development takings is a "boon" for local economies? So far, all the study seems to assert is that such bans are not a huge detriment.
And don't you think you lose a lot of credibility when you not only get way ahead of the evidence, but use excessively strong language like "boon" to describe the benefits of your preferred ideological approach, when their apparently is not empirical evidence to support that point?
If banning economic development takings was such a "boon" to development, why doesn't the IJ study show that? Are the economies of states that have banned economic development takings booming, relative to how they were doing before? (It should be noted that Utah has an unusually low unemployment rate. But that has been the case for a long time, certainly before they banned economic development takings.)
Yeah, and an AEI study claiming that global warming does not exist surely would shift the burden of proof against those who want to take actions to stop it. =)
Give me a break. Hack "studies" from ideologically motivated organizations don't even count, much less do they shift any burden of proof. If you want to shift the burden of proof, you better come up with a study produced by an organization with some credibility.
Finally, I should note that burden shifting is an argument technique favored much more by lawyers than one favored by disinterested scientists. That you are so quick to want to engage in burden-shifting is an indication that your views should be discounted, because you clearly are letting your ideological desire to reach a certain result cloud your objectivity.
(see e.g. http://volokh.com/posts/1196716470.shtml)
What I said was that MANY of these laws are toothless, not that all of them are. The ones that IJ lists as effective in this study are nearly all ones that I categorized similarly in my paper on post-Kelo reform (linked in the post you cite).
I never said that the IJ study proves that they are a "boon." I said that I think they are a boon on the basis of the arguments I put forward in my own work on the subject. It is, however, too early for the IJ study (or any study of post-Kelo reform) to definitively prove that.
Give me a break. Hack "studies" from ideologically motivated organizations don't even count, much less do they shift any burden of proof. If you want to shift the burden of proof, you better come up with a study produced by an organization with some credibility.
Dismissing studies based on the ideologies of those who produce them is a fallacious ad hominem argument. Evidence is evidence, regardless of who produced it.
Finally, I should note that burden shifting is an argument technique favored much more by lawyers than one favored by disinterested scientists. That you are so quick to want to engage in burden-shifting is an indication that your views should be discounted, because you clearly are letting your ideological desire to reach a certain result cloud your objectivity.
As evidence accumulates on one side of a debate, it is perfectly justified to shift the burden of proof to the other. In addition to the IJ study, my own work, that of several other scholars, and studies by development economists all suggest that protecting property rights is better for economic development undercutting them. There is little if any comparable evidence on the other side. Ordinary scientific principles of Bayesian updating justify a burden shift.
Dick M. Carpenter II, Director of Strategic Research at the Institute for Justice:
In what field does Carpenter hold a Ph.D.? Is that unimportant when assessing his qualifications to perform economic analysis?
I would bet he holds a Ph.D. in education. *wank wank wank* He apparently worked as an elementary school principle, which usually requires either an Ed.D. or a Ph.D. in education.
The other author is some lowly research assistant who has a bachelors degree.
Give a break. It is truly pathetic that you even cited this study. It shows the ideological depths to which you will stoop. Pathetic!
I would consider reading the study. If the authors were qualified.
If it is an economic boon, governments should favor them. If not, then not. Just because the takings are boondoggles doesn't mean they should be banned, just that they should not be approved.
And why are they approved? Free speech, that's why. The developers use their free speech rights to line the pockets of politicians who, in turn, approve bad projects.
I'd rather just stop the corruption in a straight-forward way than go the Kelo way. But, if this is going to stop corruption, I guess I would be for it, even though it would also stop the economically good Kelo-type transactions as well.
I would bet he holds a Ph.D. in education. *wank wank wank* He apparently worked as an elementary school principle, which usually requires either an Ed.D. or a Ph.D. in education.
The other author is some lowly research assistant who has a bachelors degree.
Actually, Carpenter has written many academic articles on various public policy issues. Ross, the other author, is a research associate at IJ, which means he is an analyst in his own right, not an "assistant."
In any event, it's an ad hominem fallacy to dismiss a study based on the author's academic credentials or lack thereof.
If credentials are the issue, I'm willing to bet that my credentials for assessing such studies are a lot better than the Mr. Liberal's, since I've actually published statistical research of my own and am an expert in the field of eminent domain. That said, debates over credentialism are almost never productive. It's much better to stick to substance.
Would you care to share your thoughts on the articles published in Annalen der Physik by a Swiss patent clerk who, while close, had not yet earned an advanced degree? IIR, his certification was for teaching high school mathematics. I'm sure his writings must be worthless, since the author obviously wasn't qualified. For that matter, why would anyone consult a Harvard drop-out on the economics of the computer business?
Care to share what your background is? We obviously can't have the uneducated commenting on legal or technical articles.
Not to mention the emotional damage--emotional damage of various other sorts seems to be getting to court--of being shoved around by government.
IMO, this kind of taking wouldn't get very far if all the public officials involved in approving such takings were subject to a forensic audit every year for life.
I will never tire of asking this question: how many currently existing organizations have enough credibility for both the right and the left (not even mentioning us libertarians who are a wing into itself) to produce a study with some political import that would not be dismissed in this manner by at least one of the sides? Is the number greater than 0?
In a world with time as an unlimited resource, this might make sense. But since I do not have time to read even all the studies by people who possess proper credentials, I certainly am not going to waste time reading studies by people who lack basic credentials.
Obviously, not reading a study does not prove it is false. I never said, this study was false. What I am saying is that it is probabilistically unreliable, and only an ideologue deeply committed to its conclusions would bother to even cite it.
Serious people do not spend their time contemplating the controversial studies of riffraff not qualified to engage in the endeavor. Using heuristics to determine seriousness a priori is the only rational course of action
If Mr. Somin disagrees, I am sure I can find all sorts of wacko studies by extreme leftists who lack proper skills, training, and credentials for him to read. I am sure he will die of old age before he finishes reading them all.
Last time I checked, Einstein got a doctorate in physics while he was a patent clerk. Not only that, his first publication in Annalen der Physik was in 1901, two years before he became a patent clerk. So, get your facts straight.
Oh, and by the way, when he published this article, he had already finished an intense course of study in physics. Without that educational background, he would not have been qualified to write that article.
But I will tell you what. I will read Carpenter's article just as soon as he gets it published in a prestigious economics journal.
A more subtle argument in favour of Mr. Liberal's filtering approach: In science, there is such a thing as peer reviewed journals. If an article survives the review process, this "guarantees" a certain minimum level of quality and reliability. Anyone can post anything on the internet, and it is difficult for me, or any other non-expert, to judge the accuracy of the data cited.
In my own area of expertise, I read non-peer reviewed SSRN articles all the time, since I can usually make a reasonable judgement of their value. But a study such as this one cannot be taken at face value unless the results have been verified by others.
@PersonFromPorlock: Yes, because a) one would probably find that, from an economic point of view, the question is de minimis, and b) it is generally important to be careful not to confuse economic and political arguments. Just like what is politically desireable cannot be made economically viable, economic cost/benifit calculations cannot be the end of political discourse. To wit: our government does not exist to enact mr. Spencer's ideas of society. (Quoting freely, and off the top of my head.)
I admit: I am much too anal to not check exactly what Holmes, J. said in Lochner. To be precise, he said: "The 14th Amendment does not enact Mr. Herbert Spencer's Social Statics." Source
Einstein's began his employment with the patent office on June 23, 1902. Although his publications in Annalen der Physik began in 1901, the Annus Mirabilis was 1905. It was only during that year that he received his doctorate. He continued as a patent clerk until 1909. While he certainly had undertaken a significant study of physics, his only certification prior to 1905 was as a high-school level teacher in physics and mathematics. Id.
You also failed to address that loser Harvard drop-out, Bill Gates.
As to your argument re: wasting time, Prof. Somin, a well-known scholar in the field, suggested that an article was worth reviewing. Sounds like a pretty good filter to me. It's certainly a much better endorsement than publication in the Harvard Law Review. Nor is peer review particularly effective; between 1990 and 2002, JAMA devoted four issues to the problem of garbage statistics in high quality medical journals. More recent studies confirm that the problem still exists, with 40-70% of statistical articles containing errors or omissions. See, e.g., Strasak et al., 61 Am. Stat. 47 (2007) (reviewing NEJM and Nature Medicine). Need I say more than "Hwang Woo Suk"?
/End Hijack
I don't get it--what is "this"? If you're referring to the topic of the post (the economic impact of post-Kelo reform laws), it's inherently an economic issue.
@titus32: Obviously "this" referred to Kelo generally, and to post-Kelo reforms in particular.
@AnonLawStudent: So, since peer review is less than perfect, your recommendation is instead to go with the recommendation of a scholar with a clear ideological bias? Hmmm...
Obviously. Since the topic of the post isn't "Kelo generally," I don't see how the "fundamental error" comment is relevant.
And your initial misquotation of Holmes is revealing. Holmes was saying that, at least in some instances, social science should not govern our interpretation of the Constitution. He was not saying that social science (or economics) should not be applied to decisions in "government" or "politics". Indeed, that would be inane--and Holmes was a pretty smart guy.
You think peer review doesn't involve "ideological bias"? Let's see... traditionally, the editor has carte blanche to select reviewers, thus effectively pre-determining the outcome. THEN he can still accept an article over reviewer objections. For legal purposes, Judge Coffee's concurring damnation of Judge Wood in A Woman’s Choice-East Side Women’s Clinic v. Newman, 305 F.3d 684, 694 (7th Cir. 2002), offers a pretty good discussion. I haven't even mentioned the whole issue of publication bias, i.e. the tendency to publish only positive findings. Nor have I noted problems beyond those that apply to the hard sciences. In softer fields like non-quantitative economics or law...
Again, a noted scholar in the field has suggested reviewing an article. He has preferences and bias, which sophisticated readers take into account. Would you not read an article on economic deregulation suggested by Alan Greenspan? Or an article on gun control suggested by Walter Dellinger? Even if it's just a note by an "unqualified" student?
@Titus32: The initial comment was somewhat off topic, but not so much as to be unacceptable. Since it connected to one of my pet peeves, I paraphrased Holmes, though hardly in order to imply that economics is irrelevant for, as you say, decisions in "government" or "politics". First of all, you're right in saying that would be a ridiculous position. Second of all, Holmes was talking about the interpretation of the constitution, as are we in this thread. Thirdly, to reiterate, my problem is with the tendency of some to argue the enactment of their version of economic science, while forgetting that economic science concerns "merely" the rational response to scarcity, i.e. efficiency of some form.
@AnonLawStudent: I pulled the case you mention off Westlaw. I'll take a look when I have time. In the mean time, allow me to offer an economic argument why I still prefer a peer reviewed journal over just about any non-reviewed publication. The market for such journals depends critically on reputation. A prestigious journal gets more and better articles submitted, and it gets more customers. In fact, that is why there is always discussion about how to objectively measure the reputation of various journals. (Impact factors, etc.) Sloppy review hurts the reputation of the journal. Getting caught having published rubbish hurts the reputation of the journal. It follows that the kind of unscientific practices that you mention are more likely to be found in journals that have less of a reputation to lose.
Also, let me note that it was not originally my POV, but that I can sympathise with Mr. Liberal's remark because I have the impression that for some of the Conspirators, Kelo is a bit of a red flag to a bull issue. For just about every opponent of that ruling, economics has very little to do with it. (And, as I said above, rightly so.) If some "evidence" comes along, all the better, but it is hardly going to be judged with the kind of scientific objectivity that we're used to for most other issues on this blog. [/impressions]
Finally, a notification to readers interested in this kind of thing (i.e. Kelo): Today the Court of Appeals for the 2nd Circuit ruled in Goldstein v Pataki unanimously upholding the granting, by the District Court, of the defendant's motion to dismiss. (Or, in normal english: the use by New York authorities of their eminent domain power to allow, amongst others, for the construction of a new stadium for the Nets does not violate the 5th amendment.)
I suppose "we in this thread" can discuss anything they want. My point, again, is that the subject of this post is manifestly not about the interpretation of the Constitution. For this reason, the "fundamental error" comment was off base.
I didn't back away from anything. Einstein was qualified to publish his article. In contrast, Carpenter, who is too embarrassed to even say what his Ph.D. in, is clearly not qualified to be engaging in economic analysis.
Mr. Somin is an ideologue.
Kelo is a constitutional case, this post deals with some of the economic (and legal) consequences of that ruling. So how are we not discussing the interpretation of the constitution?
By your standards, how was Einstein "qualified to publish his article[s]?" He was only accredited as a high school teacher. Oh, even though he had no degree in the subject, he had undertaken a significant study of the subject, you say? How do you distinguish Einstein from Mr. Carpenter? Perhaps Mr. Carpenter has undertaken a significant study of post-Kelo reforms. I'm curious as to how you make this distinction. Is it merely hindsight bias? Or just your own ideological bias?
He submitted his article for publication, and they were in fact published. That is enough for me.
I should also note that he did finish an intense degree in physics one year prior to submitting his first article.
If Carpenter submits his article to a prestigious economics journal, and they accept it, I would revise my view that he is not qualified to undertake the work he had undertaken. But, absent that sort of evidence, I do not have much faith in an individual with a Ph.D. in education undertaking work that is more appropriately done by someone with a Ph.D. in economics.
To me, lack of appropriate credentials create only a strong presumption that what you have written is not worth reading, not absolute certainty.
This post is about the economic consequences of post-Kelo reform laws, not the Court's interpretation of the Constitution in Kelo. In other words, this post isn't a critique of the Kelo decision. It is not a "fundamental error" to assess the economic impact of Kelo by assessing the economic impact of Kelo. It would be a different argument (one not implicated by this post) to say that the Supreme Court in Kelo should or should not have taken into account economic impact in interpreting the Constitution.
@Titus32: I'm afraid I disagree. The unspoken additional assumption is that all of this is relevant because it affects the verdict on Kelo. If not that, than why are we discussing this? As an economics issue per se, it is interesting for researchers such as Sacha Volokh and myself who do research into property rights theory and contract theory in the tradition of Ronald Coase and Oliver Hart, but that hardly seems to be the point of this post.
@AnonLawStudent: I took a look at the Indiana abortion case you mentioned. (Another red-button issue, at least for Americans! All I'm thinking is: "How is it possible that in the entire state of Indiana there are only 19 places where a woman can get an abortion? What's wrong with any normal hospital?")
The case itself seems more problematic than I imagined. Given the similarity between the statute in question and the one discussed in Casey, I'd say Casey should be controlling. One wonders why it took three different opinions to get to a 2/1 decision to that effect.
As for the statement by Coffey, J. you referred to, his point seems to be that peer review alone is insufficient to guarantee quality. To support his suspicions he refers to the fact that one of the authors is affiliated with Planned Parenthood, not to mention the known position of the editor of the journal. This seems to be entirely in line with some of the questions Mr. Liberal and I have raised about the reliability of a study conducted by employees of the Institute for Justice. I hardly see how Justice Coffee's opinion supports the position that a priori suspicions about non-peer reviewed studies based on the author's ideological affiliation(s) are unjustified. On the contrary.
The "unspoken additional assumption"--I like that. Seriously though, post-Kelo reform laws are not about the constitutionality of Kelo. Nor is anyone saying these laws themselves are unconstitutional. Why are we discussing this? Well, why discuss the impact of any legislation? I suppose because if the legislation has a harmful impact, we don't want it.
You're right.
However, stepping back for a moment, the original point was Mr. Liberal's "fundamental error". Even when we're talking about the desireability of legislation that seeks to "undo" Kelo, his point that this is not primarily an economic issue still stands. (I very much don't want to get into the whole "public use" discussion that is going on in the newer thread at the moment, but I would like to note that this kind of "undoing" legislation seems a good idea to me. However, this is not because of any economic argument, but because the government should, as much as possible, keep its hands off my stuff.)
I certainly agree with your take on Coffee's concurrence re: biased publications, but it reaches back around to my argument. He is saying that reader's can't entirely trust even the most prestigious scientific journals to avoid bias. So he explicitly applies Joiner (and implicitly applies Kumho) to analyze the methodology of the study, and its application to the facts of the case before him. Point being, he looked at the underlying science - and how it was applied - rather than accepting it or rejecting it out of hand based on the author.