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Suppose the City of Buenos Airesplans to build a highway to allow us to travel faster within this congested metropolis. For this to be possible, the government must expropriate and knock down a number of houses. As we all know, eminent domain means that, in pursuit of a public purpose, government can take people’s property against their will. To use the terminology coined by Calabresi y Melamed,[1] in the face of eminent domain, the right to property of the owners of these houses is not protected by a property rule but by a liability rule: government has the power to buy this right compulsively in exchange for compensation.

[1] See “Property Rules, Liability Rules and Inalienability. A View of the Cathedral,” 85 Harv. L. Rev. 1089-1128 (1972).


Paper delivered at SELA 2008, Property Rights, in Buenos Aires, Argentina, as part of the panel on “The Body as Property.”