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Theoretical and Applied Economics
No. 4 / 2008 (521)

Compulsory Purchase in the Transitional Countries of Central and Eastern Europe

Richard Grover
School of Built Environment, Oxford Brookes University
Ion Anghel
Academia de Studii Economice, Bucuresti
Béla Berdar
Universitatea de Vest, Ungaria
Mikhail Soloviev
Higher School of Economics, Moscow
Aleksei Zavyalov
School of Privatization and Entrepreneurship, Moscow

Abstract. Until the ending of Communist rule in Central and Eastern Europe, the objective of compulsory purchase was the achievement of a socialist society in which the ownership of the means of production, including land, was to be collective rather than private. Compulsory purchase legislation and laws on ownership were used to expropriate private property. After 1990 the newly elected democratic governments changed the constitutions to permit and protect private ownership of land. However, compulsory purchase is essential in a market economy to deal with certain aspects of market failure. These include the need to facilitate the provision of collective goods, such as infrastructure and utility networks, and regeneration where the state may need to disrupt a prisoners’ dilemma situation. In spite of their commitment to the inviolability of private property, the transitional economies have had to develop compulsory purchase procedures and means of assessing compensation.

Keywords: compulsory purchase; transitional economies; Bulgaria; Hungary; Romania; Russian Federation; United Kingdom.

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