What is Public Use? Eminent Domain and the Kelo Decision

Abstract

This paper discusses the concept of public use following the Supreme Court decision in the eminent domain case of Kelo v. City of New London. The majority of the Court now equates public use to public purpose and approves of the Connecticut local economic development statute. The Kelo decision has generated considerable controversy. It is suggested that one approach to the resolution of the issue is the application of the economist’s dual tests for the efficacy of public intervention in the private economy—existence of market failure and benefits that exceed costs.