Functionings of Land

Analysing Compulsory Acquisition Cases from Scotland

Jyoti Rao

• Publisher: Palgrave Pivot
• Year: 2018
• Print ISBN: 9789811314407
• eBook ISBN: 9789811314414
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

This book focuses on the 'functionings' and capabilities generated from land by their owners and the challenge in satisfactorily recreating these through the compensation paid in the case of compulsory acquisition of private land. These discussions initiate a new debate on the insufficiency of existing approaches to compensation that are ignorant of the losses of 'capabilities' and 'functionings'. The relationship between land, ownership and well-being of an individual is explained through the identification of various 'functionings' associated with the ownership of land in the context of Scotland.

Contemporary approaches to compensation, founded on the utilitarian argument, have led to dissatisfactory outcomes for the affected landowners. Discussions in this book shift the focus to equalizing the share of burdens and benefits for each individual member of the society, through equalization of human capabilities.

This book will be of value to development economists, researchers, policy makers and law makers concerned with compulsory acquisition of land.

© The Author(s) 2018

Jyoti RaoFunctionings of Landhttps://doi.org/10.1007/978-981-13-1441-4_1

Begin Abstract

1. Introduction

Jyoti Rao¹

(1)

University of Melbourne, Melbourne, VIC, Australia

Jyoti Rao

Abstract

The introductory chapter initiates the discussion on Sen’s capability theory and its application in the re-examination of value of land to its owner in the context of “functionings.” The chapter states the scope of the book, which is limited to understanding the functionings of land that have been identified as being valuable to landowners in Scotland and are often uncompensated in the process of compulsory acquisition. This is performed through qualitative content analysis (QCA) of 19 relevant case reports from the Lands Tribunal for Scotland. A short description on the method of QCA is presented in this chapter.

Keywords

CapabilityFunctioningsProperty rightsCompulsory purchaseCompensationMarket valueCompulsory acquisition

End Abstract

Functionings and capabilities generated from land, by their owners and the challenge in satisfactorily recreating these through the compensation paid in the case of compulsory acquisition of private land, are the focus of this book. These discussions initiate a new debate on the insufficiency of existing approaches to compensation that are ignorant of the losses of “capabilities” and “functionings.” The relationship between land, ownership and well-being of an individual is explained through the identification of various “functionings” associated with the ownership of land in the context of Scotland.

Re-examination of theories of justice and the approaches to equality by economist-philosopher Amartya Sen reveals the insufficiency of earlier theories in addressing inequalities in the society. While the focus of most theories of distributive justice is concentrated in “just” allocation of scarce resources, Sen (1979) argues that this approach does not eradicate the inequality of human “capabilities” which results in unequal utility. Sen strongly argues for equalization of capability and functionings as a holistic approach to equality. Sen’s capability argument provides strong theoretical reasoning for considering individualistically valuable functionings (or usefulness) generated from land by the landowners, who are unequal in their capabilities.

Land permits generation of multiple functions which include those necessary for a good life (howsoever it may be defined). In the context of free market operation where a willing seller exchanges land with a willing buyer, the market value¹ of land shall satisfactorily replace or reconstruct all valuable functionings of the original landowner, who will otherwise not sell the land. However, in the process of compulsory acquisition of private land (for public purposes), particularly in cases when the affected landowner is unwilling to sell, the subjective value attached to the functionings from land may be higher than its market value, and it is not always possible to reconstruct these functionings from its (monetary) market value. While market value of land is an essential component of losses borne by the landowner, it does not fully encapsulate all valuable functionings which are attached to land. There is need to re-examine losses of affected landowners through the application of Sen’s capability theory, and pave way for “fairer” compensation mechanism for the compulsory acquisition of land.

The scope of this book is limited to understanding the functionings of land that have been identified as being valuable to landowners in Scotland and are often uncompensated in the process of compulsory acquisition. This is performed through qualitative content analysis (QCA) of 19 relevant case reports from the Lands Tribunal for Scotland. As the Lands Tribunal for Scotland is the final arbiter on compulsory purchase compensation claims, decisions from this body are considered the best available evidence of interpretation of the existing legislation. It is acknowledged that there are weaknesses in using Lands Tribunal cases as evidence. For example, the high cost of legal fees may act as a barrier to landowners taking forward claims where they have limited wealth and cannot afford to do so, and it may simply not be economic to pursue small value cases where transaction costs exceed the potential gain. Thus, evidence from the Lands Tribunal cases is potentially biased towards higher value cases or more wealthy claimants, and against more speculative claims, smaller value cases and financially weaker claimants or to simply those who are risk averse. That said, there is also a practical reason for adopting Lands Tribunal evidence in that it is very difficult to obtain detailed information on cases that have not gone to the Tribunal, as these remain confidential to the parties involved, whereas the Tribunal judgements are now available online with cases dating back to 1997. There is scope for further development of the list of functionings through primary inquiry of functionings with the affected landowners.

As mentioned earlier, QCA is used as a scientific tool for this research. It is important that QCA is performed in a systematic manner that produces replicable findings. This research used the procedure advocated by Mayring (2000) for inductive category development. The flowchart of steps performed in the QCA is presented in Fig. 1.1.

Fig. 1.1

Step-by-step method of qualitative content analysis used in this research. (Source: Rao (2017), p. 313)

The first step was to formulate the criteria of selection of the object/unit of analysis. As at August 2016, there were 38² case reports on disputed compensation available online on the website of the Lands Tribunal for Scotland. An in-depth reading of all 38 cases was performed, and the content was analysed briefly at this first stage of screening. The criterion of selection was the availability of information (or content) on the functionings of land, and on this basis 19 cases were selected and the remaining 19 were rejected. Among the selected 19 cases, the most recent case was decided in 2016, while the earliest case was in 1997, thus offering evidence over the two most recent decades. Although it is important to read and understand each section of the report, the emphasis was on analysing the “background,” the “applicant’s submission” and the discussion by the Tribunal. The content was analysed in detail using NVIVO software, and functionings were deduced through an iterative process of reading the content and creation of functionings (as codes). Finally, a list of 15 functionings was created, and these were classified under four broad headings, as follows (detailed discussion on each of the above functionings shall follow in Chap. 4):

1. A.
   Financial functionings of the landowner

   1. 1.
      Financial gains from expected and planned development in the near future
   2. 2.
      Future benefits linked with unseen development potential of the land parcel
   3. 3.
      Benefits from expected improvements in the market condition in the near future
   4. 4.
      Market value of the property and consequential reduction due to public works
   5. 5.
      Income (existing and expected) from land and its produce
   6. 6.
      Agricultural efficiency that results from ownership of large land holdings
2. B.
   Personal comfort offered to the landowner, both physical and psychological

   1. 7.
      Personal comfort from the physical environment in and around the property
   2. 8.
      Certainty of stable business operations at a given location
   3. 9.
      Experience and expertise in specific type of economic activity
3. C.
   Rights of the landowner

   1. 10.
      Market power to negotiate in the open market
   2. 11.
      Opportunity to make strategic investment in the land market, with the hope of receiving financial gains in the future
   3. 12.
      Opportunity to choose a convenient time for sale, depending upon an individual’s (physical) availability to be able to satisfactorily manage the (forced) sale and related issues
   4. 13.
      Choice of use to which land (portion) can be put
4. D.
   Securities ...

Table of contents

• Cover
• Front Matter
• 1. Introduction
• 2. Theoretical Framework
• 3. Case Studies from Scotland
• 4. Conclusion