In the Property Right Alliance’s newly-updated International Property Rights Index (IPRI), the United States ranked 15th out of the 128 countries studied. Yet many would presume the United States to be much higher on the list. It seems somewhat intuitive that the United States would be ranked above countries such as New Zealand, Japan and Australia, and possibly above the United Kingdom and Hong Kong, but the study shows this is not the case.
While strong in intellectual property protections, the United States has more work to do in terms of protecting physical property rights and fostering legal and political environments that do not allow for unnecessary seizures. The United States might be tied for first with Japan in its protection of intellectual property rights with a score of 8.63 (out of 10), but the empirical evidence shows that the U.S. protects physical property and its legal and political environments to a lesser extent. Reforming eminent domain abuse and civil asset forfeiture could aid the United States in better protecting citizens’ property rights.
Ending eminent domain abuse could be a substantive reform to the existing legal and political environments in the United States. While eminent domain is a constitutional provision, the government is only allowed to take private property for “public use” if “just compensation” is provided to the owners of the property. Unfortunately, what is considered “public use” has become increasingly vague. In the landmark case Kelo v. City of New London (1995), the Supreme Court determined that benefits from seizing properties could include, but were not limited to, “new jobs and increased tax revenue.” In effect, this grants the government authority to designate any development that could bring in more tax revenue as “in the public benefit.” Worse yet, the land in Kelo was never developed; the neighborhood seized remains empty while Susette Kelo and others from the area are unable to get their property back. Since the ruling, 42 states have enacted reforms of their eminent domain practices. If the United States can make eminent domain reform a federal issue or even attempt a reversal of Kelo, the property rights of citizens would be more adequately protected.
In the arena of improving physical property rights protections, civil asset forfeiture reform has the potential to garner strong bipartisan support. Originally instituted to take away the profits of drug traffickers and other criminals, provisions in all fifty states allow for the government to seize personal assets if such possessions are believed to be involved in a crime. Owners are then expected to prove the innocence of their property, and if this is not done, the Department of Justice’s Equitable Sharing Program allows police to keep and spend 80 percent of the seized assets. Theoretically, these assets (in the form of money, housing, vehicles, etc.) are intended to fund police forces to catch more criminals, but Freedom of Information Act (FOIA) requests have shown that many have gone to militarizing police forces and extraneous spending, such as expensive coffee makers, clowns, and dozens of luxury cars. With civil asset forfeiture reform, the United States can better protect the property of its citizens from unnecessary seizure by government officials and promote economic prosperity.
Statistically, however, the United States is not performing poorly compared to the rest of the world. The ranking of fifteenth places the U.S. in the top 12 percent of all countries for the protection of property rights. While the ranking of the U.S. in comparison to other countries did not change from 2015, the country did increase in each individual category (legal and political environment, physical property rights, and intellectual property rights). This indicates that necessary institutional changes in the United States are minor in comparison to many other countries.
The United States does not have to remain outside of the top 10 percent of countries for the protection of property rights. In order to fare better in such rankings and, most importantly, further protect the property rights of its citizens, the U.S. must focus on reforming civil asset forfeiture and eminent domain practices. If the United States seeks to position itself as improving on existing institutions and becoming a freer nation, it should seek to eliminate the unwarranted seizure of property by local authorities. We may just see a climb in the IPRI as a result.