Even scholars with a skeptical attitude towards eminent domain have generally accepted the idea that it is often needed to build roads; I have in fact endorsed this conventional wisdom myself (e.g. - in this article). An important recent paper by Florida State University economist Bruce Benson challenges the orthodox view. Benson shows that the supposed need for eminent domain is tied into the assumption that roads must be government-owned. In order to prevent roadbuilding projects from being blocked by "holdouts" (property owners who seek to hold the project hostage by demanding a massively disproportionate share of the proceeds in exchange for selling their rights), the government often resorts to eminent domain. As Benson shows, however, private road builders could more effectively use "secret assembly" techniques to get around this problem. By buying the property needed to build the road in "secret" (without telling sellers what it will be used for) builders can prevent potential holdouts from ever figuring out that there is a large assembly project to hold up in the first place. Obviously, the government usually cannot and should not operate in such secrecy when building roads with public funds. Benson also shows that there are other voluntary assembly techniques that private entrepreneurs could use more effectively than government.
The very idea of privately owned roads may seem radical and outlandish to some of our readers. So it is worth mentioning, as Benson describe in his article, that privately owned roads have a long history in both the United States and Europe, and that there are many privately owned roads in the US today, particularly in rural areas and in private planned communities. This part of Benson's article, by the way, is not especially original or controversial. Private ownership of roads is no more radical than private ownership of utilities, railroad lines, power lines, or other similar infrastructure.
Has Benson successfully demonstrated that the use of eminent domain for roadbuilding is completely unnecessary? I think not. Even with private ownership, secret assembly is more difficult to use in the case of roads than in the case of other building projects. To build a road, one has to buy up property in a continuous line from Point A to Point B. This makes it far more difficult to hide the builder's true intentions. What Benson has proven, in my view, is that roads can be built without the need for eminent domain in at least a substantial number of cases. Moreover, as he shows in the second half of the article, the use of condemnation to build roads (even those where it really is necessary) often imposes costs on property owners and society as a whole that may outweigh the benefits of the new road. The ongoing saga of Boston's "Big Dig" is an excellent reminder of the dangers inherent in government-controlled road construction. All of this justifies viewing roadbuilding condemnations with far greater skepticism than before, even if it is premature to conclude that such takings should be abolished completely.
And if the argument for using eminent domain is problematic even in the "easy" case of roads, it should be viewed with even greater skepticism in more difficult cases such as "blight" and "economic development" condemnations.