Financing Land Acquisition for Infrastructure Projects

Land acquisition for infrastructure projects that require a large amount of funding can be financed with an equity-like protocol. The auction protocol does not require knowledge of the reservation value of the land acquired, nor does it require determination of the post-development value of the land in the surrounding area. Competition among private players transfers the value of pecuniary externalities, manifested in land price appreciation, to the government, which it can use to partially finance the project.