The process of expropriation
"occurs when a public agency (for example, the provincial government and its agencies, regional districts, municipalities, school boards, post-secondary institutions and utilities) takes private property
for a purpose deemed to be in the public interest
". Unlike eminent domain
, expropriation may also refer to the taking of private property by a private
entity authorized by a government to take property in certain situations.
The term appears as "expropriation of expropriators (ruling classes)" in Marxist theory, and also as the slogan "Loot the looters!" ("грабь награбленное"), which was very popular during the Russian October Revolution. The term is also used to describe nationalization
campaigns by communist
states, such as dekulakization and collectivization in the USSR.
One example of expropriation occurred between the United States and Mexico in 1938 when the Mexican president Lázaro Cárdenas signed an order that expropriated almost all of the foreign oil companies operating in Mexico. This initially turned out to have great negative consequences on the Mexican economy when their oil exports were boycotted by major oil companies, decreasing exports dramatically, but later on the economic benefits of this move became apparent, with the new national oil company PEMEX being an important contributor to the Mexican Miracle, and other countries soon followed with oil nationalisation carried out in much of Latin America
and the developing world.
Due to political risks that are involved when countries engage in international business it is important to understand the expropriation risks and laws within each of the countries that business is conducted in order to understand your risks as an investor in that country.