![]() ![]() A broader conceptual framework for the economics of compensation employing the role of freedom is constructed to provide a comprehensive understanding on the role of freedom and rights in compensation valuation for future development projects. ![]() Thus, there is a need to consider the elements in Amartya Sen's conception of freedom, capability and liberty as well as Rawlsian theory of justice in modern compensation theories in order to capture the real changes in the welfare. This paper argues that the Kaldor-Hicks compensation criteria are limited to explain the changes in the welfare of the displaced communities after resettlement. In particular, it reviews the classical compensation theory by Kaldor-Hicks and also the modern theories of compensation. ![]() This paper reviews the issue of compensation and the approach for making compensation. As a consequence, the displaced communities often find their welfare to be worse off after resettlement and hence, the compensations do not provide justice to them. The compensation for communities who are relocated to make way for development projects is often underestimated. ![]()
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