Why don’t countries buy territory like they used to?

Duke Law Professor Joseph Blocher poses an interesting question:

Once upon a time, sovereigns bought and sold themselves to one another. Specifically, they purchased sovereign territory. The United States, to take the easiest example, looks the way it does not just because of military conquest, but because of bold real estate deals, including most notably the Adams-Onis Treaty, the Louisiana Purchase, and the Alaska Purchase. Occasionally such sales were tied up with military action, as with the Treaty of Guadalupe Hidalgo, which ended the Mexican-American War, transferred the Mexican Cession, and committed the United States to pay Mexico $15 million “[i]n consideration of the extension acquired.”[…]

Somewhere along the way, the market for sovereign territory seems to have dried up, at least as far as I can tell. To be sure, there is still an active market for proprietary interests in public land; the federal government, after all, owns approximately 30% of the nation’s land. But borders–sovereign territory, rather than property–do not seem to be for sale, especially domestically. Why?

The closest thing that happens like this today are deals like China’s state-run Heilongjiang Beidahuang Nongken Group’s purchase of 800,000 acres of Argentina to grow crops for export to China. Or South Korea’s Daewoo Logistics’ lease of 3.2 million acres of farmland in Madagascar, half the island’s arable land. Neither were quite the Louisiana Purchase and no borders have technically been redrawn, but these megadeals raised controversial questions about national sovereignty in the host countries. (Madagascar’s new leaders backed out of the Daewoo deal in 2009.)

There are also some signs that the concept of sovereign land purchases may be making a comeback. As Blocher notes, some commentators have half-seriously suggested Greece sell off some its islands to settle its debts. Paul Romer’s charter cities concept involves a Hong Kong-esque lease of territory for commercial development purchases — creating a little piece of Canada in Honduras for example. Low-lying island nations like Maldives and Kiribati have openly discussed the possibility of buying land in other countries as their territory is threatened by sea-level rise.

It is also tempting to wonder whether there are any economic solutions to current territorial disputes. Is there a scenario in which China could simply pay the Philippines to give up the Spratlys? What would be a fair price?

Hat tip: Andrew Sullivan