Property Rights

10 Key excerpts on "Property Rights"

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  eBook - ePub

  Economic Foundations of Strategy

  • Joseph T. Mahoney(Author)
  • 2004(Publication Date)
  • SAGE Publications, Inc

    (Publisher)

  In the 1990s, modern Property Rights theory (which provides more formalized mathematical models) has gained momentum in organizational economics, and Hart’s (1995) work is an exemplar of this modern Property Rights framework. With the increasing importance of intellectual Property Rights in our current information age (both early and modern), Property Rights theory predictably will receive greater attention in strategic management and may prove to spur a growth area for research in the years ahead.

  Contracting for Property Rights (Libecap, 1989)

  How do institutions evolve in response to individual economic incentives, strategies, and choices? Libecap (1989) emphasizes that Property Rights matter.1 Property Rights provide the basic economic incentive system that shapes resource allocation. What has been largely missing is why Property Rights take the form that they do. Libecap argues that Property Rights are formed and enforced by political entities and that Property Rights reflect the conflicting economic interests and bargaining strength of those affected. Moreover, because today’s choices are constrained by yesterday’s decisions, history matters.

  Property Rights are the social institutions that define or delimit the range of privileges granted to individuals of specific resources, such as parcels of land or water. Private ownership of these resources may involve a variety of Property Rights, including the right to exclude nonowners from access, the right to appropriate the stream of economic rents from use of and investments in the resource, and the rights to sell or otherwise transfer the resource to others. Property Rights institutions range from formal arrangements, including constitutional provisions, statutes, and judicial rulings, to informal conventions and customs regarding the allocations and uses of property. Such institutions critically affect decision making regarding resource use and, hence, affect economic behavior and economic performance.

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  The Economic Structure of Intellectual Property Law

  • William M. Landes, Richard A. Posner, William M. LANDES(Authors)
  • 2009(Publication Date)
  • Belknap Press

    (Publisher)

  We shall argue that to reduce the prob-lem of intellectual property to this tradeoff is to oversimplify greatly; to ig-nore entire bodies of intellectual property law, notably trademark law; and, of particular pertinence to this chapter, to obscure the legal and economic con-tinuity between physical and intellectual property. Not that the incentive-ac-cess tradeoff is nonexistent or even unimportant; but there is much else to consider in an economic analysis of intellectual property law. 11 1. See, for example, Richard A. Posner, Economic Analysis of Law, ch. 3 (6th ed. 2003); for a fuller treatment, see Property Rights: Contract, Conflict, and Law (Terry L. Anderson and Fred S. McChesney eds. 2003). A property right is a legally enforceable power to exclude others from us-ing a resource—all others (with exceptions unnecessary to get into here, such as the government when exercising its eminent domain power), and so with no need to make contracts with would-be users of the resource forbidding their use. If A owns a pasture, he can, with the backing of the courts and the police, forbid others to graze their cattle on it. He does not have to negotiate with them an agreement entitling him to exclusive use; that would be an in-feasible alternative because the whole world could threaten to graze their cat-tle on his property in order to be paid by him not to do so. Conversely, if B wants to have the exclusive use of the pasture, he must acquire it on terms ac-ceptable to A. Thus a property right includes both the right to exclude others and the right to transfer the property to another. Benefits Property Rights confer two types of economic benefit, static and dynamic. The former is illustrated by a natural (that is, uncultivated) pasture. If the owner cannot exclude others from using his pasture, there will be overgraz-ing.

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  Researching Property Law

  • Sarah Blandy, Susan Bright(Authors)
  • 2015(Publication Date)
  • Hart Publishing

    (Publisher)

  106 Introduction Property is fundamental in both law and economics. Writing from a legal perspective, the jurist William Blackstone observed that ‘nothing … so generally strikes the imagination, and engages the affection of mankind, as the right of property’. 1 So much in law revolves around property – from contracts that exchange goods (property in things) or services (property in labour) and tort doctrines of nuisance and trespass that protect Property Rights (including common and public Property Rights), to criminal laws pro-hibiting theft and constitutional rules limiting government expropriation – that Tom Bethell exaggerates only slightly when he claims that ‘a society without Property Rights would hardly need lawyers’. 2 From a functional perspective, property law is the mechanism by which entitlements (and liabilities) concerning scarce goods and services are allocated among competing uses and users. 3 The scarcity of goods and services is also what gives property its funda-mental importance in economics. In 1932, Lionel Robbins offered a widely influential definition of economics as ‘the science which studies human behavior as a relationship between ends and scarce means which have alter-native uses’. 4 Those scarce means are allocated according to a legal system of property, and ‘the content of Property Rights affects the … use of resources in specific and predictable ways’. 5 As Armen Alchian later explained: 1 Blackstone W, Commentaries on the Laws of England Vol. 2 (University of Chicago Press, Chicago IL, 1979 [1766]) 2. 2 Bethel T, The Noblest Triumph: Property and Prosperity through the Ages (St Martin’s Griffin, New York, 1998) 23. 3 Cole D H and Grossman P Z, Principles of Law and Economics (2nd edn, Wolters Kluwer, New York, 2011) 31. 4 Robbins L, The Nature and Significance of Economic Science (2nd edn, Macmillan, 1945) 16.

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  Economic Behavior and Legal Institutions

  An Introductory Survey

  • Lars Werin(Author)
  • 2003(Publication Date)
  • WSPC

    (Publisher)

  In a more general sense, of little importance to our purposes here, Property Rights are almost necessarily contingent by their very nature. A property right defines possibilities to act, and these nearly always refer to an ex ante perspective. More or less by definition, they are expected 20 Economic Behavior and Legal Institutions possibilities. But there is usually some amount of uncertainty (apart from the particular uncertainty arising from the contingency dimension generated by rules such as those on negligence). In spite of the fact that a property right may be well defined and protected, events can occur which obliterate it: a house may be burnt out; illness may deprive someone of physical fitness; etc. An implicit assumption behind the Property Rights discussed so far has been that they concern what private individuals can do and command without any significant risk of interference from other individuals acting privately. The state has been involved mainly as being responsible for the legal system. The Property Rights we have discussed are thus rights of individuals versus other individuals. 13 But individuals may also hold legally acknowledged Property Rights versus the state, which is the case if the law explicitly forbids the state to behave or act or legislate in some particular way. To the extent such rights are protected by threats of sanctions directed against the state, they almost by necessity take the form of liability to pay damages as the state itself can hardly be punished. 14 Most of these Property Rights correspond to what is usually called human rights or civil liberties. They may amount to rights to express opinions or religious beliefs, choose a place to live and work in, or belong to associations and societies. The right not to be deprived of Property Rights to land, real estate, etc. by the state, except according to specific, given legal rules, is of a similar kind.

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  21st Century Economics: A Reference Handbook

  • Rhona C. Free(Author)
  • 2010(Publication Date)
  • SAGE Publications, Inc

    (Publisher)

  74 ECONOMICS OF PROPERTY LAW RICHARD D. COE New College of Florida P roperty law is the body of law that establishes the rules governing ownership rights over scarce resources. Ownership rights are multifaceted— often referred to as a bundle of rights—but in general such rights encompass three broad areas of control over a specific resource: the right to exclude (the ability of the owner to prevent others from using the resource), the right to use (the ability of the owner to use the resource in the manner he or she sees fit), and the right to transfer (the ability of the owner to assign ownership rights to the resource to another). The economic analysis of property law is primarily concerned with the effect of various prop-erty rules on the allocation of resources and whether such effects conform to the economic concept of efficiency. 1 Equity issues are also addressed but to a lesser degree. The Economics of the Right to Exclude Ownership rights to a resource grant to the owner the ability to exclude others from using the resource. In contrast, an open-access resource, often labeled common property, is one that an individual has a right to use but cannot exclude oth-ers from using. The ability to exclude is probably the most commonly associated aspect of ownership—that's mine; you can't use it. A derivative power of the excludability right is that the owner can determine which other persons can use the property, either now or in the future, via some form of permission, such as a rental or licensing agreement. The Minimization of Conflict Costs Economists distinguish between goods and resources that are characterized by rival consumption (or use) and goods and resources that are characterized by nonrival consump-tion (or use). Rival consumption exists when consumption by one individual physically precludes consumption by another individual, such as the eating of an apple.

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  Property Rights Dynamics

  A Law and Economics Perspective

  • Donatella Porrini, Giovanni Ramello, Donatella Porrini, Giovanni Ramello(Authors)
  • 2012(Publication Date)
  • Taylor & Francis

    (Publisher)

  The institution of property is nearly as old as recorded history. In spite of its stability as a fundamental institution of human society, the concept of property and the privileges, obligations and restrictions that govern ownership have undergone substantial change throughout history.

  The history of property is illuminated by economic theory. The concept of scarcity – which some notable authorities believe is at least a necessary condition for the establishment of enforceable Property Rights – is valuable in explaining the limited domain of property in early societies and the changing contours of property protection as a result of changes in the economic structure of society.3 As pointed out by Demsetz (1967), Property Rights develop to internalize externalities in the use of scarce resources. However, there are costs associated with the establishment of property. While scarcity may be necessary for giving objects value and prompting the desire to have Property Rights, the establishment of such rights also requires that their protection be economically efficient from a societal standpoint, in the sense that the marginal benefit of protection (internalization) exceeds the marginal cost of protection. Property Rights emerge only when the gains of internalization become larger than the cost of internalization. The study of the historical evolution of property confirms these economic propositions and reveals that changes in the economy often trigger changes in the social and legal conception of property.4

  A large number of anthropologists and legal historians have come to agree on the identification of some general patterns in the evolution of property, as I shall now describe.

  Hunters and shepherds: the rise of functional property

  The age of hunters was perhaps one of the first stages in which humans appeared to assert property claims over physical resources. In a hunter’s society, property consisted mostly of what hunters could kill for their own consumption or trade. At this stage, there was no need to define Property Rights over other resources, such as land or stock of wild animals and consequently little need for institutional protection of Property Rights.

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  Institutions, Property Rights, and Economic Growth

  The Legacy of Douglass North

  • Sebastian Galiani, Itai Sened(Authors)
  • 2014(Publication Date)
  • Cambridge University Press

    (Publisher)

  In developed countries, effective judicial systems include clearly delineated bodies of law and well-identified agents, and people have some degree of confidence that the merits of a case, rather than private payoffs, will be the decisive factor in determining its outcome. In contrast, enforcement in poor countries is uncertain, not only because of ambiguities in legal doctrine, but also because of uncertainty with respect to the behavior of the judicial system. Property Rights are not an all-or-nothing affair. There is a spectrum ranging from no rights at all to a complete set of rights. Indeed, even in the absence of legal or formal rights, individuals still hold economic rights over assets (i.e., informal rights) that are equated with their ability, in terms of expectations, to directly consume the services associated with an asset or to consume it indirectly through exchange (Barzel 1997). Following Schlager and Ostrom (1992), we can characterize Property Rights based on (1) the scope of the group exercising those rights and (2) the degree of control given to the group exercising those rights. In line with this characterization, we can divide Property Rights into private and collective Property Rights, with the latter being further subdivided into government property and open property. Thus, it is important to emphasize that the answer to the question as to whether or not a more completely defined set of Property Rights Land Property Rights 109 (i.e., formal private Property Rights) will be socially beneficial will depend on the magnitude of common pool losses, the nature of the contracting costs involved in resolving such losses, and the economic costs of defining and enforcing Property Rights. 1 Land rights play a particularly important part in the economic develop- ment process. Land is obviously the main production asset for agricultural activity.

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  Persons, Parts and Property

  How Should we Regulate Human Tissue in the 21st Century?

  • Imogen Goold, Kate Greasley, Jonathan Herring, Loane Skene, Imogen Goold, Kate Greasley, Jonathan Herring, Loane Skene(Authors)
  • 2014(Publication Date)
  • Hart Publishing

    (Publisher)

  Intellectual Property Rights, as their name would suggest, are often classed as Property Rights. Rahmatian, for example, has recently argued, ‘intellectual property is property, with all the advan-tages and dangers which originate from that quality. It is arguably even more accurate to say that the legal concept of Property Rights in general is more easily understood when looking at intellectual Property Rights first’. 12 However, because intellectual Property Rights relate to ideational entities 13 rather than physical things, they are not ‘Property Rights’ under the definition adopted in this chapter. Similarly, it is often the case that contractual rights, or ‘choses in action’, being a source of wealth, are labelled ‘Property Rights’. Baroness Hale, in the recent case of OBG Ltd v Allan , 14 took this view when she argued that a contractual right to the payment of a sum of money was a ‘property right’ and, as such, could be stolen in much the same way that a physical asset could be. 15 Again, under the definition of ‘Property Rights’ adopted in this chapter, a contractual right to the payment of a sum of money does not count as a ‘property right’ because it does not relate to any physical thing, but merely correlates with the debtor’s duty to pay. 16 The point being made here is that many rights that are frequently referred to as ‘property’, such as ‘intellectual property’ and ‘contractual debts’, fall outside of the definition of ‘Property Rights’ adopted in this chapter because they do not relate to physical things. It is necessary, therefore, to attempt to justify this definition of Property Rights, and the stipulation that they must relate to a physical thing. It is worth set-ting out this justification in some detail because, as we will see, the justification provides us with a method of asking whether or not human biological material can be made the subject matter of Property Rights.

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  Privatisation and Its Limits in Central and Eastern Europe

  Property Rights in Transition

  • H. Engerer(Author)
  • 2001(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  Part II Property Rights in Philosophy and Economics Property Rights in philosophy and economics The question of ownership had not been discussed in economics for a long time, although property marked the central conflict between economic systems. The question of ownership became a topic again only as a result of the events in Central and Eastern Europe in 1989/90. The collapse of social- ism seemed to confirm that, at long last, private property is superior to state property. In order to change their property system, Central and Eastern European countries were advised to cut back rapidly their dom- inant state sector in favor of the private sector. Since then, the privatiz- ation 1 of state enterprises plays a key role in the conceptions of economic transition. The reasons for privatization are based on the central assump- tion of a higher efficiency of private property compared with state prop- erty, the relief of the government budget (in deficit) through privatization revenues, the possibility of “fairer” distribution, as well as the reduction of political influence on enterprises – to name but a few arguments for privat- ization. These arguments, however, stand upon the unstable ground of economic theory, and this does not apply only to countries undergoing transformation, but even to established market economies. Efficiency thus seems less a question of private versus public ownership of enterprises than a question of corporate governance and market environment. That is why, in the long run, due to privatization (non-recurrent sales revenues versus recurrent payment of taxes) even public revenues are not necessarily higher than in the case of maintaining national property. In addition, privatiza- tion is, at most, suitable as an instrument for influencing primary income distribution.

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  The Origins and Consequences of Property Rights

  Austrian, Public Choice, and Institutional Economics Perspectives

  • Colin Harris, Meina Cai, Ilia Murtazashvili, Jennifer Brick Murtazashvili(Authors)
  • 2020(Publication Date)
  • Cambridge University Press

    (Publisher)

  The literature also suggests that the emergence of successful economic or legal rights typically reflects a similar set of conditions: • Monopolies on coercion in a fixed territory. Control over territory creates incentives for decision makers to respect property institutions and invest in their maintenance, while threats to such monopolies contribute to insecurity of Property Rights. • Governance capacity. Any property regime depends for its success on the capacity of an organization to administer and enforce Property Rights. • Institutions to acquire information. Because governments do not necessar- ily have information about which property institutions are best for the claimants, the presence of institutions that enable political decision makers to acquire information about local conditions and local needs is essential to the creation of effective Property Rights. 37 The Origins and Consequences of Property Rights • Institutional constraints. Constraints on decision makers are necessary to ensure that those with political power respect the Property Rights of individ- uals and communities. • Inclusive institutions for collective action and adjudication. The inclusiv- ity of institutions, or the extent to which they allow individuals and groups access points to political deliberations regarding the definition and enforcing of Property Rights, is especially important to making provision of Property Rights less selective. • Supportive social institutions. Social institutions can either enhance or undermine security of Property Rights. These conditions exclude many examples of spontaneous Property Rights, such as those found in Benson (1989a, 1989b), Demsetz (1967), Anderson and Hill (1975, 2004), Ellickson (1991), Leeson (2007b, 2007d, 2009), Kerekes and Williamson (2012), Harris (2018, 2014), Smith, Skarbek, and Wilson (2012), Friedman (1979, 2005), Murtazashvili and Murtazashvili (2015), and Scott (2009).

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