Advanced Search
MyIDEAS: Login

Ownership risk and the use of common-pool natural resources

Contents:

Author Info

  • Laurent-Lucchetti, Jérémy
  • Santugini, Marc

Abstract

It has long been recognized that the quality of property rights greatly impacts the economic development of a country and the use of its natural resources. Since Long [13], the conventional wisdom has been that ownership risk induces a firm to overuse the stock of a resource. However, the empirical evidence is mixed. In particular, Bohn and Deacon [1] find that weak property rights have an ambiguous effect on present extraction. We provide a theoretical model supporting these mixed observations in a common-pool resource environment. We show that if ownership risk includes a risk of expropriation in which the identities of the excluded firms are unknown ex ante, then the present extraction of all firms may decrease along with a higher risk of expropriation. The elasticity of demand for the resource is key in explaining the effect of ownership risk on present extraction.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0095069611000970
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 63 (2012)
Issue (Month): 2 ()
Pages: 242-259

as in new window
Handle: RePEc:eee:jeeman:v:63:y:2012:i:2:p:242-259

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622870

Related research

Keywords: Common-pool resource; Expropriation; Extraction behavior; Ownership risk; Property rights; Tragedy of the commons;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Hotte, Louis & Long, Ngo Van & Tian, Huilan, 2000. "International trade with endogenous enforcement of property rights," Journal of Development Economics, Elsevier, vol. 62(1), pages 25-54, June.
  2. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
  3. Christos Koulovatianos & Leonard J. Mirman, 2005. "The Effects of Market Structure on Industry Growth: Rivalrous Non-excludable Capital," Vienna Economics Papers 0501, University of Vienna, Department of Economics.
  4. Long, Ngo Van, 1975. "Resource extraction under the uncertainty about possible nationalization," Journal of Economic Theory, Elsevier, vol. 10(1), pages 42-53, February.
  5. Bohn, Henning & Deacon, Robert, 1997. "Ownership Risk, Investment, and the Use of Natural Resources," Discussion Papers dp-97-20, Resources For the Future.
  6. Farzin, Y Hossein, 1984. "The Effect of the Discount Rate on Depletion of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 841-51, October.
  7. J. M. Hartwick & P. A. Sadorsky, 1990. "Duopoly in Exhaustible Resource Exploration and Extraction," Canadian Journal of Economics, Canadian Economics Association, vol. 23(2), pages 276-93, May.
  8. Hanan G. Jacoby & Guo Li & Scott Rozelle, 2002. "Hazards of Expropriation: Tenure Insecurity and Investment in Rural China," American Economic Review, American Economic Association, vol. 92(5), pages 1420-1447, December.
  9. Frederick van der Ploeg, 2008. "Voracious Transformation of a Common Natural Resource into Productive Capital," OxCarre Working Papers 002, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  10. Stiglitz, Joseph E & Dasgupta, Partha, 1981. " Market Structure and Resource Extraction under Uncertainty," Scandinavian Journal of Economics, Wiley Blackwell, vol. 83(2), pages 318-33.
  11. Salant, Stephen W, 1976. "Exhaustible Resources and Industrial Structure: A Nash-Cournot Approach to the World Oil Market," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 1079-93, October.
  12. Tornell, Aaron & Velasco, Andes, 1992. "The Tragedy of the Commons and Economic Growth: Why Does Capital Flow from Poor to Rich Countries?," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1208-31, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Eric Fesselmeyer & Marc Santugini, 2009. "Strategic Exploitation of a Common Resource under Environmental Risk," Cahiers de recherche 09-08, HEC Montréal, Institut d'économie appliquée, revised Feb 2012.
  2. Torfinn Harding & James Cust, 2013. "Institutions and the Location of Oil Exploration," Economics Series Working Papers OxCarre Research Paper 12, University of Oxford, Department of Economics.
  3. Frederick van der Ploeg, 2012. "Breakthrough Renewables and the Green Paradox," OxCarre Working Papers 091, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  4. Rick van der Ploeg & Dominic Rohner, 2010. "War and Natural Resource Exploitation," OxCarre Working Papers 042, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  5. Frederick van der Ploeg, 2012. "Resource Wars and Confiscation Risk," OxCarre Working Papers 097, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  6. Kelly Wendland & David Lewis & Jennifer Alix-Garcia, 2014. "The Effect of Decentralized Governance on Timber Extraction in European Russia," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 57(1), pages 19-40, January.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:63:y:2012:i:2:p:242-259. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.