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Securing Property Rights

Author

Listed:
  • A. Patrick Behrer
  • Edward L. Glaeser
  • Giacomo A. M. Ponzetto
  • Andrei Shleifer

Abstract

A central challenge in securing property rights is the subversion of justice. We present a model of a polluter whose discharges harm multiple owners, and we compare property rules, liability rules, and regulation on efficiency grounds. We provide conditions under which property rules are preferred to liability rules, thus verifying the Calabresi-Melamed conjecture. Regulation that enforces partial abatement may be preferred to either of the extreme rules. An empirical analysis of water quality in the United States before and after the Clean Water Act shows that the effects of regulation are consistent with several predictions of the model.

Suggested Citation

  • A. Patrick Behrer & Edward L. Glaeser & Giacomo A. M. Ponzetto & Andrei Shleifer, 2021. "Securing Property Rights," Journal of Political Economy, University of Chicago Press, vol. 129(4), pages 1157-1192.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/712733
    DOI: 10.1086/712733
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    2. Hans-Bernd Schäfer & Ram Singh, 2018. "Takings of Land by Self-Interested Governments: Economic Analysis of Eminent Domain," Journal of Law and Economics, University of Chicago Press, vol. 61(3), pages 427-459.
    3. Venables, Anthony & Duranton, Gilles, 2018. "Place-Based Policies for Development," CEPR Discussion Papers 12889, C.E.P.R. Discussion Papers.
    4. Sultan Mehmood, 2021. "The impact of Presidential appointment of judges: Montesquieu or the Federalists?," AMSE Working Papers 2118, Aix-Marseille School of Economics, France.
    5. Gandhi, Sahil & Green, Richard K. & Patranabis, Shaonlee, 2022. "Insecure property rights and the housing market: Explaining India’s housing vacancy paradox," Journal of Urban Economics, Elsevier, vol. 131(C).
    6. Nava Ashraf & Alexia Delfino & Edward L. Glaeser, 2019. "Rule of Law and Female Entrepreneurship," NBER Working Papers 26366, National Bureau of Economic Research, Inc.
    7. Zhao, Da & Yu, Ao & Guo, Jingyuan, 2022. "Judicial institutions, local protection and market segmentation: Evidence from the establishment of interprovincial circuit tribunals in China," China Economic Review, Elsevier, vol. 75(C).
    8. Catherine Boone, 2017. "Legal empowerment of the poor through property rights reform: Tensions and trade-offs of land registration and titling in sub-Saharan Africa," WIDER Working Paper Series 037, World Institute for Development Economic Research (UNU-WIDER).
    9. Boulton, Thomas J., 2023. "Property rights and access to equity capital in China," Global Finance Journal, Elsevier, vol. 55(C).
    10. Mehmood, Sultan & Seror, Avner, 2023. "Religious leaders and rule of law," Journal of Development Economics, Elsevier, vol. 160(C).
    11. Julio Dávila, 2021. "Property rights and long‐run capital," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(6), pages 1261-1286, December.
    12. Zhang, Qiong & Shi, Yupeng & He, Angda & Wen, Xueting, 2017. "Property rights security and firm survival: Micro-data evidence from China," China Economic Review, Elsevier, vol. 44(C), pages 296-310.
    13. Agrawal, Ashwini & Kim, Daniel, 2021. "Municipal bond insurance and the U.S. drinking water crisis," LSE Research Online Documents on Economics 118888, London School of Economics and Political Science, LSE Library.
    14. Catherine Boone, 2017. "Legal empowerment of the poor through property rights reform: Tensions and trade-offs of land registration and titling in sub-Saharan Africa," WIDER Working Paper Series wp-2017-37, World Institute for Development Economic Research (UNU-WIDER).
    15. Edward L. Glaeser, 2017. "Real Estate Bubbles and Urban Development," Asian Development Review, MIT Press, vol. 34(2), pages 114-151, September.
    16. Matthieu Chemin, 2020. "Judicial Efficiency and Firm Productivity: Evidence from a World Database of Judicial Reforms," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 49-64, March.
    17. Aram Grigoryan & Mattias Polborn, 2018. "Insecure Property Rights and the Missing Middle," CESifo Working Paper Series 7203, CESifo.
    18. Edward L. Glaeser, 2016. "Real Estate Bubbles and Urban Development," NBER Working Papers 22997, National Bureau of Economic Research, Inc.
    19. Edward L. Glaeser & Wentao Xiong, 2017. "Urban Productivity in the Developing World," NBER Working Papers 23279, National Bureau of Economic Research, Inc.
    20. Cheng, Mingda & Du, Julan & Ye, Chunhui & Zhang, Qi, 2022. "Your misfortune is also mine: Land expropriation, property rights insecurity, and household behaviors in rural China," Journal of Comparative Economics, Elsevier, vol. 50(4), pages 1068-1086.
    21. Perego, Viviana M.E., 2019. "Crop prices and the demand for titled land: Evidence from Uganda," Journal of Development Economics, Elsevier, vol. 137(C), pages 93-109.
    22. Sultan Mehmood, 2021. "The impact of Presidential appointment of judges: Montesquieu or the Federalists?," Working Papers halshs-03161933, HAL.
    23. Ryan H. Murphy, 2023. "State capacity, economic freedom, and classical liberalism," Constitutional Political Economy, Springer, vol. 34(2), pages 165-187, June.
    24. Aberra, Adam & Chemin, Matthieu, 2021. "Does legal representation increase investment? Evidence from a field experiment in Kenya," Journal of Development Economics, Elsevier, vol. 150(C).

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    More about this item

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P14 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Property Rights
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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