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The Demarcation of Land and the Role of Coordinating Institutions

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  • Gary D. Libecap
  • Dean Lueck

Abstract

This paper examines the origins and economic effects of the two dominant land demarcation systems: metes and bounds (MB) and the rectangular system (RS). Under MB property is demarcated by its perimeter as indicated by natural features and human structures and linked to surveys within local political jurisdictions. Under RS land demarcation is governed by a common grid with uniform square shapes, sizes, alignment, and geographically-based addresses. In the U.S. MB largely is used in the original 13 states, Kentucky, and Tennessee. The RS is found elsewhere under the Land Ordinance of 1785 that divided federal lands into square-mile sections. We develop an economic framework for examining land demarcation systems and draw predictions. Our empirical analysis focuses on a 39-county area of Ohio where both MB and RS were used in adjacent areas as a result of exogenous historical factors. The results indicate that topography influences parcel shape and size under a MB system; that parcel shapes are aligned under the RS; and that the RS is associated with higher land values, more roads, more land transactions, and fewer legal disputes than MB, all else equal. The comparative limitations of MB appear to have had negative long-term effects on land values and economic activity in the sample area.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14942.

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Date of creation: May 2009
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Publication status: published as The Demarcation of Land and the Role of Coordinating Institutions with Dean Lueck, June 2011, Journal of Political Economy
Handle: RePEc:nbr:nberwo:14942

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  6. Joseph Farrell & Paul Klemperer, 2006. "Co-ordination and Lock-in: Competition with Switching Costs and Network Effects," Economics Papers 2006-W07, Economics Group, Nuffield College, University of Oxford.
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  8. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, 09.
  9. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
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Cited by:
  1. Ramello, Giovanni B., 2010. "Property rights and externalities: The uneasy case of knowledge," POLIS Working Papers 149, Institute of Public Policy and Public Choice - POLIS.
  2. Lee J. Alston & Edwyna Harris & Bernardo Mueller, 2009. "De Facto and De Jure Property Rights: Land Settlement and Land Conflict on the Australian, Brazilian and U.S. Frontiers," CEPR Discussion Papers 607, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  3. Bernardo Mueller & Lee Alston & Edwyna Harris, 2011. "De Facto And De Jure Property Rights:Land Settlement And Land Conflict On The Brazilian Frontier In The 19thcentury," Anais do XXXVIII Encontro Nacional de Economia [Proceedings of the 38th Brazilian Economics Meeting] 060, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].

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