On the Dual Nature of Weak Property Rights
AbstractIn the natural resource literature, convertional wisdom holds that weak property rights will cause a resource to be over-exploited. This is because weak property rights are typically perceived as a problem of input exclusion. In this paper, we first present evidence to the effect that weak property rights often take the form of contestable output- or output theft - and that this has an impact or resource use. We then propose a theoretical model of natural resource use under generally weak prperty rights - or weak state presence - when resource users face the dual problem of input exclusion output appropriation. We show that introducing the possibility that outputs can be contested acts as an output tax, with the added twist that resource users effectively determine the level of the tax. This tax has a depressive effect on input use. As a result, whether the resource is under-or over-exploited in equilibrium will depend on the relative severity of output appropriation and input exclusion problems when property rights are generally weak.
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Bibliographic InfoPaper provided by University of Ottawa, Department of Economics in its series Working Papers with number 1103E.
Length: 31 pages
Date of creation: 2011
Date of revision:
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More information through EDIRC
Natural Resources; Property Rights; Trespass; Theft; Over-Exploitation; Under-Exploitation;
Find related papers by JEL classification:
- K11 - Law and Economics - - Basic Areas of Law - - - Property Law
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
- N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-04 (All new papers)
- NEP-ENV-2011-06-04 (Environmental Economics)
- NEP-LAW-2011-06-04 (Law & Economics)
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.:
- Louis Hotte, 2005.
"Natural-resource exploitation with costly enforcement of property rights,"
Oxford Economic Papers,
Oxford University Press, vol. 57(3), pages 497-521, July.
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"Private Storage of Common Property,"
Journal of Environmental Economics and Management,
Elsevier, vol. 43(2), pages 280-302, March.
- GAUDET, Gérard & MOREAUX, Michel & SALANT, Stephen W., 1997. "Private Storage of Common Property," Cahiers de recherche 9704, Universite de Montreal, Departement de sciences economiques.
- Gaudet, G. & Moreaux, M. & Salant, S.W., 1997. "Private Storage of Common Property," Papers 97-08, Michigan - Center for Research on Economic & Social Theory.
- Fafchamps, Marcel & Minten, Bart, 2006. "Crime, Transitory Poverty, and Isolation: Evidence from Madagascar," Economic Development and Cultural Change, University of Chicago Press, vol. 54(3), pages 579-603, April.
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