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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.

Suggested Citation

  • Gary D. Libecap & Dean Lueck, 2009. "The Demarcation of Land and the Role of Coordinating Institutions," NBER Working Papers 14942, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:14942
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Giovanni Ramello, 2011. "Property rights and externalities: the uneasy case of knowledge," European Journal of Law and Economics, Springer, vol. 31(1), pages 123-141, February.
    2. Bessen James, 2009. "Evaluating the Economic Performance of Property Systems," Review of Law & Economics, De Gruyter, vol. 5(3), pages 1037-1061, December.
    3. Antony Dnes & Dean Lueck, 2009. "Asymmetric Information and the Law of Servitudes Governing Land," The Journal of Legal Studies, University of Chicago Press, vol. 38(1), pages 89-120, January.
    4. von Wangenheim Georg, 2011. "Evolutionary Theories in Law and Economics and Their Use for Comparative Legal Theory," Review of Law & Economics, De Gruyter, vol. 7(3), pages 737-765, December.
    5. 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," NBER Working Papers 15264, National Bureau of Economic Research, Inc.
    6. Farley Grubb, 2010. "U.S. Land Policy: Founding Choices and Outcomes, 1781-1802," NBER Chapters,in: Founding Choices: American Economic Policy in the 1790s, pages 259-289 National Bureau of Economic Research, Inc.
    7. 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].

    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • N51 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: Pre-1913
    • N60 - Economic History - - Manufacturing and Construction - - - General, International, or Comparative
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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