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Large Scale Institutional Changes: Land Demarcation Within the British Empire


  • Gary D. Libecap
  • Dean Lueck
  • Trevor O'Grady


This paper examines the economics of large scale institutional change by studying the adoption of the land demarcation practices within the British Empire during the 17th through 19th Centuries. The advantages of systematic, coordinated demarcation, such as with the rectangular survey, relative to individualized, haphazard demarcation, such as with metes and bounds, for reducing transaction costs were understood by this time and incorporated into British colonial policy. Still, there was considerable variation in the institutions adopted even though that the regions had similar legal structures and immigrant populations. We study the determinants of institutional change by developing an analytical framework, deriving testable implications, and then analyzing a data set that includes U.S., Canadian, Australian, and New Zealand temperate colonies using GIS data. We find that a simple framework that outlines the costs and benefits of implementing the demarcation systems can explain the different institutions that are observed. Once in place, these institutions persist, indicating a strong institutional path dependence that can influence transaction costs, the extent of land markets, and the nature of resource use. The agricultural land institutions that we examine remain in force today, in some cases over 300 years later. In this regard, institutions of land are durable, much as are other institutions, such as language and law.

Suggested Citation

  • Gary D. Libecap & Dean Lueck & Trevor O'Grady, 2010. "Large Scale Institutional Changes: Land Demarcation Within the British Empire," NBER Working Papers 15820, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15820
    Note: DAE EEE LE

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    References listed on IDEAS

    1. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1231-1294.
    2. Avinash Dixit, 2003. "Trade Expansion and Contract Enforcement," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1293-1317, December.
    3. Demsetz, Harold, 1997. "The Firm in Economic Theory: A Quiet Revolution," American Economic Review, American Economic Association, vol. 87(2), pages 426-429, May.
    4. Demsetz, Harold, 1988. "The Theory of the Firm Revisited," Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 141-161, Spring.
    5. Gary Richardson & Dan Bogart, 2008. "Institutional Adaptability and Economic Development: The Property Rights Revolution in Britain, 1700 to 1830," NBER Working Papers 13757, National Bureau of Economic Research, Inc.
    6. Bogart, Dan & Richardson, Gary, 2009. "Making property productive: reorganizing rights to real and equitable estates in Britain, 1660–1830," European Review of Economic History, Cambridge University Press, vol. 13(01), pages 3-30, April.
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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • N51 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - U.S.; Canada: Pre-1913
    • N53 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: Pre-1913
    • 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


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