Securing Property Rights

Giacomo Ponzetto, Arnold Behrer, Edward Glaeser and Andrei Shleifer

No 11545, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: A central challenge in securing property rights is the subversion of justice through legal skill, bribery, or physical force by the strong—the state or its powerful citizens—against the weak. We present evidence that undue influence on courts is a common concern in many countries, especially among the poor. We then present a model of a water polluter whose discharges contaminate riparian properties belonging to multiple owners, and we compare property rules, liability rules, and regulation from the efficiency viewpoint. When the polluter can subvert the assessment of damages, property rules are preferred to liability rules when there are few parties and bargaining is feasible, but they excessively deter efficient pollution when bargaining between many parties fails. Regulation that enforces partial abatement may be preferred to either of the extreme rules. Our model helps explain the evolution of the legal treatment of water pollution from property rules to liability rules to regulation. An empirical analysis of water quality in the U.S. before and after the Clean Water Act shows that the effects of regulation are consistent with several predictions of the model.

Keywords: Property rights; Court subversion; Liability rules; Property rules; Regulation; Water pollution (search for similar items in EconPapers)
JEL-codes: K11 K13 K32 L51 O13 O17 P14 Q53 (search for similar items in EconPapers)
Date: 2016-09
New Economics Papers: this item is included in nep-ene and nep-law
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Citations: View citations in EconPapers (14)

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Related works:
Journal Article: Securing Property Rights (2021)
Working Paper: Securing property rights (2020)
Working Paper: Securing Property Rights (2016)
Working Paper: Securing Property Rights (2016)
Working Paper: Securing Property Rights (2016)
Working Paper: Securing Property Rights (2016)
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