On the Dual Nature of Weak Property Rights

Louis Hotte (), Randy McFerrin () and Douglas Wills ()
Additional contact information
Randy McFerrin: New Mexico State University, U.S.A.
Douglas Wills: University of Washington

No 1103E, Working Papers from University of Ottawa, Department of Economics

Abstract: In 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.

Keywords: Natural Resources; Property Rights; Trespass; Theft; Over-Exploitation; Under-Exploitation (search for similar items in EconPapers)
JEL-codes: K11 K42 N50 O13 Q2 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2011
New Economics Papers: this item is included in nep-env and nep-law
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: On the dual nature of weak property rights (2013)
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