Coasean Bargaining to Address Environmental Externalities

Libecap, Gary D.

doi:10.3386/w21903

Cited by 12 publications

(12 citation statements)

References 28 publications

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“…Property law creates a bundle of rights which property owners are free to exercise and which protect them from interference, and, while subject to transaction costs, voluntary exchange allocates property to those who value it most (Cooter and Ulen 2014). Elaborating on the canonical 1960 article 'The Problem of Social Cost' by Ronald Coase, Libecap (2016) demonstrates in detail that, if property rights are not defined, the number of claimants could be unlimited, rents dissipated, and trade becomes impossible. The greater the benefits from establishing property rights or the greater the losses from their absence, the higher the transaction costs.…”

Section: Property Rights and Contracts As Fundamental Building Blocksmentioning

confidence: 99%

“…In the context of natural capital, however, the assignment of property rights may not always be feasible, or their exercise may not always be beneficial. Libecap (2016) asserts that the transaction costs of Coasean exchange tend to be high for 'very broad-scale environmental externalities'. Given that mitigation values or costs vary within or across countries, long-term benefits or costs are different or uncertain under international environmental agreements.…”

Section: Property Rights and Contracts As Fundamental Building Blocksmentioning

confidence: 99%

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The role of valuation and bargaining in optimising transboundary watercourse treaty regimes

Macatangay

Rieu‐Clarke

2018

Int Environ Agreements

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In the face of water scarcity, growing water demands, population increase, ecosystem degradation, or climate change, transboundary watercourse states inevitably have to make difficult decisions on how finite quantities of water are distributed. Such waters, and their associated ecosystem services, offer multiple benefits. Valuation and bargaining can play a key role in the sharing of these ecosystems services and their associated benefits across sovereign borders. Ecosystem services in transboundary watercourses essentially constitute a portfolio of assets. While challenging, their commodification, which creates property rights, supports trading. Such trading offers a means by which to resolve conflicts over competing uses and allows states to optimise their 'portfolios'. However, despite this potential, adoption of appropriate treaty frameworks that might facilitate a marketbased approach to the discovery and allocation of water-related ecosystem services at the transboundary level remains both a challenge and a topic worthy of further study. Drawing upon concepts in law and economics, this paper therefore seeks to advance the study of how treaty frameworks might be developed in a way that supports such a market-based approach to ecosystem services and transboundary waters.

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Section: Property Rights and Contracts As Fundamental Building Blocksmentioning

confidence: 99%

Section: Property Rights and Contracts As Fundamental Building Blocksmentioning

confidence: 99%

The role of valuation and bargaining in optimising transboundary watercourse treaty regimes

Macatangay

Rieu‐Clarke

2018

Int Environ Agreements

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“…The underlying arguments for retention by the state were not fundamentally due to an inability to define property rights effectively (Libecap, 1981;Libecap, 2007). The key problem for state regulation or ownership in either of these cases is that neither politicians nor bureaucrats are full residual claimants to the benefits and costs of their actions in the way that private owners are, so that incentives and outcomes differ, often creating other, and perhaps costlier, externalities (Libecap, 2016).…”

Section: The Economic Institutions Of Property Rightsmentioning

confidence: 99%

Property Rights to Frontier Land and Minerals: US Exceptionalism

Libecap¹

2018

Self Cite

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Property rights are the most fundamental institution in any society. They determine who has decision-making authority over assets and who bears the costs and benefits of those decisions. They assign ownership, wealth, political influence, and social standing. They make markets possible; define timelines; and provide incentives for investment, innovation, and trade. They mitigate the losses of open access and provide the basis for long-term economic growth. Economists and economic historians have long recognized the importance of secure property rights for economic outcomes. Other political economy, philosophy, historical, and legal literatures emphasize different, but critical attributes based on how property rights are allocated and to whom. The linkages among the social, political, and economic effects are examined here with respect to US and Latin American frontier land and minerals. Property rights were sharply different across the two frontiers with apparent long-term consequences for economic growth, innovation, wealth distribution, private investment in public goods, as well as social and political stability. The distinct assignment of property rights to land and minerals is likely a basis for long-term US exceptionalism in economic performance, individualism, mobility, and optimism. The mechanisms through which property rights to land in a frontier society affect outcomes in a contemporary, highly urban one are complex. Because property rights to land were broadly distributed, Americans could participate in capital markets using land as collateral. This ability shaped opinions regarding markets, capitalism, and individual opportunity. In the 21st century, these critical attributes may be eroding, inviting more analysis from economists and economic historians. Introduction.The above quotation points to attributes of property rights that are more individualistic, social, and political than are those emphasized in most economic discussions. Nevertheless, there are direct linkages across these characteristics, and emphasizing the relationships is the focus of this Chapter. Attention is directed to frontiers in North and South America where property rights were distributed to land and minerals in very dissimilar ways, seemingly leading to starkly different consequences-economic, political, and social. These varying frontier experiences appear to have had long-term consequences. Frontiers provide a natural experiment because, by definition, they are areas where new rights to resources are emerging. The discussion is based on the existing literature and does not provide tests of hypotheses regarding property rights and various outcomes. Causality between property rights structures and observed variation in immigration patterns, middle class development, innovation, social and political cohesion, individualism, reduced reliance upon the state, private investment in public goods as well as, long-term economic growth seems, however, to be supported by available research.Property rights are the most fundamental inst...

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Section: The Economic Institutions Of Property Rightsmentioning

confidence: 99%

Property Rights to Frontier Land and Minerals: US Exceptionalism

Libecap

2018

Handbook of Cliometrics

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Excellent research assistance was provided by Chester Lindley. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Coasean Bargaining to Address Environmental Externalities

Cited by 12 publications

References 28 publications

The role of valuation and bargaining in optimising transboundary watercourse treaty regimes

The role of valuation and bargaining in optimising transboundary watercourse treaty regimes

Property Rights to Frontier Land and Minerals: US Exceptionalism

Property Rights to Frontier Land and Minerals: US Exceptionalism

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