Might Makes Rights: A Theory of the Formation and Initial Distribution of Property Rights

Abstract

This paper is a theoretical and empirical investigation into the formation and initial distribution of property rights. Violence is singled out as a major constraint on this formation process. Its role is explicitly modeled in a choice theoretic framework and some of the implications are tested using data collected from contracts written during the California gold rush of 1848.

Economic Organization and the Trade-offs between Productive and Destructive Entrepreneurship

“…Until the publication of Coase (1960), this issue was largely neglected. Much of the post-Coasian property rights literature (e.g., Alchian 1965;Demsetz 1964Demsetz , 1967Alchian and Demsetz 1972;Barzel 1987Barzel , 1994Barzel , 1997Umbeck 1981) dealt with the meaning of ownership, the relationship between property rights and ownership, and the importance of legal considerations for understanding ownership. However, no clear understanding emerged of issues such as how much exclusivity over uses of assets is required before one qualifies as "owner"; what determines the observed concentration of different types of rights in the hand one agent; and what is the role played by legal considerations in the understanding of ownership (see Foss and Foss 2000a).…”

Assets, Attributes and Ownership

“…Note how this quotation indicates that the NPRA is really a theory of the allocation of ownership in a setting where ownership is a perfectly well-defined concept. This may be contrasted with the analysis of the emergence of the institution of ownership in, for example, Umbeck (1981).…”

“…Coase's paper gave rise to a spate of work on property rights and ownership (e.g., Alchian 1965;Demsetz 1964Demsetz , 1967Alchian and Demsetz 1972;Barzel 1982Barzel , 1987Barzel , 1994Barzel , 1997Barzel , 1999Cheung 1969a&b, 1983Umbeck 1981), that is, the OPRA. In retrospect, it is possible to see much of this work as concentrating on clarifying issues relating to ownership that Coase had not mentioned or had left as puzzles in the 1960 paper.…”

“…Common to the various contributions to the OPRA is the overall conceptualization of property rights as social relations pertaining to the use of scarce resources and supported (enforced) by the formal laws, mores and customs of a social system (Alchian 1965;Demsetz 1967) as well as by private enforcement (Umbeck 1981;Barzel 1997). Furthermore, the literature developed a more refined categorization of property rights, for example, introducing distinctions between use rights, income rights, rights to exclude, and rights to alienate assets.…”

Implementation of pasture leasing rights for mobile pastoralists – a case study on institutional change during post-socialist reforms in Azerbaijan

“…during the 1870s in the US Hill 1975, 1990), the rapid development and disappearance of rights during the American gold rush (Umbeck 1977), land clearing under shifting cultivation in Indonesia (Angelsen 1995) or on-going settlement in the Brazilian Amazon (Alston et al 1999). Besides the net present value of land, power and the interaction of political and local processes are found to influence the definition and allocation of property rights (Umbeck 1981;Alston et al 1999). …”