The tragedy of the commons: property rights and markets as solutions to resource and environmental problems

In one way or another, all environmental and natural resource problems associated with overexploitation or under provision of public goods, arise from incompletely defined and enforced property rights. As a result private decision makers do not consider or internalize social benefits and costs in their production or investment actions. The gap between private and social net returns results in externalities – harmful effects on third parties: overfishing, excessive air pollution, unwarranted extraction or diversion of ground or surface water, extreme depletion of oil and gas reservoirs. These situations are all examples of the 'The Tragedy of the Commons'. In this paper, I consider options for mitigating the losses of open access: common or group property regimes, government tax and regulation policy, more formal private property rights. I briefly summarize the problems and advantages of each option and describe why there has been move toward rights-based instruments in recent years: ITQ (individual transferable quotas), tradable emission permits, and private water rights. Introductions to the papers in the special issue follow.     

An endogenous growth model for the evolution of water rights systems

This article presents a model to help explain the transition path from one water management system to another, typically a commons framework to one of tradable permit‐based property rights. Furthermore, drawing from transaction cost literature, the model demonstrates how this takes place when externalities (the strain on water resources) become severe enough to warrant the increased transaction costs inherent with more complex water rights management frameworks.     

Social dimensions of market-based instruments: Introduction

This themed issue of Land Use Policy builds on the papers presented at an international symposium entitled Social Dimensions of Market-based Instruments, convened by the Charles Darwin University in Darwin, Australia, in November 2010. The symposium set out to review the extent to which market-based instruments were being employed as social policy tools in various contexts, what challenges achieving relevant social policy objectives posed, what trade-offs arose between environmental, social and economic objectives, and whether and how tensions could be resolved. The contributions to this themed issue provide conceptual-theoretical and empirical takes on the topic. They consider poverty, property rights and equality perspectives of participation and quantify social implications at the program, regional and national levels. They reveal converging messages, e.g. in relation to treatment of poverty, common property rights and nesting across scales. In combination, the papers make a compelling case that social implications of MBIs cannot be ignored and ought to be considered in design and evaluation even if programs do no pursue social objectives, as social dimensions can enhance or affect program effectiveness and efficiency. In doing so, the contributions expand the role that MBIs can play in ensuring sustainable resource use and offer considerations for policy design.     

Informal land registration under unclear property rights: witnessing contracts,redevelopment, and conferring property rights

The significance of informal land registration in property transactions and development has been discussed at length, but there are few examples of in-depth case studies of how this information accessing and collection institution relates to them and how it may create property rights. This paper examines the nature and operation of non-governmental and voluntary land transaction registration practices in Kowloon Walled City, an ideal example of a privately-planned and developed habitat under unclear property rights due to jurisdictional disputes between China and Britain and no state protection of property rights or intervention in building control existed. Based on documentary evidence interpreted from a Coasian and Hayekian stance, it advances the proposition that the contracts the Kowloon Walled City Kaifong Welfare Promotion Association (hereafter the Kaifong Association) sought to represent as a witness built up its political credibility as a representative body. Such a role not only reduced transaction costs of contract enforcement and, hence, facilitated redevelopment, but also became that of a quasi-government land registrar due to the popularity of its witnessing service, which, under specific circumstances, served as the basis for the assignment of de jure private property rights by the state.     

土地登记制度的理论基础研究

土地登记制度必须有科学的理论基础才会有存在的价值和发展的空间。土地登记制度的理论基础是新制度经济学的交易成本理论、民法学的物权变动理论和公共管理学的有效政府理论,旨在解决土地登记制度中“为何登记”、“登记什么”、“如何登记”的理论问题,为土地登记制度的建设和创新提供坚实的理论基础。     

Water rights for variable supplies*

The relative merits of different systems of property rights to allocate water among different extractive uses are evaluated for the case where variability of supply is important. Three systems of property rights are considered. In the first, variable supply is dealt with through the use of water entitlements defined as shares of the total quantity available. In the second, there are two types of water entitlements, one for water with a high security of supply and the other a lower security right for the residual supply. The third is a system of entitlements specified as state‐contingent claims. With zero transaction costs, all systems are efficient. In the realistic situation where transaction costs matter, the system based on state‐contingent claims is globally optimal, and the system with high‐security and lower security entitlements is preferable to the system with share entitlements.     

自然资源资产价值可持续实现路径分析

基于马克思劳动价值论视角阐释"两山"理论的新时代内涵,对自然资源资产价值实现路径进行理论分析,采用案例分析法、质性研究法,分析"森林生态银行"运行模式实现自然资源资产价值的路径及其运作过程中面临的问题,探讨自然资源资产价值可持续实现的路径。结果表明:"森林生态银行"运行模式实现自然资源资产价值是以生态资源为基础,通过精准调查,在明晰生态资源产权的前提下,运用经济学方法对其价值进行核算,以直接或者间接利用权属交易、生态服务交易、产业化等方式将生态产品货币化。因此,应该建立市场化生态要素产权制度,引入市场经营主体发展生态产业,建立"公私合营"的生态产品交易制度,以便推进自然资源资产价值得以可持续实现。     

Understanding property market operations from a dual institutional perspective: The case of Lagos,Nigeria

This paper examines the Nigeria Land Use Act and considers how provisions of the Act inform and influence traditional landholding systems, the operation of the commercial real estate market, and the activities of the “omo-onile.” The research adopts a qualitative strategy and combines analysis of legal statute with in-depth, semi-structured interviews with market participants active in different capacities within the land and property markets of Lagos, Nigeria.The paper identifies a number of inconsistencies in the provisions of the Act and concludes that the recognition given to the traditional landholding system by the Act has not been effective in tackling informality and illegality in Lagos land and property markets.The paper provides insight into how informal institutions of norms, culture, and conventions of a real estate market characterize property ownership and affect transaction processes. This study shows how informal institutions may be used to circumvent formal institutions of a market when formal rights to property are poorly delineated and assigned. In these conditions market actors will incur higher transaction costs in the process of policing transactions and enforcing contractual agreements.     

A Transaction Cost Primer on Farm Organization

Agricultural economists, with their knowledge of farming, are well positioned to take advantage of the fertile ground of economic organization. The transaction cost paradigm is particularly useful in addressing such questions and is outlined in this paper. The overriding theme in the transaction cost approach is that patterns of ownership and contracts are chosen to mitigate transaction costs, which result from attempts to establish and maintain property rights. In agriculture, transaction costs are heavily influenced by Mother Nature. Nature's uncertainty, via weather and pests, leads to moral hazard and seasonal forces impose constraints on production cycles that are not often found in the production of most other commodities. Applications in land contracts, asset control, and business organization are discussed.     

Redefining property rights over collective land in the urban redevelopment of Shenzhen,China

Urban development in China is based on two types of land ownership, namely, state land owned by states and collective land owned by village collectives. Legally speaking, urban development must be based on state land. In practice, informal development based on collective land has played important roles in the rapid urbanization process over the past decades. Nonetheless, the vague property rights over collective land have led to inferior and suboptimal development outcomes in expansive urban areas. The redevelopment of collective land has become an important means to sustain urban development in an ongoing urbanization process. By adopting theoretical perspectives from New Institutional Economics, this study presents an integrated conceptual framework on the institutional arrangements of land property rights and transaction costs to understand the changes in land policies and their institutional implications for the redevelopment of collective land in Shenzhen, China. The findings reveal that the new policies have redefined the relationship among the government, village collectives, and real estate developers as well as their property rights over collective land. The change of institutional arrangements in land property rights has significantly reduced the transaction costs in the redevelopment process and effectively promoted land redevelopment activities.     

Patterns of revenue distribution in rural residential land consolidation in contemporary China: The perspective of property rights delineation

Rural residential land consolidation (RRLC) in contemporary China refers to activities related to the replanning and reallocation of rural residential land to construct new rural residences, to increase land-use efficiency and to improve rural amenities in the context of rural revitalization. The objective of this study is to elucidate the patterns of revenue distribution in RRLC by addressing the following questions. Given incomplete and ambiguous formal rules in China, how can rural land property rights be delineated to distribute and coordinate interests among stakeholders in RRLC? Furthermore, what are the factors that determine the delineation of rural land property rights to distribute land revenue? A theoretical framework for the delineation of rural land property rights is developed from the perspectives of the institutional environment, governance and resource allocation. A comparative analysis of two typical cases of RRLC in contemporary China is conducted to support the research hypotheses. This study finds that bargaining power is the fundamental determinant of delineating rural land property rights to distribute revenue in RRLC. Furthermore, intergovernmental competition motivates the local government to fully deploy strong bargaining power, while concerns about social stability provide some constraints. A strong capability for collective action reinforces the bargaining power of rural households. This study provides new insights into the delineation of rural land property rights and subsequent revenue distribution based on distinctive institutional settings and RRLC in China, enriching the theoretical and empirical findings in the property rights school. Policy recommendations on revenue sharing of RRLC are proposed accordingly.     

自然资源产权制度研究：理论与进展

研究目的:基于第五届"社会—生态系统"制度分析国际研讨会学者观点,对当前中国自然资源产权制度研究进行梳理,为重塑中国自然资源产权治理体系和形成中国特色的自然资源产权理论提供依据.研究方法:观点综述法、文献调研法.研究结果:(1)当前自然资源产权制度在法律、实际和认知三个维度都存在不完整性并对利用与治理实践产生了影响;(2)产权及其治理体系重塑需要考虑4个方面的因素影响:一是资源本身特征,二是利益相关者的偏好和价值观,三是制度内生性,四是现有体制机制和政府行为;(3)产权制度的实际功能比形式更重要,让制度可信是制度和治理体系的前提.研究结论:中国自然资源产权制度改革是一项复杂的工作,需要综合考虑资源特征、利益相关者的偏好和价值观、制度内生性和当前国家体制机制的影响,改革实践呼唤更为本土化的理论支撑.     

威廉姆森分析范式下农地经营权抵押贷款问题研究——以山东枣庄市为例

山东枣庄是我国较早开展土地产权制度改革的试点城市,其土地经营权抵押贷款的改革尤为突出。在实践过程中,通过剥离农地经营权、创建担保公司等改革手段,为农地规模化经营提供融资保障。但在实践过程中,混合治理结构带来的交易成本过高问题也渐渐显露。本文引入威廉姆森范式理论,对枣庄市农地经营权抵押贷款中的治理结构、交易性质以及交易频率等进行了分析,得出一体化的治理结构可有效降低交易成本,最后从一体化组织构建、行政关系、合作方式与原则以及风险防范等角度提出一体化治理结构的政策建议。     

Sustainability and Land tenure: Who owns the floodplain in the Pantanal,Brazil?

In seeking to achieve poverty alleviation and environmental conservation, public policy has often centred on guaranteeing land titles to local peoples. However, such approaches have brought unintended outcomes, replacing small-scale economies and natural areas by intensive exploitation of resources with no clear improvement in local people’s wellbeing. To understand this, we go beyond a general political ecology framing to consider relations between sustainability and land tenure, focusing on the intersection of economics, ecology and anthropology to understand how land tenure, property and use play out on the ground. We draw together different concepts including bundle of rights, de facto and de jure resource use, property regimes, density-dependence and non-equilibrium theory. The significance of this three-discipline view is illustrated through a case study of the Pantanal wetland, Brazil, where conservationists, the government and the local population contest ownership of the Paraguay River floodplain. Government sought to address conflicts around tenure and access through a narrow view of property, which failed to encompass the overlapping layers of land tenure, property and use on the ground and only served to create further legal battles. This article concludes that a more complex view combining the three perspectives is needed in the case of the Pantanal, and in other cases of contested property rights, in order to resolve conflicting claims and foster sustainability. We dissect both the power plays involved between different groups competing for control of a valuable resource, and the legal frameworks which can and should provide checks and balances in the system. The more nuanced grasp that emerges of local systems of tenure and access, of how these diverge from western property concepts, and of their environmental implications favours a better understanding of local realities, allowing for better management policy and consequently contributing more effectively towards poverty alleviation and environmental protection.     

Intermediaries in environmental offset markets: Actions and incentives

Transaction cost theory and application tells us that when buyers and sellers in a market incur transaction costs, intermediaries may become involved. Specifically, intermediaries influence the cause of the transaction costs to buyers and sellers such that transaction costs are reduced. In this paper we assess if and how this occurs for a number of case study government created and private emergent intermediaries in Australian environmental offset markets. We find that the causes of transaction costs to buyers and sellers in offset markets – asset specificity, uncertainty and transaction frequency are influenced downwards by intermediaries. The degree of influence depends on the nature of the good traded in the offset market. We also assessed if the public intermediaries studied were operating in the offset markets to reduce the incidence of probity hazard (poor transactions) from private intermediaries. We found that this was not the case.     

Can we avoid overdevelopment of river floodplains by economic policies?: A case study of the Ouse catchment (Yorkshire) in the UK

River floodplains are significant environmental resources in that they provide multiple ecosystem services. However, river floodplains are/tend to be overdeveloped because indirect-use values linked with ecosystem services are overlooked by private landowners. In a case study of the Ouse catchment, it turns out that river floodplains tend to be overdeveloped in upstream areas because of a unidirectional spatial externality. We set a simple model that considers both direct- and indirect-use values to analyse the social optimisation. The essential point is that we must consider two types of environmental externalities related to the ecosystem services of river floodplains to make decisions on floodplain development. First, the development of river floodplains has opportunity costs in terms of lost ecosystem services. Second, the development of floodplains increases flood risks to people downstream (imposes a unidirectional spatial external costs). Theoretically, we can easily deal with the problem by zonal economic policies: zonal taxes or subsidies (price policies) and zonal marketable permits or transferable development rights (quantity policies). On the practical side, however, there are so many problems. Then, such approaches are too complex to use. First of all, we have to specify real complicated economic and physical systems which show non-linearity, irreversibility, site-specific relationships, and inter-dependency between systems and sites. Secondly such policies should be ‘zonal’, which might impose substantial transaction costs. In order to apply them to real situations, we have to determine the appropriate number of zones, their sizes and geographical shapes, and then set appropriate rates or amounts of permits in each zone. Furthermore, the determination of zones is difficult because of the trade-off between the internalisation of externalities and implementation costs of policies, which are also related to political frictions and market failure.     

Eviction policy in postwar Angola

Angola's four decades of civil war continue to have a profound effect on the country's recovery and development. While the end to the war in 2002 and the subsequent extraction of natural resources has fueled the country's economic recovery for a minority, for the majority recovery depends less on natural resource extraction than it does on acquiring and maintaining secure access to land and property upon which viable livelihoods can be rebuilt. However the current large scale evictions in urban and peri-urban areas of the country and the resulting acute tenure insecurity is significantly worrying, and is the single most acute land rights, land policy, and political problem in the country. Aspects of the country's constitution and the development of the postwar land law facilitate eviction, and an important opportunity to upgrade postwar informal land rights has been missed. Land and property rights problems have played a significant role in the country's armed conflicts and social problems, and current trends are constructing a difficult future.     

构建森林生态资源产权交易机制的理论探索

森林生态资源的公共物品属性引发了森林生态生产和消费过程中的正、负外部性,进而导致森林生态供需失衡。通过构建产权交易机制可以消除由于外部性而引发的森林生态资源供需失衡问题。森林生态资源利益相关主体包括森林经营者、厂商和居民,将享受良好生态环境的权利赋予居民,由企业承担环境治理费用,将森林生态资源的收益权赋予森林经营者,采用污染者付费模式,借助产品市场所构建的森林生态资源交易模型,能够在交易成本最低的前提下实现森林生态资源供需均衡。森林生态产权交易成本包括创建成本和运行成本两部分,当森林生态资源产权交易的运行成本小于政府行政管理成本时,产权交易市场才被认为是有效的。对于任何一项森林生态资源来讲,在稀缺性、竞争性和排他性3种经济属性上表现出相应的适应性,是建立该项森林生态资源产权交易市场的前提。现阶段只有森林景观和碳汇两类森林生态资源的经济属性符合私有化产权交易的基本条件。     

Whose scarcity? Whose property? The case of water in western India

Water scarcity is usually portrayed in absolute or volumetric terms. But do most analyses of scarcity focus on how the ‘problem’ of scarcity is constructed, the need to disaggregate users and their entitlements and the imperative to look at the politics of distribution and technology choice within a frame of political economy? By taking the case of water scarcity in Kutch, western India which is supposed to benefit from the controversial Sardar Sarovar Narmada Project (SSP), the paper demonstrates how scarcity has emerged as a ‘meta-narrative’ that justifies controversial schemes such as large dams, allows for simplistic portrayals of property rights and resource conflicts and also ignores the cultural and symbolic dimensions of resources such as water. Moreover, water scarcity tends to be naturalised and its anthropogenic dimensions are whitewashed. It is thus necessary to distinguish between the biophysical aspects of scarcity that are lived and experienced differently by different people and its ‘constructed’ aspects. The paper draws on a wide range of conceptual approaches such as political ecology, common property resource theory and post-institutional approaches to highlight that scarcity is not a natural condition. Instead, it is usually socially mediated and the result of socio-political and institutional processes. It also argues that while institutional perspectives have played in a key role in moving away from alarmist portrayals of scarcity and property rights by demonstrating how local people can manage and live with scarcity, they need to be complemented by analyses that locate property rights within wider historical, cultural and socio-political processes that combine both discursive and materialist analyses.     

中国林业碳汇市场运行机制的探讨

依据林业碳汇的微观经济学,研究了中国将来林业碳汇的发展情况,提出了建立健全相关法律体系,加大政府财政支持力度,加强林业碳汇项目产权制度建设,降低林业碳汇交易中的交易成本,加强林业碳汇计量、监测工作等林业碳汇市场发展的建议。