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Baikurina IES Seminar 2008

Baikurina IES Seminar 2008. BoudewijnBouckaert Uiversity of Ghent EMLE-Professor. Property and Liberty. Property is one of the basic institutions of a free society = right to decide freely on use,proceeds,transfer and destruction of a good

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Baikurina IES Seminar 2008

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  1. Baikurina IES Seminar 2008 BoudewijnBouckaert Uiversity of Ghent EMLE-Professor

  2. Property and Liberty • Property is one of the basic institutions of a free society • = right to decide freely on use,proceeds,transfer and destruction of a good • This right is defined within a set of general rules(proerty order) and protected by an independentjudiciary

  3. Functions of Property in a Free Society • Moral : allows different moral conceptions of life to coexist • Political : limit on government power;allows people to build up wealth independent from government • Economic: avoids costly conflicts over scarce means,allows rational management of resources; allows certainty in market transfers

  4. Some historical notions • European Legal History: the legacy of Roman law • Ancient Rome: dominium=tribal rule;revendicatio and actio negatoria • Roman Empire: these actions extended to all citizens of the Empire • Middle Ages: Italian commentators: dominium is a right(use,enjoy,’abuse’) • Middle Ages: Pope accepts property as a ‘natural right’ • Fench Revolution and Code Civil : property = basic principle of legal order

  5. Some Historical Notions • The legacy of the common law • England: 11th century ‘perfect feudalism’ • Alliance king-middle classes: strenghtening position of free tenants (Quia Emptores, Free Will) • 1925 : Property Act; fee simple is similar to continental property

  6. Tragedy of the commons • Free access goods # common property • Tragedy is with FA-goods • Problems: • Overuse • Premature use • Underinvestment • Examples:air, open sea, resources in LDC

  7. Common Property • Optimal Commons : when sum of governance costs and exclusion costs are the lowest • Governance costs : information costs, negociation costs; monitoring costs • Exclusion costs:marking,registration, adjudication • Examples: settlers in US,lobster fishing on East US coast,land reform in India

  8. Tragedy the anticommons • Fragmentation of property rights: frontstores in Moscow • Rebundling= very costly (complementarity, dragging with feet, Cournot duopoly prices) • Important for privatisation in transition economies • Reason to regulate?

  9. Possession and Registration • Signalling rule: signal of property • Possession : to protect acquirer ‘a non domino’; good for low value goods, for non-durable goods, for frequently transferred goods( money) • Registation: for durable,high value, unique goods • Capital function of registration: Hernando de Soto; formalisation of property allows decrease of monitoring, use of goods as a collateral

  10. Burning Questions • Voluntary slavery:can you sell yourself? What about soccer players • Property rights on babies and baby markets • Takings; can the government expropriate and when (Kelo-case) • Who owns the moon ???

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