(Encyclopedia of Law and Economics 5) Boudewijn Bouckaert-Property Law and Economics -Edward Elgar Publishing (2010)

states not selling 250

tradeable development permits to conserve New Jersey Pinelands 248

Fountainbleu Hotel Corp. v Forty-five

Twenty-five, Inc. (1950) 227 France 21–4

bankruptcy, threat of 21–2 Declaration des Droits de l’Homme

et du Citoyen 22–3 equality 22–3, 28 feudalism 22, 24, 28

French Revolution 6, 21, 25, 28, 34, 43, 49, 192

law see French law National Assembly 22

slave colonies, trade with 214 free market environmentalists 226,

234, 251–6

clean air not inevitably a public good 256

criticising pollution ‘rights’ trading schemes 250

critique of 256–60, 261

natural resource holdings, sale of 250

privatization to solve failures in managing public resources 254–6

conserving and producing environmental goods 256

French law

code of law 23–4, 33, 192, 198 ownership rights of property

absolute ownership 22, 24, 28 apartments 39

characteristics of ownership rights 34

divided ownership 24, 26, 28, 34 history 21–4, 26

property security rights, pledges and hypothecs 39, 40, 42, 48, 49

recordation of 192, 198 specificity principle, flexibilisation

of 46

subject matters of ownership 33–4 suretyships 41–2

trusts 26, 28 French, Susan 145–6

Index 325

Fried, Jesse 281

Fuentes v Shevin (1972) 284

Funk, William 260

Gaius 5, 9, 109 Galenson, David 206

Gasus Dosier-und Fordertechnik GmbH

v The Netherlands [1989] 25 Gehn v Rich (1881) 121

General Accounting Office, US 247 General Act of Brussels 217 Genovese, Eugene 211, 212, 217 Germany

law see Germanic law Nazis 218

slavery in colonies 217

village communities, Maine and 53 Germanic law 33

acquisition rights 41 apartments 39

civil code 26, 41 common property 53

community interests restricting ownership 14, 26, 27

divided ownership 26 history 13–14, 26 options to purchase 41

ownership rights of property 5–6, 27 restricted to tangible objects 34

property security rights and Grundschuld 40, 44, 47–8, 49

Reallast 38

recordation of transactions 192, 198, 200

Roman law, and 5, 14 servitudes 38

trusts 26, 28

uniform concept of ownership 26 unity in, lack of 19

Gilson, Ronald 296

global warming see climate change and global warming

Glossators 19, 20

Goodman, Sandra 251, 253, 255 government see state

Gratianus 13

grazing, open access as 56–7 Greece

Greek law, ancient 5, 7–8 , 191 slavery 204, 207, 210, 211

326 Property law and economics

greenhouse gases 249 Grossi, Paolo 53–4 Grotius, Hugo 20–21 Guerinoni, Morris 195

habitats 228–9, 250, 259

Hahn, Robert 240–43, 248, 249–50 Haiti, 210, 214

Hansen, Robert 233 Hansmann, Henry 129, 195, 196,

199

Hardin, Garrett 54, 225–6, 230, 232–4, 235

criticised 233

see also tragedy of the commons Harris, Steven 281–2

Hart, Oliver 294–5 Hawkins, Sir John 205 Hazell, Peter 61 Heinzerling, Lisa 238 Helper, Hinton Rowan 211 Henry II, King 15

Hess, Charlotte 62

Hester, Gordon 240–43, 248, 249–50 Hill, Peter 112–14, 260

Hirsch, Adam 134, 136 Hirsch, Joel 136 Hirsch, Werner 136

Hodel v Irving (1987) 131

Hohfeld, Wesley Newcomb 230, 238 Holdsworth, William 35 homeowners associations 150–51 Homestead Act (1862) (US) 108, 120 Honduras 195

Honore, Toni 231 Horwitz, Morton 261 Huffman, James 252 Hughes, William 139 Hyde, William 254

imperfect information and transaction costs 168–9

India 53, 57, 60, 68, 193, 217 Indonesia 258

Industrial Revolution 43, 49 information

asymmetric 69, 167, 169, 178, 225–6, 270–72

costs 132, 167, 176, 178, 194 imperfect 168–9, 225–6

injunctions 149, 288

nuisance 161–2, 165, 167, 170–71, 173–4, 177, 178

compensated injunctions 165, 177 Insolvency Regulation (European) 42 Institute for Liberty and Democracy

(Peru) 194–5 institutional costs 170–71, 178

intellectual property 43, 73–4, 112, 121, 129

intermediated securities 43, 44 international law 3

International Paper Company 256 Internet

common-pool resource, as 58, 62 property rights in electronic

information resources 62–3 computer games 41

recordation, and 194, 197 domains, registration of 197

Internet Corporation for Assigned Names and Numbers (ICANN) 197

Introduction to Dutch Jurisprudence

(Grotius) 21 Ireland 135

Islamic societies 217, 218 Italy 19, 66, 198

slavery 204–5, 209 ius publicum 56

J.A Pye (Oxford) Ltd v The United Kingdom [2002] 25

Jackson, Thomas 195–6, 286–7, 290 creditors’ bargain thesis 276–8, 279

Jansen, K. 195

Jensen, Michael 270, 296, 297 Johnson, Alex 132–3 Johnson, S. Lee 248

judges 9–10, 127, 138, 147–8, 178, 199–200, 277, 294, 298

institutional costs 170–71 Justinian 9

Kahl, Matthias 299

Kamien, Morton 251

Kanda, Hideki 276, 280, 282, 287

Kaplan, Steven 294

Kaplow, Louis 167, 168, 169, 170

Kenya 61, 73, 193

Klee, Kenneth 281

Kleppe v New Mexico (1976) 153

Knetsh, J. 174

Komesar, Neil 234

Korngold, Gerald 139, 150, 151

Kraakman, Reinier 129, 195, 196, 199

Krier, James 144, 148, 167

Kripke, Homer 278

Kronman, Anthony 279, 287, 290

Kyoto Protocol 249

Land Registration (1925) (UK) 193 Land Registry Act (1862) (UK) 192 land tenure systems, alienation of

property and 129–33 landlords see leasehold Larson, Bruce 59, 233 Latin America 198 Latin, Howard 239

Law of Property Act (1925) (UK) 17–18, 35, 37, 41, 193

Law Reform Committee (UK) 140 lead in gasoline, trading rights in 248,

249

Leal, Donald 226, 250, 251–2, 254–6, 259–60

leaseholds 17, 37, 132–3, 135–7 environmental goods 238–9 personalty 153

legal history, property rights in 5–30 Canon law 13, 14

codifications 5

Egyptian law see Egypt and Egyptian law

English law see English law European mainland, ownership of

property in 23–4 infringements on absoluteness of

ownership 24–5 infringements on uniformity of

ownership 25–6 see also European law

feudal system 6, 15, 17, 19–20, 22, 24

types of ownership 20–21, 22, 27–8

Germanic law see Germanic law Greek law see under Greece increase in different types of

ownership 28

Index 327

meaning of property rights 5, 27 Mesopotamian codes of law 5, 6–7 natural law 13

influence on property law 20–21 Roman property law see Roman law

and society

resurrection in Europe 18–20 uniform concept of ownership 6

less developed countries see developing countries

Levmore, Saul 276, 280, 282, 287 Lewin, Jeff 164

Libecap, Gary 69, 107, 233, 234, 253, 254, 260

licenses 63, 137, 205, 251 liens 3

litigation costs 119, 184, 186 Locke, John 21, 109

London County Council v Allen (1914) 142

London Times 214

LoPucki, Lynn 281 Louis XVI, King 21–2

low productivity in common property regimes 55

Lueck, Dean 112, 130–31, 259

Maine, Henry Sumner 53

Marckx v Belgium [1974] 25 Margolis, S. 136 Markovits, Richard 136

Maurer, Georg Ludwig von 53 McGee, Robert 250

Meckling, William 270, 296, 297 Melamed, A. Douglas 164–5, 166,

168, 170, 171, 175, 177 Menell, Peter 259

Merrill, Thomas 168, 177–8, 187 Merton, Robert 294 Mesopotamian codes of law 5, 6–7 Meyer, John 212

Miceli, Thomas 196, 199, 200 Michelman, Frank 166, 170, 230 mining 115, 120–21, 127

Modigliani and Miller Theorem 279, 296

monitoring costs 68, 184, 188, 279 Mooney, Charles 281–2

Moore, John 294–5 moral hazard problems 58

328 Property law and economics

Morrison, Edward 292 mortgages 3

Myers, Stuart 271, 298

Napoleon and Napoleonic era 23, 24, 28 National Ambient Air Quality

Standards 240–42, 248 nationalizing natural resources 57 Native Americans

alienation and Reservation lands 130, 132

appropriation of land by colonists 108–9, 120

culture and ownership 132 disease, and 205, 215 enslavement 205

land tenure and productivity 130–31 squatters on frontier land, and 120

natural law see under legal history, property rights in

Nature Conservancy 256 Nelson, Robert 259 nemo dat rule 32

Nepal 57, 62, 193 Netherlands, The 214

law see Dutch law Netting, Robert 64–5

New York Law Society 193 Noll, Roger 234

Norman Conquest 6, 14–15, 16, 35

North Georgia Finishing Inc. v Di-Chem Inc. (1975) 284

nuisance 2, 140, 161–79

alternative approaches to resolution of disputes 174–8

Ellickson on zoning 175–7 Merrill on trespass 177–8

more centralised approaches 175, 178

more decentralised approaches 174–5, 178

comparative nuisance and differing systems 178

definition 24–5, 161

entitlements, determining: ‘coming to the nuisance’ doctrine 172–3

European law 24–5

impact of rules on bargaining outcomes and investment 173–4

internalizing pollution costs 259 law and economics approach to

nuisance law 163–7 Calebresi and Melamed’s

Framework 164–5 Coase 163–4, 165

nuisance as form of externality 163

transaction costs, importance of 166–7

remedy, important factors in determining appropriate 170–72

enforcement 170

entitlement and wealth effects 171–2

institutional costs 170–71 numbers: public v private

nuisances 161, 170 traditional legal approach to

nuisance 161–2 transaction costs, magnitude of,

choice of remedies and 167–9 high transaction costs 167–8 low transaction costs 168–9

numerus clausus 11

decomposition, limiting to efficient level 129

party autonomy in property law 44–5 principle of 2, 32, 44, 46

property rights functioning in 31–2, 33

rule of 31

title recordation, and 199

oceans 250

Atlantic Ocean slave trade 205–6 not yet appropriated asset, as 107,

109

open seas, open access as 56, 225 resources, conserving 250

see also water

oil production 68–9, 109, 114, 116, 228 Olmstead, Frederick Law 211

Olson, Mancur 69

On the Law of War and Peace

(Grotius) 21

open access property regimes see under private and common property rights

open seas see under oceans opportunity 189, 210, 229

original assignment of private property 2, 107–25

first appropriation, auction or contracts 108–14

auction as alternative for first appropriation rule 111–12

claimant homogeneity/ heterogeneity and rent dissipation 110–11, 112, 113, 119

contracts establishing property rights 112–13

first appropriation rule firmly rooted 108–9, 118

resource stock and resource flows possession, distinction between 109–10

rule of first appropriation 108–11

origins and examples of assignment problem 197

possession, definition of as title for initial acquisition 108, 118–21

clarity of signs of possession 118–19

stimulation of heterogeneity among claimants 119–21

rules of capture 114–18 capturing only flows risks open

access dissipation 114–15, 116

common property arrangement and regulations 115–16

intensive and stable group interaction 116–17

maintaining homogenous group membership by equal contingent rules 117

restriction of transfer of right to capture 117–18

Ormet Corporation v Ohio Power

Company (1996) 245

Ostrom, Elinor 2, 57–62, 66–9, 129, 230–31, 233, 257, 260–61

over-fractionalization, 128–9 Ovid 225

ownership see property

Index 329

Palazzolo v Rhode Island (2001) 128 Papinian 10

Pareto improvements 138, 139, 142, 146,

Parisi, Francesco 129 party autonomy 2, 33

Patterson, Orlando 204, 217 Persia 217

Peru 194, 209

Philippines 62

Picker, Randal 278, 280, 285, 295 Pierson v Post (1805) 109, 118, 119 Pigouvean approach 163 Pitchford, Rohan 119, 173–4 Place, Frank 61

pledges 3, 39–40, 46, 47, 49 personalty 153–4

Polinsky, A. Mitchell 166, 168, 169, 171

pollution 115, 161, 175

acid rain program 243–7, 249 Clean Air Act’s sulfur dioxide

allowance trading programme 243–7

criticism of pollution ‘rights’ trading schemes 250

greenhouse gases 249 internalizing costs of, common law

remedies and 259

lead in gasoline, trading rights to use 248, 249

other pollution ‘rights’ trading schemes 247–9

pineland conservation, tradeable development permits for 248

property rights-based environmental regulation, development of 239–43

banking 242–3 bubbles 241–2 netting 240 offsets 241

property rights-based environmental regulation, theory of 3, 236–9

pollution control by rights trading 236–8

tax based pollution control regime 238

Regional Clean Air Incentives Market (RECLAIM) 248

330 Property law and economics

rights trading schemes as method of environmental regulation 249–50

Royal Commission on Environmental Pollution 251

transferable pollution permits as partial privatization 251

water pollution, tradeable rights in 248, 250

see also atmosphere Portugal 198, 205, 208, 214

Posner, Richard 134–5, 152, 168, 170

possession

acquisition, and see under original assignment of private property

based property and title systems, costs compared 195–6

rules 195–6 Powell, R. 193

Prah v Maretti (1982) 227 prescription periods 183, 187–9 Prince Henry the Navigator 205 prior tempore rule 32

private and common property rights 2, 53–106, 230

common-pool resources 57–8, 230 attributes conducive to use of

communal proprietorship 63–9

attributes conducive to use of individual rights 69–71

managing 58–9, 60, 64 property rights relevant to use

59–61 common property

changing from to private property 54

historical 53, 54, 115

land held in commons 115–16, 117–18, 230

open-access regimes, and 55, 56–7, 230

reasons for inefficiency 55 common-property resource 57, 58

flow of resource units and the resource 55, 58–9, 109–10

resource systems and commonproperty regimes 55, 57–8

commons, definition of 230

communal proprietorship and property regimes 63–9 attributes conducive to development 65

performance 67–9 sharing risks 65–6

twenty-first century, in 71–2 confusions generating

misunderstandings 55–9 economic debate over 54–5

private property as essential ingredient in economic development 54

private property rights requiring rules 55

emergence of property systems 107–8

individual rights to withdrawal, management, exclusion, alienation 69–71

legal debate over 53–4 elimination of collective

landholding rights 55 origin of concept of property 53

open access regimes 55, 56–7, 107, 114–15, 116

environmental goods, and see under environmental goods, property rights in

private property, meaning of 54 property as bundles of rights 59–63

alienation, property rights defined as equivalent to 59, 60, 61–2, 66–7

no property-rights regime working equivalently in all settings 61

tenure niches 60

tragedy of the commons see tragedy of the commons

private ownership of environmental goods see free market environmentalists

privatization

conserving and producing environmental goods 256

constitution of 251 costs of 260 Europe, in 258

free market environmentalists, and 251–2

critique of 256–60, 261 government failures managing

public natural resources, solution to 254–6

natural resource holdings not sold 250

partial, transferable pollution permits as 251

roads 260

tragedy of open access, and 232, 233, 235

water, of 70–71

worldwide trend towards 250–51

Problem of Social Cost, The (Coase) 163, 178

Problem of the Commons, The

(Ellickson, Rose and Ackerman) 54

profits/profit a prendre 137, 141 property

assignment of private property see original assignment of private property

decomposition of property rights see decomposition of property rights

private and common rights see private and common property rights

regimes, typology of 229–32 rights, comparative view of see

comparative view of property rights

rights in environmental goods see environmental goods, property rights in

rights in legal history see legal history, property rights in

Prosser, William 163 Prussia 192

public choice 108, 234, 252, 259 Public Choice theory 126, 257, 259

public goods and ownership 58, 229, 230–31, 233–5, 238

economies of scale, and 259 environmental goods, bureaucratic

management and government failure 252–4

justification for public control 253

Index 331

free market environmentalists, and 251–2, 253

government failure in managing public natural resources 254

privatization as solution 254–5 public policies guaranteeing open

access 56

see also bureaucrats; pollution; state publicity, principle of 32, 46–7 ‘Puzzle of the Secured Debt, The’

(Schwartz) 279–80

rangeland grazing management, failures in 228, 254

Rasmussen, Robert 294, 295, 296 Reagan, President

privatization of public lands 257 Reagan/Thatcher economics 250

real covenants 137, 139, 141–7, 148–9

horizontal privity 146–7 intent 142–3

notice 146 termination 147

touch and concern 143–6 vertical privity 147

Reckoning with Slavery (David) 212 recordation of interests see title

systems and recordation of interests

Regional Clean Air Incentives Market (RECLAIM) 248

regulation

categories of 235–6

property rights-based environmental regulation, development of 239–43

banking 242–3 bubbles 241–2 netting 240 offsets 241

property rights-based environmental regulation, theory of 3, 236–9

rights trading schemes as method of environmental regulation 249–50

Reichman, Uriel 143, 144, 148 reliance costs 185

remedies, choice of, transaction costs and 167–9

332 Property law and economics

rent dissipation

common property regimes 55, 115 first appropriations 110–11, 112,

113, 119

rent-seeking behaviour of rulers 55 res nullius 56

Reservation lands see under Native Americans

resource systems see under private and common property rights

Restatement of Torts (1939) (US) 162

Restatement (Second) of Torts (1969) (US) 162

restrictive covenants see equitable servitudes

reverse liability rule 165 riparian rights 115, 118 see also oceans; water

Roe, Mark 291, 294 Roman Empire 3 Roman law and society 5

developments of 8–12 occupation of Britain 9

Roman law 21, 32, 34, 38, 39, 40 absoluteness as fundamental

characteristic of ownership 5, 12, 14, 17, 27

definition of 27

actio as foundation of system 10–11

acquisitive prescription (usucapio) 183

Canon law, and 13 codifications of law 5, 9–10

Corpus Iuris Civilis 5, 6, 9–10, 11, 12, 18–19, 20

divided ownership, concept of 6 dominium 5, 11–12, 19–20, 27

France, in 22 Grotius, and 21

environmental goods, ownership of 225, 228, 235

fall of empire, after 13–14 first appropriation (occupatio)

108–9

Institutes of Justinian 225 ius civile Quiritium (civil code)

12, 27

ius naturale 12

Lex Duodecim Tabularum (Law of

the Twelve Tables) 5, 9, 10 numerus clausus 2, 11 Praetorian ownership 12, 20, 27 property law, growth of 9

title recordation (in iure cessio and mancipatio) 191

treasure trove (thesaurus) 109 Roman political trilogy 8–9

Monarchy 8, 11, 27 Principate 9, 27 Republic 8–9, 11, 27

slavery 11, 203, 204, 207, 208, 211, 212, 213

Romulus Augustus 13 Roquas, E. 195 Rose-Ackerman, Susan 130 Rose, Carol M. 54, 261 Rosenzweig, Michael 295 Rousseau, Jean-Jacques 21

Royal African Company 205, 206 Royal Commission on Environmental

Pollution (UK) 251

Rule against Perpetuities 134, 152 rules and rulers, requirement for property systems of 55

Russia 217

Scandinavia 204

Schlager, Edella 59, 60, 62, 67, 233, 260

Schroder, Robert 248

Schwab, Stewart 167

Schwallie, Daniel 136

Schwartz, Alan 279–82, 287, 295, 298 Scott, James 279

Scott, Robert 277, 280–81, 292 search and verification costs 112, 184,

195–7, 199–200 seas see under oceans

security interests, creditors’ priorities and bankruptcy 3, 270–300

assets and claimant-type based remedies 272–3, 278–83

asset-based security as individual remedy 282–3

inefficient solutions to the puzzle 281–2

legal justification for security 278–9

possible efficient puzzle solutions 280–81

secured debt puzzle 279–80 corporate reorganization and reconfiguring contractual

priorities ex post 274, 290–300 bankruptcy and investment

incentives 296–9 contribution of capital markets

to capital design structure 292–3

nonbankruptcy law’s response to perverse investment incentives 300

nonbankruptcy organizational solutions to structural problem 292

optimal capital structure design 291–2

problem of corporate borrower 290–91

proposals for curing valuation problem 294–6

structures with preplanned liquidations 299–300

valuation problem with bureaucratic solutions 293

debt obligation 3, 270–72

debt enabling creation of credible commitments 271–2

over-investment incentive 270–71, 297–8

subordination of equity 270–71 under-investment risk 271, 298–9

economic justification of creditor priorities 273, 283–90 first-to-perfect priority among

secured creditors 286 liquidation bankruptcy priority

288–90 nonbankruptcy first-in-time

priority 283–6 nonbankruptcy later-in-time

priorities 286–8 individual remedies and collective

proceedings 272, 273–8 collective action problem model

276–8

collective proceedings for heterogenous claims 275–6

Index 333

creation of collective debt 274–5 individual and collective legal

remedies 275 individualistic creation of debt

obligations 273–4 justifying collective bankruptcy

processes 276

systems of debt enforcement 272–3 semi-commons systems 115–16 serfdom 204, 215

servitude, right of 38, 44–5 Shavell, Steven 167, 168, 169, 170 Sherman Anti-trust Act (1890) (US)

56

Shupack, Paul 280

Sickman v United States (1950) 153 Siegan, Bernard 138

Sirmans, C.F. 199, 200

slavery see economics of slavery Slavs 204

Smith, R. 16, 55

Snaidach v Family Finance Corp. (1967) 284

Snyder, C. 173–4

society, private property explaining growth of 54

Solow, Barbara Lewis 135, 262 Somerset case (1772) 217 Soviet Union 218–19

Russia 217

Spain 62, 198, 204–5

slavery 205, 208, 209, 214, 215 species habitat 228–9, 250, 259 specificity, principle of 32, 45–6, 48–9

Spur Industries, Inc v Del. E. Webb Development Co. (1972) 165

stacking 45

Stake, Jeffrey Evans 2, 4, 133–4, 143, 144–5, 148

state

environmental goods, bureaucratic management and government failure 252–4

government failure in managing public natural resources 254

regulation by 236–8, 251

see also bureaucrats; pollution; public goods and ownership

State Utility Forecasting Group 243 Statute of Limitations 183

334 Property law and economics

Statute Quia Emptores (1290) 130 Stewart, Richard 238

Stroup, Richard 251, 253, 254, 255 substitution costs 228

Sudan 66, 206 Switzerland 64–5, 66, 198

Tadman, Michael 207 ‘takings’ doctrine 128 Talley, Eric 168, 169

taxation and fiscal collection 150, 191, 196, 235, 238, 247, 251

tax collectors as creditors 289 tenants see leaseholds technological developments 129

barbed wire, land enclosure and 228, 256

solar power and development 140 telepossession 120

temporal division of land via estate system 133–5

Thailand 57, 70, 193 Thatcher, Margaret 250 timber see forests

Time on the Cross (Fogel and Engerman) 211–12

title insurance 191, 193, 199, 200 title systems and recordation of

interests 2, 32, 47, 138, 191–201 aims 191

definition 191

economic development, critical factor of 194–5

property effects of recordation 194

history 191–3

registration or recording systems 197–201

efficiency of choice between 199–201

recordation only declaratory 197–8

registration constituting valid titles 198

security in transaction: rule of possession or title system 195–7

territorial monopolies 197 verification rules 195–6

types 191–3 Torero, M. 195

Torrens, Robert Richard 193 Torrens system 193, 198 tradeable permits see pollution

tragedy of the commons 54, 115–16, 129, 132, 225–6, 232–4

avoiding 55 , 129, 132, 232, 234–6 environmental goods, and see

environmental goods, property rights in

tragedy of the ‘political commons’ 254

see also private and common property rights

Tragedy of the Commons (Hardin) 54, 232

transaction costs 232 adverse possession 184 asymmetrical 129

common property regimes, and 55, 67 decomposition of property rights

127, 129, 135, 142–3, 145 environmental goods 232, 256, 260 emissions trading programs 250 imperfect information, and 168–9

leaseholds 135–6 nuisance 163–4 , 174

covenants 176

high transaction costs 167–8, 175, 176, 178

imperfect information, and 168–9 importance of 166–7

low transaction costs 168–9, 175, 178

magnitude of, choice of remedies and 167–9

perfect knowledge of damages levels, and 167

original assignment rules, and 107 privatization 260

security interests 272, 276, 289, 292, 295

real covenants 142–3, 145 wild animals 153–4

transparency, principle of 32 treasure trove 109, 119–20 trespass 34, 164, 168, 177–8, 259 Tripp, James 239, 248, 249 trusts see under English law;

decomposition of property rights ; French law; Germanic law