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Abstract:
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"The evolution of property rights in the economic literature is alternatively viewed as inexorable tragedy or 'best of all possible worlds.' In his classic article, Garrett Hardin (1968) has been characterized as asserting that without coercive action - either 'enclosing' private property or providing central government direction - land and other resources will be much abused. Demsetz (1967), on the other hand, presents the more sanguine possibility that private property will indeed arise, spontaneously or otherwise, when the benefits outweigh the costs. Both Hardin and Demsetz fail to articulate the possibility that small groups may agree to an efficient management regime, without either central government or the institution of private property. Moreover, the disagreement between these two positions helps to underscore the ambiguity regarding the source of institutional change.
"In this paper, I attempt to outline a fundamental theory of the evolution of property rights in land. Unlike Demsetz and Hardin, common property resources are not prejudged as being inefficient. Different property rights regimes are assumed to be appropriate for different environmental conditions. In addition, the intention is to describe how an evolution of property rights could have proceeded as a spontaneous order."
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