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The Effects of Geography on Property Rights in the Commonos: Theory, Evidence and Implications

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Type: Conference Paper
Author: Araral, Eduardo K.
Conference: 17th Annual Conference of The International Society for New Institutional Economics
Location: Florence, Italy
Conf. Date: June 20-22
Date: 2013
URI: http://hdl.handle.net/10535/9061
Sector: Theory
Region: East Asia
Subject(s): property rights
Abstract: "In the Northern Region of the Philippines can be found at least three different types of property rights in the same production system operated by the same ethnolinguistic group that has survived for long periods of time. To explain this puzzle, I provide a geographic risk model and building on Libecap’s (1989) contracting costs of property rights. I argue that these property systems essentially evolved in equilibrium overtime in response to these geographic risks. I illustrate my model with a comparative study of ancient commons (irrigation) with varied geography and property rights. My findings are consistent with the theoretical expectations. In the mountainous Ifugao region, where there is a need to maintain the ecological integrity of the watershed, the size of rice terraces, and kinship as basis of social order, the primogeniture system of property rights has developed in the last 2000 years. In the 400 year-old Zangjeras, where flooding and droughts require regular mobilization of labor, a unique property system of membership shares -- atar -- has developed. In the Cagayan Valley, where there is little risk of floods and droughts, typical modern private property rights have been adopted. The paper has four implications. First, it suggests that risk analysis should be incorporated into the study of the emergence and evolution of institutions in general and property rights in the commons in particular. Second, it helps explain the causes, consequences, diversity and vulnerability of institutions governing the commons. Third, the emergence, assignment, enforcement and transfer of property rights have important implications for the allocation of resources and the nature of production in the commons. Finally, understanding the effects of geographic risks has important practical implications for climate adaption in the commons and smallholder agriculture in particular."

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