De Facto and De Jure Property Rights: Land Settlement and Land Conflict on the Australian, Brazilian and U.S. Frontiers

Abstract

This paper presents a general model of the interaction between settlement and the emergence of de facto property rights on frontiers prior to governments establishing and enforcing de jure property rights. Settlers have an incentive to establish de facto property rights to avoid the dissipation associated with open access conditions. The potential rent associated with more exclusivity drives the ‘demand’ for commons arrangements. As the potential rental stream from land increases due to enhanced scarcity there is a greater demand for more exclusivity beyond what can be sustained with commons arrangements. In some instances claimants will petition the government for de jure property rights to their claims – formal titles. In other instances it may be cheaper to acquire titles through fraudulent means. To the extent that governments supply property rights to those with first possession, land conflict will generally be minimal, though there may be political protests. But, governments face differing political constituencies and may not allocate de jure rights to the current claimants. Moreover, governments may assign de jure rights but not be willing to enforce the rights. This may generate potential or actual conflict over land depending on the violence potentials held by the de facto and de jure land claimants. The authors examine land settlement and land conflict on the frontiers of Australia, the U.S. and Brazil. They are particularly interested in examining the emergence, sustainability, and collapse of commons arrangements in specific historical contexts. Their analysis indicates that the emergence of demand driven de facto property rights arrangements was relatively peaceful in Australia and the U.S. where claimants had reasons to organize collectively. The settlement process in Brazil was more prone to conflict because agriculture required fewer collective activities and as a result claimants resorted to periodic violent self-enforcement. In all three cases the movement from de facto to de jure property rights led to potential or actual conflict because of insufficient government enforcement.