Property Rights and the Dynamics of North-South Trade

Abstract

This chapter focuses on how the lack of property rights in North-South trade of primary resources can distort trade and threaten the sustainability of development. This issue is examined within a two-region world economy where one region, the North, represents the industrial countries, and the other, the South, the developing countries. The lack of property rights characterizes a class of environmental problems arising from the use of renewable resources as inputs in the production of traded goods. Typical examples are rain forests used for timber, or destroyed to give way to the production of cash crops such as coffee, sugar, and palm oil. In many developing countries, these resources are extracted from unregulated common property sources; and that ownership is shared with future generations. Focus is placed on renewable resources because it CBR be argued that sustainable development is all about the proper management of the world`s renewable resources. The atmosphere can be Considered a renewable or self-regenerating resource, as are bodies of water, forests, fisheries, and biodiversity in general. To a great extent, the Global environment is described by the dynamics of the productive use of the earth's renewable resources.