Formal Property Rights Research Articles

The capitalization of property rights to groundwater

AbstractThere is limited empirical evidence on the value of formal property rights to natural resources when they are not transferable, and there is regulatory uncertainty about enforcement. This paper takes a hedonic approach to understanding how three core features of groundwater property rights—access, allocation, and seniority—are capitalized into agricultural land values in the High Plains Aquifer region of Kansas. We find that groundwater access rights confer an average land value premium of 71%, or $1445/acre in 2019 dollars. Water rights having larger allocations and more seniority are more highly valued in the land market. The seniority effect is small but is consistent with more junior rights facing greater regulatory risk of curtailment. Taken together, these results suggest that the land market capitalizes constraints to groundwater pumping provided by groundwater property rights. We use our empirical estimates to quantify the distributional costs of modifying existing patterns of pumping, a common challenge of groundwater management organizations seeking to improve the sustainability of extraction.

Unbundling tenure security and demand for property rights: Evidence from urban Tanzania

Rapid urbanisation in sub-Saharan Africa occurs with little land registration, and government-led regularisation schemes often find limited uptake of title deeds by residents. In theory, there could be private and public benefits from land titling in cities. However, little is known about how landholders value the various dimensions of formal property rights in comparison to informal tenure. We address these questions by unbundling property rights into multiple functions of tenure security and by adopting an innovative combination of methods, including an incentivised willingness-to-pay exercise, a survey, and in-depth interviews conducted in Dar es Salaam, Tanzania. Examining how landholders perceive dimensions of tenure advances our understanding of limited land formalisation in urban Africa and provides evidence for alternative policy approaches to address local demand for tenure security more effectively.

Strangers’ property

Abstract Why are impartial institutions such as formalized property rights so important for the emergence of impersonal trade? Previous literature has stressed the role of such institutions in providing third-party enforcement to shield strangers from locals’ opportunism. We document the existence of a second mechanism based on the role of formalized property rights in inducing respect for the property of strangers, regardless of enforcement. Ten years after the randomized introduction of formal property rights across rural Benin, we conducted a taking-dictator-game experiment in which participants could appropriate the endowment of an anonymous stranger from a different village. Even if enforcement institutions are absent and peer effects are silenced by design, participants from villages where the reform was implemented took significantly less than those in control villages. We further give consideration to several possible transmission channels and discuss their plausibility (JEL: D02, D91, K11, K42).

Collective forest land rights facilitate cooperative behavior

AbstractThe introduction of formal collective property rights to forest lands appears to have improved both environmental and economic outcomes, but there is limited evidence on how these reforms affect cooperative behavior among local resource users. We propose that when national governments issue collective land rights, they strengthen the collective psychological ownership among coowners and produce increased levels of cooperative behavior. Analyzing data from 213 forest user groups in 10 countries, and a framed field experiment in a subset of sites, we find that collective land titling is associated with significantly higher levels of cooperative behavior including increased levels of trust, more frequent interpersonal interactions related to both forestry and nonforestry activities, more self‐governing institutions, and greater equality in resource extraction patterns.

Self-employment, corruption, and property rights: a comparative analysis of European and CEE economies

This study analyzes the relationship between self-employment, corruption, and property rights in 30 European countries, including 11 Central and Eastern Europe (CEE) economies, across the two decades of 1996–2016. In general, relatively little research has focused on the relationship between entrepreneurship and the protection of property rights. Furthermore, past findings show that corruption may have both negative and positive effects on the level of entrepreneurial activity, either “greasing” or “sanding” the wheels for entrepreneurship. Overall, research on how the informal institution corruption and the formal institution property rights are linked to entrepreneurship in post-socialist/transition economies has been limited. We find that stronger protection of property rights increases self-employment ratios, both in Europe in general and in CEE economies. The relationship between self-employment and the control of corruption is not significant. We conclude that neither higher nor lower levels of corruption control affect the share of self-employment. In comparative perspective, the ratio of self-employment in the group of CEE economies does not respond differently to these two key institutions.

Cyclical IPR-public Grant Engine Driving R&D Innovation in Small Research-intensive Private Enterprises

A reciprocal relationship has been documented between registering formal intellectual property rights (IPR), obtaining public grants, and undertaking publicly subsidised R&D innovation projects. Focusing on SMEs as key beneficiaries of such grants, this paper provides an original conceptual framework to rationalise this relationship based on the core criteria to obtain and successfully exploit both grants and formal IPR. R&D innovation grants from several European countries display common elements conducive to securing formal IPR status. Novel observations of several European SMEs demonstrate an innovation engine cycling between formal IPR management and publicly subsidised R&D innovation, sometimes for multiple cycles over several years. This was seen for varying grant sizes, technological sectors, and geographical locations. The framework and observations presented herein are of potential interest to research-intensive SMEs, public grant bodies, and professional service providers for public subsidies and IPR management.

CSR AND PERFORMANCE: TWO SUBSTITUTABLE CONCEPTS FOR MEASURING ORGANIZATIONAL REALITIES: A THEORETICAL APPROACH

The objective of this article is to study the contribution of CSR in relation to the neighbouring but much older concept of performance. The emergence of CSR embodies an evolution of the company whose borders are becoming increasingly permeable and evolving. The firmÂ’s conception based on the existence of formal property rights is thus undermined by the existence of cooperation strategies, alliances, the use of outsourcing, and more generally by an increasing interdependence with all its stakeholders. The main consequence of this development is the extension of the scope of the companyÂ’s responsibility, including legal responsibility, to all the companyÂ’s stakeholders, thus influencing the notion of performance. - The first part of this paper presents in a synthetic way the concept of CSR and in particular its foundations and its variations. - The second part brings together the concepts of performance and CSR, highlighting their convergences and oppositions. Even if these two concepts diverge theoretically, their purposes being different, the tools for measuring performance and the degree of consideration of the social responsibility of firms seem quite similar.

Intellectual Property Rights in China-A Literature Review on the Public's Perspective.

Despite significant advances in terms of the adoption of formal Intellectual Property Rights (IPR) protection, enforcement of and compliance with IPR regulations remains a contested issue in one of the world's major contemporary economies—China. The present review seeks to offer insights into possible reasons for this discrepancy as well as possible paths of future development by reviewing prior literature on IPR in China. Specifically, it focuses on the public's perspective, which is a crucial determinant of the effectiveness of any IPR regime. It uncovers possible differences with public perspectives in other countries and points to mechanisms (e.g., political, economic, cultural, and institutional) that may foster transitions over time in both formal IPR regulation and in the public perception of and compliance with IPR in China. On this basis, the review advances suggestions for future research in order to improve scholars' understanding of the public's perspective of IPR in China, its antecedents and implications.

Titling and beyond: Evidence from Dar es Salaam, Tanzania

Land titling has been a policy priority for developing country cities for decades. In Sub-Saharan Africa and across the world, tenure formalization has been promoted as a tool to improve the quality and value of urban housing. The track record of these projects, however, has generally been disappointing. Why is this? In this paper, we argue that project design has paid too little attention to contextual features of land markets in estimating the benefits of formalization to individual households. We draw on evidence from a case study city – Dar es Salaam, Tanzania – to show that in cities where broader property rights institutions are incomplete and informal sources of tenure security are strong, formal property rights may not be valued by households. This raises questions about the households’ willingness to pay for regularisation and suggests that complementary strategies to build trust in government and consolidate public benefits of titling will be needed to ensure that projects have a beneficial impact. • This paper examines the individual benefits of titling in urban areas. • It examines the theoretical case for titling and probes the validity of these expectations in a case study city. • Results reveal that the quality of formal and informal housing is similar and there is no market premium for formal documentation. • This likely reflects low trust in formal administration as well as strong informal arrangements. • The findings indicate that project design may benefit from reorientation towards the public benefits of titling.

Prohibited commoning

Oddly, criminal prohibition can lead to “commoning,” when individuals, left unprotected by state and formal property rights, innovate collective systems to access, use, and benefit from illegalized resources. “Legalization” entails the conversion of these prohibited commons to legal property systems, bringing new freedoms and liberties as well as the dispossession of collectively generated assets (material, relational, and otherwise). This paradox of legalization is currently playing out among U.S. states moving to legalize cannabis. Motivated by the failures of cannabis prohibition and its grievous harms, the question looms: How will states and markets grapple with the collectively generated assets and relational systems generated under prohibition? Building from ethnographic research and survey data, this article argues for recognition of the commoning practices that produced the resources upon which the legal market is based. These practices illuminate ways that legalization may deliver not only markets and regulation but also emancipatory justice in the wake of the War on Drugs. First, we document the commoning practices of cannabis cultivators, the collective benefits they generated under prohibition, and how legalization is affecting these practices and dynamics. Second, we explore strategies, like allotment and pricing systems, that build from prohibited commoning practices to achieve greater collective benefits and the emancipatory potential of legalization.

Trade and Resource Sustainability with Asset Markets

Trade changes incentives to protect an open-access natural resource independently of its effect on the resource price. General equilibrium linkages cause resource policy to affect the price of privately owned assets regardless of whether they are used in the resource sector. In the closed economy, the asset market in our overlapping generations setting creates incentives for currently living agents to protect the natural resource. The interplay of the asset market and general equilibrium effects causes trade to reverse these incentives. Trade liberalization and the establishment of formal property rights are policy complements: the former makes the latter more important.

How FDI inflows to emerging markets are influenced by country regulatory factors? (WITHDRAWN)

Foreign Direct Investment (FDI) inflows to emerging nations exhibit a big variation. To what extent do host-country regulatory and institutional variables attract or repel FDI? We integrate various theoretical perspectives: transaction cost economics, global value chain analysis and liability of foreignness to examine the impact of formal regulations, rule-of-law, property rights, procedural bottlenecks and infrastructure on the attractiveness of an emerging market for the period 2004 to 2016. We seek to identify which of the many regulatory variables most influence the FDI decision. We find that countries with more efficient start-up regulations, stronger protection of minority investment, and better procedures and infrastructure for international trade across their borders attract more FDI. These results have important implications for policy reform in emerging markets, as well as for multinationals selecting which nations to invest in.

How does gender affect the perceived security of land and property rights? Evidence from 33 countries

Secure tenure over women’s land and property rights is increasingly considered an important means to promote economic, social and even environmental outcomes. Where gender-unequal tenure security exists, promoting women’s land and property rights is therefore a key component of SDGs 1.4.2 and 5.a.1, which call for gender-equal access and security of resources, including housing and land. Both development goals acknowledge that measuring men and women’s self-perceived tenure security is an important way of monitoring progress, but until recently there has been a lack of consistent and comparative global data on this front. In this paper, we analyse the perception data of 28,132 women and 25,048 men in 33 countries to assess potential gender imbalances. We find that overall, men and women’s perceived tenure security does not differ significantly. However, significant in-country differences exist that can in part be explained by gender-differentiated sources of insecurity. Women are more likely to feel threatened by internal sources of insecurity from within the family or the community, particularly when faced with scenarios of divorce or spousal death over the long-term expected duration of their tenure. Men, in turn, are significantly more likely to cite external sources of insecurity such as government expropriation or private investment in the near- or middle-term. Furthermore, the results of our models suggest that the possession of (named) formal property rights documentation may be effective in protecting both men and women from external threats, but not internal ones. Formalisation of property rights therefore needs to be complemented with measures that tackle the day-to-day denial of women’s rights within families, communities and societies.

Consensual Unions, Property Rights, and Patrimonial Violence against Women in Latin America

Abstract Consensual unions in Latin America are becoming more common than marriages. We analyze the evolution of the laws recognizing consensual unions as well as those proscribing domestic violence, including patrimonial violence, for nineteen countries. While the formal property rights of married women and those in consensual unions are now similar, we show that the latter are in a more precarious position, experiencing higher incidences of intimate partner violence. In Colombia and Ecuador, the women in consensual unions also experience higher rates of economic and patrimonial violence. Drawing on qualitative research, we also explore the barriers to women in consensual unions exercising their property rights.

Cross-sectoral externalities related to natural resources and ecosystem services

Standard approaches to environmental and natural resource use externalities generally focus on single-sector resources and user groups. Remedies include Pigouvian-style government constraints, small group controls following Elinor Ostrom, or less frequently, bargaining across users as outlined by Ronald Coase. However, many difficult natural resource management problems involve competing uses of the same resource or multiple interdependent resources, across multiple, heterogeneous sectors. Cross-sectoral externalities are generated and impede attainment of conservation objectives. The multiplicity of resources and stakeholders, who may have different property rights, hold different use or non-use values, have different traditions, or fall under different regulatory regimes, increases the likelihood of multi-jurisdictional conflicts. We provide an institutional analysis following Oliver Williamson's four-levels of institutions (social embeddedness, institutional environment, governance, resource allocation) to illustrate the sources of potential conflict, the costs of addressing them, and the potentials for exchange. In comparing the costs of alternative approaches, we include transaction costs associated property rights; the costs of lobbying, implementing, and enforcing government regulation; and the costs of scaling up from small-group controls when resource problems involve multiple sectors and heterogeneous populations. In our illustrative case examples, instruments that are not formal property rights are exchanged at lower transaction costs. We close by discussing how Coasean, Pareto-improving voluntary exchange agreements may be lower cost, more effective, and more durable solutions than alternative management regimes to mitigate cross-sectoral externalities.

How FDI Inflows to Emerging Markets Are Influenced by Country Regulatory Factors: An Exploratory Study

Abstract Foreign Direct Investment (FDI) inflows to emerging nations exhibit a big variation. To what extent do host-country regulatory and institutional variables attract or repel FDI? We integrate various theoretical perspectives: transaction cost economics, global value chain analysis and liability of foreignness to examine the impact of formal regulations, rule-of-law, property rights, procedural bottlenecks and infrastructure on the attractiveness of an emerging market over a 12 year period. We seek to identify which of the many regulatory variables most influence the FDI decision. We find that countries with more efficient start-up regulations, stronger protection of minority investment, and better procedures and infrastructure for international trade across their borders attract more FDI. These results have important implications for government policy reform in emerging markets, as well as for multinationals selecting which nations to invest in.

Influence of property rights on performance of community-based forest devolution policies in Honduras

Devolution refers to shifting responsibility of forest management to community organizations, in contrast to public decentralization to local state institutions. Research on community forestry policies can aid in determining how property rights affect local governance structures. The objective of this paper is to analyze the influence of property rights on the application of devolution policies related to community-based forestry. The study included four sites in non-indigenous Honduras where forestry cooperatives were operating. Common property theory was used to interpret data gathered via value chain and sustainable livelihoods approaches. Results show that historical policy changes regarding land tenure recognition have affected community-based forestry initiatives. Recent policies have focused on the promotion of community-based forestry, which has resulted in an expansion in the area of devolved land. Nonetheless, de facto land tenure arrangements continue despite formal assignment of land. It was also found that these initiatives have been developed in areas where agricultural activities are less important. Strategies for inclusion of communities in forest management should not be based solely on the recognition of formal property rights. De facto ownership should also be considered when it is respected among local residents, as part of a local governance approach to forest management.

Institutional form versus function in a common property context: The credibility thesis tested through an agent-based model

A key debate in the study on land, housing and natural resources revolves around the notion that general institutional forms (such as private, common, public, and likewise formal property rights) lead to a certain institutional performance (as may be expressed in terms of prices, transaction costs or sustainability). However, a modest, yet, growing stream in institutional analysis aims to move away from ‘merely describing the characteristics’ of institutions (i.e., form variables) to ‘performance or quality measures’ (i.e., function variables). Following this line of argument, the credibility thesis as put forward in this journal (Ho, 2014) postulates that the form of institutions is unrelated to their performance, and institutions are unintentional outcomes rather than designed artefacts. The primary goal of this research is to ascertain whether this dual prediction could be observed in a simulation model that is driven by agent behaviour and interaction, resulting in emerging institutions. We devise an empirically verified agent-based model within a classical thought experiment on a common property resource to validate the thesis’ predictions. First, our model confirms that different forms of institutions can have a similar performance. Second, we ascertain that successful institutions in difficult management situations can emerge (rather than being designed) that are beneficial for the sustainability of the common resource and the appropriators of that resource.

Cross-Sectoral Externalities Related to Natural Resources and Ecosystem Services

Standard approaches to environmental and natural resource use externalities generally focus on single-sector resources and user groups. Remedies include Pigouvian-style government constraints, small group controls following Elinor Ostrom, or less frequently, bargaining across users as outlined by Ronald Coase. However, many difficult natural resource management problems involve competing uses of the same resource or multiple interdependent resources, across multiple, heterogeneous sectors. Cross-sectoral externalities are generated and impede attainment of conservation objectives. The multiplicity of resources and stakeholders, who may have different property rights, hold different use or non-use values, have different traditions, or fall under different regulatory regimes, increases the likelihood of multi-jurisdictional conflicts. We provide an institutional analysis following Oliver Williamson’s four-levels of institutions (social embeddedness, institutional environment, governance, resource allocation) to illustrate the sources of potential conflict, the costs of addressing them, and the potentials for exchange. In comparing the costs of alternative approaches, we include transaction costs associated with property rights; the costs of lobbying, implementing, and enforcing government regulation; and the costs of scaling up from small-group controls when resource problems involve multiple sectors and heterogeneous populations. In our illustrative case examples, instruments that are not formal property rights are exchanged at lower transaction costs. We close by discussing how Coasean, Pareto-improving voluntary exchange agreements may be lower cost, more effective, and more durable solutions than alternative management regimes to mitigate cross-sectoral externalities.

Unraveling the self-made city: The spatial impact of informal real estate markets in informal settlements

Informal real estate markets have developed as a result of deficiencies of formal real estate markets and play a crucial role in providing housing to the urban poor. This contribution combines an adaptation of Ostrom's rules with property rights theory to study the rules that have developed in the informal real estate, their spatial impact and implications of formal-informal interactions in an informal settlement in Nairobi, Kenya. It is argued that although the nature of formal and informal property rights regimes is highly similar, conflicts arise when the two concur as they are based on different forms of legitimacy: input and output legitimacy. To the formal market, the informal market is illegitimate as it infringes on formal property rights and planning regulations, whereas to the informal market, the formal market is illegitimate due to its excluding nature. The research opts for further research in the discipline of spatial planning in order to gain a better understanding of formal-informal interactions.