Property Rights Flashcards
De jure
Rights granted by the state
De facto
Customary law
Property right
Gives ownership of resource
Rule of first possession
Absent of formalized property rights, the first person to get to the resource gets to have it
Usufruct right
Use right
A use right can pertain to:
- Utilization of a resource
- Access to the resource
Main characteristics of property rights
- Universality
- Exclusivity
- Durability
- Transferability
- Divisibility
- Security
Universality
The right encompasses all assets being either privately or collectively owned. All entitlements are specified & enforced. (Increases economic efficiency & conservation)
Exclusivity
All benefits and costs of resource use accrue to the owner (Increases economic efficiency & conservation)
Durability
Length of the entitlement (increases economic efficiency & conservation)
Transferability
Resource is transferable from one owner to another in voluntary exchange (Increases economic efficiency, increase OR decrease conservation)
Divisibility
Ability of owner to divide up asset or flow of benefits from the asset (Increases economic efficiency, increases OR decreases conservation)
Security
Property rights secure from seizure or encroachment by others (Increases economic efficiency, increases OR decreases conservation)
Types of property rights
- Private
- State
- Common
- Hybrid
- Open access
Incentives from private property right
Strong incentive for conservation & investment
Incentives for state property
Encourages reduction/ limitation of individual rights, managers have incentives for personal gain
Incentives from common property
Free riding problem, low incentives for conservation
Incentives from open access
Lack of incentives to conserve, can lead to resource degradation
Exclusivity continuum
Increasing exclusive use, increasing #s excluded:
Open access, state property, common property, private property
Regulated common property
-Group must control access to the resource & it’s use by group members.
-implies rules can be effectively inforced
-can give same economic efficiency as private property
Unregulated common property
-access rules exist, but no rules of membership or use
-leads to economic inefficiency
Types of fishing rights
- Limited entry
- Fishing cooperative
- TURFS
- ITQs
- ITEs
- Community quotas
- State property
- High seas
Limited entry
Limit access to resource stock for specific # of users who hold license or permit
-it is a right to access
-weak right because:
Only right to access fish stock not specific # of fish & weak incentives for optimal resource use
Fishing cooperatives
Decentralized group management that allocates use right among fishers in cooperative
-typically a form of Total allowable catch (TAC) that is shared among members
-strength of incentives for optimal use dependent on strength of agreement
Territorial use right (TURF)
Fishing rights granted to local community or group, allowing them to manage/ utilize resource.
-optimum use dependent on structure of agreement
-internalizes externality in the area, but fish may be transboundary
Individual transferable quotas (ITQs)
Provides fisher right to harvest defined portion of TAC within time period
-form of private use right, state owned resource stock
property of fish only passes to fisher from rule of first possession
- very strong incentives for optimum resource use
Individual transferable effort (ITE)
Use right for amount of fishing effort (days at sea, # of gear = input quota)
-state has property right of stock
-weaker incentives for optimum use then output quotas
Community quotas
Exclusive fishing rights given to well defined communities/ groups (not individuals) & community decides how to fish their share
-state has property right of stock
-right can be defined as share of TAC, Geographic area, or effort
-common use right
State property right
State property right up to 12nm, then EEZ from 12 to 200 nm not a property right
High seas property rights
Beyond 200 nm, open access
international common property is emerging for transboundary resources (RFMOs, Law of the sea, UN straddling stocks agreement etc)
Economic rent
Revenue minus costs of turning natural resource into a good
Normal profit
Opportunity cost of fishers profit in next best alternative
Opportunity cost
Cost of not doing the next best alternative
