Category: Private Property Rights

The Use and Abuse of the Phrase “Global Public Good”

James Love3 Comments
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Photo by Miroslav Petrasko

A flawed understanding of the concept of “public good” hampers the fight for equitable access to the upcoming COVID-19 vaccine

The term “global public good” has been used in very different ways by policy makers, economists and others. The term “global” is not particularly controversial, and in this context is generally understood to involve cases where the benefits of the service or good impact residents of more than one country, even if not necessarily the whole world. The term “public good” is subject to more diverse uses, often depending upon one’s educational or professional training.

For many people, perhaps most, the term “public good” is loosely defined to include cases where governments are willing to undertake measures to expand access, with universal access at least an aspirational goal. However, among the other influential definitions of “public good” is one that is exceptionally restrictive. A proposal by Paul Samuelson first published in 1954, meant at the time as an extreme and polar case, has found its way into countless articles, textbooks and academic courses, and has parameters that are rarely met in practice. At times, Samuelson’s 66-year-old paper is actually an obstacle to collective efforts to supply and distribute goods that have considerable impact on society.

The COVID-19 pandemic presents an astonishing global challenge regarding the control of the pandemic and the reduction of harm. The health impacts are large, particularly for older patients, and growing unpredictably, and the pandemic has had an enormous social and economic impact on everyone, with no obvious end in sight.Read More »

The Sacrificial Generations of Capitalism

Abel B.S. Gaiya1 Comment

Screenshot 2020-02-11 at 09.28.58In this article I remind readers about the existence of “sacrificial generations” within global capitalist history. By sacrificial generation I mean a group of people at a point in time that experiences suffering with the immanent or intentional effect of changing economic, political or social conditions, which are in turn disproportionately enjoyed by another group of people at a later period in time. I identify four areas in which there systematically exists sacrificial generations:  three stages of capitalist development (state formation, capitalist property rights transition and early industrialization) and a cyclical aspect of capitalism (Polanyian-Marxian cycles). It could also be argued that the future generations which would disproportionately experience the environmental costs of past and present generations’ consumption are “climatic sacrificial generations”, but this will not be explored. Read More »

Property rights and transaction costs in developing countries: A political settlement perspective

abdulrasheednile2 Comments
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Photo by Dennis Jarvis. Louisbourg Lighthouse.

Transaction costs due to distributional conflicts, political settlements, and weak enforcement capacity have important implications for the implementation of property rights in developing countries. While critical analysis of these factors is missing in the mainstream economics approach to property rights, it is obvious that incorporating such analysis will be crucial in designing policies to minimize transaction costs that hinder an efficient functioning of property rights. Specifically, there is a need for an alignment of interests among powerful political and economic interests if property rights are to be more efficient at reducing transaction costs. 

A fundamental limitation of contemporary property rights theory is its inability to incorporate factors that might reduce property rights from solving transaction costs, particularly in developing countries. This piece reviews the mainstream explanation of the relationship between property rights and transaction costs and then evaluates factors that can inhibit property rights from reducing relevant transaction costs, which include distributional conflicts, costly enforcement capacity, political settlement, and measurement problems. Major emphasis is placed on social conflicts and organization of power which are missing from the conventional analysis of property rights.

In this respect, the political settlements framework developed by SOAS economist Mushtaq Khan can enrich our understanding of the operations of property rights in developing countries. Khan (2018) defines political settlements as “social orders characterised by distributions of organizational power that together with specific formal and informal institutions effectively achieve at least the minimum requirements of political and economic sustainability for that society”. In short, political settlement means the distribution of power among different groups.Read More »

“Private Property” and the Dakota Access Pipeline

Chloe SariegoLeave a comment

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Since the announcement of the Dakota Access Pipeline (DAPL) in 2014, which was planned by Energy Transfer Partners for the transport and access of the Bakken oil fields, it has gained traction as a controversial initiative because of its environmental impact, the threat it poses to water supply and its effect on Native American sacred lands. Since August 2016, a group of protestors have been organizing on the Standing Rock Indian Reservation petitioning against the U.S. Army Corps of Engineers and protesting at the actual site of the pipeline (see this New York Times article). While the violence surrounding the pipeline is within itself shocking, the media coverage has been extremely polarized on the issue. Often falling along partisan lines, “liberal” news sources oppose the pipeline on humanitarian grounds and “conservative” sources support it, but both forms of media glean their conclusions about the pipeline from uncritical understandings of the conflict. Both sources ignore that, at the heart of the issue, are issues surrounding what private property is and the consequences of our chosen definition. Instead of taking for granted colloquial definitions of property we can see the underlying distributional inequality inherent to the pipeline by critically assessing how property and law interact.Read More »

Rethinking the Law and Economics Paradigm

mohamedobaidy3 Comments

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‘As a step toward that ideal it seems to me that every lawyer ought to seek an understanding of economics. The present divorce between the schools of political economy and law seems to me an evidence of how much progress in philosophical study still remains to be made. In the present state of political economy indeed, we come again upon history on a larger scale, but there we are called on to consider and weight the ends of legislation, the means of attaining them, and the cost.’ (Oliver Wendell Holmes; 1897) [1]

The World Bank’s policy focus shifted in the 1990s from a market-oriented paradigm to other issues such as social justice, poverty reduction and “market failures”, where institutions had to play a greater role [2]. Known as the Post-Washington Consensus or the Third Moment in Law and Development, this new paradigm emphasizes the importance of “good governance”, the implementation of property rights for economic growth, and makes the following proposition: well-defined and formalized property rights lead to market efficiency, economic growth and development. Hence, since then the establishment of the “rule of law” has become the new goal to reach for developing countries.

However, this Law and Economics paradigm relies on a narrow set of theoretical assumptions and is heavily influenced by neoclassical views of the state, the market and overall competition. But this framework raises some questions: (a) are these assumptions empirically valid, namely is the implementation of property rights a necessary condition for economic growth and development? And (b) are “perfect competition” and “market failures” reliable concepts one should start from to cope with development – if by such term we mean a social and economic process that will ultimately increase human well being?Read More »