Endogenous Changes in Property Rights Regime

Endogenous Changes in Property Rights Regime
Author: Daniel Leonard
Publisher:
Total Pages: 0
Release: 2012
Genre:
ISBN:

The purpose of this article is to present a model of the endogenous evolution of a society's property rights regime. We use an overlapping-generations framework in which capital accumulation takes place. Property rights enforcement is costly. Individuals decide collectively in each period the appropriate level of enforcement and pay taxes to finance it. Poor households have less interest in the enforcement of property rights than rich households. We also consider heterogenous households with different tastes. They differ on their choice of law enforcement. As their wealth and numbers evolve, political power may change sides, hence the property rights regime also evolves.

International Trade with Endogenous Enforcement of Property Rights

International Trade with Endogenous Enforcement of Property Rights
Author: Louis Hotte
Publisher:
Total Pages: 0
Release: 2001
Genre:
ISBN:

We model the endogenous evolution of the de facto property rights regime and explore the impact of trade on de facto property rights regimes and on welfare. The model takes into account the dynamics of the stocks of natural resources, and the effect of trade on resource utilization. We show that the opening of trade can change the de facto property rights regime of an economy. Such changes may lead to a greater stock of resource, but are not always beneficial to society due to the enforcement costs. Thus, the opening of trade can be harmful.

Endogenous Property Rights Regimes, Common Pool Resources and Trade

Endogenous Property Rights Regimes, Common Pool Resources and Trade
Author: Gregmar I. Galinato
Publisher:
Total Pages: 0
Release: 2008
Genre:
ISBN:

This paper analyzes the impact of trade on resource stocks through endogenously selected property rights regimes. We present a model that shows welfare can be maximized when a community degrades its resource stock under optimally selected property rights regimes after opening to trade. Results from a laboratory experiment show that labor allocations, property rights regimes and resource stock levels do not follow the optimal dynamic Nash equilibrium path. Instead a non-optimal dynamic equilibrium path is selected due to incorrect initial labor allocation and property rights regime choices.

Economic Growth and Decline with Endogenous Property Rights

Economic Growth and Decline with Endogenous Property Rights
Author: Aaron Tornell
Publisher:
Total Pages: 45
Release: 2002
Genre:
ISBN:

This paper introduces endogenous property rights into a neoclassical growth model. 1t identifies a mechanism that generates growth rates which are increasing at low levels of capital. and decreasing at high levels of capital. The driving force behind changes in property rights is the attempt of each rent-seeking group to secure exclusive access to a greater share of capital by excluding others. We characterize an equilibrium in which there is a shift from common to private property, followed by a switch back to common property.

Endogenous Innovation

Endogenous Innovation
Author: Cristiano Antonelli
Publisher: Edward Elgar Publishing
Total Pages: 304
Release:
Genre: Business & Economics
ISBN: 178254514X

This ground-breaking new book builds upon the Schumpeterian creative response. The author shows that firms, in out-of-equilibrium conditions, try and react by means of introducing innovations. The success of their reaction is contingent upon their access conditions to knowledge, which are shaped by the system in which they operate. The emergence of new innovations can, in turn, knock firms further out-of-equilibrium and cause changes in the system properties that govern their access to external knowledge. This path dependent loop of interactions between the system properties and the individual actions of firms, accounts for endogenous innovation and the dynamics of the system.

Essays on Endogenous Property Rights

Essays on Endogenous Property Rights
Author: Jan U. Auerbach
Publisher:
Total Pages: 164
Release: 2014
Genre: Electronic dissertations
ISBN:

This dissertation studies societies' choices of property rights regimes in an environment in which heterogeneous agents can choose to appropriate others' resources. It is organized in three essays that consider the same underlying economy. In the first essay, I analyze an economic mechanism that captures the idea that competition in the political arena helps good economic outcomes. I show that two societies with the same productivity distribution and the same office holder, but electoral runners-up with different productivity, face different alternatives and choose different levels of enforcement. Moreover, easier access to the political arena for more people increases the likelihood of better outcomes while extending the franchise alone does not. In the second essay, I focus on one potential reason for why a society might implement an allocation that allows for appropriation to occur--while the first best outcome does not. The planner cannot verify taxable income but can only inflict a cost on agents who are hiding resources from taxation. I show that, while this friction imposes a binding and effective constraint on the planner's choices, it does not prevent him from implementing an outcome in which appropriation is absent and property rights are perfectly secure. The results emphasize the importance of frictions in the political arena for imperfectly secure property rights. In the third essay, ignoring efficiency per se, I describe an incentive for a governing authority to crowd out appropriation activities altogether. This incentive is present whenever the size of the pie that can be shared among members of society enters the trade-off facing the authority, independent of the political environment the authority finds itself in. Therefore, other competing incentives must affect the society's decision making process to generate imperfectly secure rights to property.

Endogenous Property Rights

Endogenous Property Rights
Author: Daniel Diermeier
Publisher:
Total Pages:
Release: 2013
Genre: Economics
ISBN:

It is often argued that additional checks and balances provide economic agents with better protection from expropriation of their wealth or productive capital. We demonstrate that in a dynamic political economy model this intuition may be flawed. Surprisingly, increasing the number of veto players or the majority requirement for redistribution may reduce property right protection on the equilibrium path. The reason is the existence of two distinct mechanisms of property rights protection. One are formal constraints that allow individuals or groups to block any redistribution which is not in their favor. The other occurs in equilibrium where agents without such powers protect each other from redistribution. Players without formal blocking power anticipate that the expropriation of other similar players will ultimately hurt them and thus combine their influence to prevent redistributions. Yet, such incentives can be undermined by adding formal constraints. The flip-side of this effect is that individual investment efforts might require coordination. The model also predicts that the distribution of wealth in societies with weaker formal institutions (smaller supermajority requirements) among players without veto power will tend to be more homogenous.