Politics & Property in Natural Resources

68 Pages Posted: 7 Oct 2008  

Andrew P. Morriss

Texas A&M School of Law; PERC - Property and Environment Research Center; George Mason University - Mercatus Center

Date Written: October 6, 2008

Abstract

Modern discussions of natural resources focus on increasing public control over extractive industries proposing measures that range from increasing the public's share of the gain via royalties and taxes to regulating extractive activities to prevent environmental problems to outright expropriation of private investments. This Article argues that such efforts are counterproductive because the fundamental economic problem of natural resources is producing the knowledge necessary to locate and extract resource deposits. The public benefit comes from enabling the use of the resources and the increased economic activity their discovery produces rather than from royalties or expropriation. The key question in designing natural resource laws is thus their effects on the incentive to discover and manage resources. Private property rights in natural resources are the best way to provide such incentives. Fortunately, the combination of property rights and tort law principles (trespass and nuisance) enables property rights to solve environmental problems related to natural resource extraction as well.

Suggested Citation

Morriss, Andrew P., Politics & Property in Natural Resources (October 6, 2008). U Illinois Law & Economics Research Paper No. LE08-011. Available at SSRN: https://ssrn.com/abstract=1279672 or http://dx.doi.org/10.2139/ssrn.1279672

Andrew P. Morriss (Contact Author)

Texas A&M School of Law ( email )

1515 Commerce Street
Fort Worth, TX 76133
United States

PERC - Property and Environment Research Center ( email )

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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