The Problem of Resource Access
Lee Anne Fennell
University of Chicago - Law School
April 15, 2013
Harvard Law Review, Vol. 126, p. 1471, 2013
University of Chicago Institute for Law & Economics Olin Research Paper No. 616
U of Chicago, Public Law Working Paper No. 404
The Coasean insight that transaction costs stand between the world as we know it and an ideal of perfect efficiency has provided generations of law and economics scholars with an analytic north star. But for legal scholars interested in the efficiency implications of property arrangements, transaction costs turn out to constitute an unhelpful category. Transaction costs are related to property rights in unstable and contested ways, and they comprise a heterogeneous set of impediments, not all of which are amenable to cost-effective reduction through law. Treating them as focal confuses the cause of our difficulties in structuring access to resources (positive transaction costs) with the solution to the problem presented by a world featuring scarce resources and positive transaction costs. A broader notion of resource access costs, appropriately subdivided, can correct problems of overinclusion, underinclusion, and insufficient specification in the transaction cost concept. The resulting analytic clarity will allow property theorists to contribute more usefully to solving resource problems.
Note: This paper previously circulated under the title "Resource Access Costs"
Number of Pages in PDF File: 61
Keywords: Coase Theorem, Demsetz, entitlements, property rights, resources, transaction costs
JEL Classification: K10, K11
Date posted: September 30, 2012 ; Last revised: April 18, 2014