Property as an Economic Concept: Reconciling Legal and Economic Conceptions of Property Rights in a Coasean Framework

International Review of Economics, 2012, 59(2), 121-44

34 Pages Posted: 5 Jul 2013

See all articles by Benito Arruñada

Benito Arruñada

Pompeu Fabra University - Department of Economics and Business; Barcelona GSE

Date Written: July 2012

Abstract

Adopting a simplistic view of Coase (1960), most economic analyses of property rights disregard both the key advantage that legal property rights (that is, in rem rights) provide to rightholders in terms of enhanced enforcement, and the difficulties they pose to acquirers in terms of information asymmetry about legal title. Consequently, these analyses tend to overstate the role of “private ordering” and disregard the two key elements of property law: first, the essential conflict between property (that is, in rem) enforcement and transaction costs; and, second, the institutional solutions created to overcome it, mainly contractual registries capable of making truly impersonal (that is, asset-based) trade viable when previous relevant transactions on the same assets are not verifiable by judges. This paper fills this gap by reinterpreting both elements within the Coasean framework and thus redrawing the institutional foundations of both property and corporate contracting.

Keywords: property rights, enforcement, transaction costs, registries, land titling, formalization

JEL Classification: D23, K11, K12, L85, G38, H41, O17, P48

Suggested Citation

Arruñada, Benito, Property as an Economic Concept: Reconciling Legal and Economic Conceptions of Property Rights in a Coasean Framework (July 2012). International Review of Economics, 2012, 59(2), 121-44, Available at SSRN: https://ssrn.com/abstract=2289744

Benito Arruñada (Contact Author)

Pompeu Fabra University - Department of Economics and Business ( email )

Ramon Trias Fargas 25-27
Department of Economics and Business
Barcelona, 08005
Spain
+34 93 542 25 72 (Phone)
+34 93 542 17 46 (Fax)

HOME PAGE: http://www.econ.upf.edu/~arrunada

Barcelona GSE ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

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