International Trade with Endogenous Enforcement of Property Rights
Posted: 8 Feb 2001
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.
JEL Classification: O13, Q15, O19
Suggested Citation: Suggested Citation