Property and Local Knowledge
43 Pages Posted: 23 Apr 2020 Last revised: 30 Jul 2020
Date Written: April 21, 2020
Property rights play an important but largely under-appreciated role in channeling local knowledge into decisions about physical resources. Property devolves decision-making authority to a dispersed pool of owners, who are likely to be aware of local conditions relevant to their resource. As a result, property owners are often in a position to make better-informed decisions about the use of the resource than other parties. The homeowner who preemptively repairs an old roof, the retailer who offers a new product for sale, and the farmer who decides to switch crops are all decision-makers who are empowered through property rights to act on local knowledge that no one else may have. This article seeks to explain the local knowledge function of property rights, beginning with how arguments from local knowledge can help justify the pervasive institution of private property. The article then goes on to consider how the knowledge function of property can explain some of the fundamental features of property law. In particular, this theory helps explain owners’ agenda-setting authority, the central place of possession in property law, as well as doctrines that restrict the ongoing control of past owners.
Keywords: Property Law, Legal Theory, Ownership
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