On the Redistributive Impact of Privatizing a Resource Under Imperfect Enforcement

22 Pages Posted: 23 Dec 2003

See all articles by Louis Hotte

Louis Hotte

University of Ottawa

Stefan Ambec

National Institute for Agricultural Research (INRA) - GAEL

Date Written: May 2003

Abstract

We consider the redistributive effects of privatizing a resource previously exploited under free access. We assume that illegal extraction is punished but that the sanction is bounded by individual's wealth. First, we show that a segment of intermediate-wealth individuals is the most adversely affected from the regime change, while the poorest segment is not only less severely affected, but may actually gain from it. Next, we show how the authorities may prefer to choose an intermediate enforcement level in order to maximizes the political acceptability of the regime switch among the local community.

Keywords: Property rights, enforcement, wealth distribution, natural resources, illegal extraction

JEL Classification: D78, K42, O13, O17, Q21

Suggested Citation

Hotte, Louis and Ambec, Stefan, On the Redistributive Impact of Privatizing a Resource Under Imperfect Enforcement (May 2003). Available at SSRN: https://ssrn.com/abstract=453940 or http://dx.doi.org/10.2139/ssrn.453940

Louis Hotte (Contact Author)

University of Ottawa ( email )

Department of Economics
55 Laurier E.
Ottawa, Ontario K1N 6N5
Canada
+161 356 25800 1692 (Phone)
+161 356 25999 (Fax)

HOME PAGE: http://aix1.uottawa.ca/~lhott3/

Stefan Ambec

National Institute for Agricultural Research (INRA) - GAEL ( email )

BP 47
38040 Grenoble
France

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