‘Unclear’ initial delineation of property boundaries and the third Coase Theorem

This interdisciplinary study, which references previous research on the evolution of land law and real world examples of land market operating with unclear property boundaries, demonstrates that Ronald Coase’s argument that delimitation of property rights is a prelude to market transaction applies to urban development, in which certitude in initial property boundaries in geodetic terms is not overriding. It explains why even a powerful landlord can be unsure of and do not even want to know the boundaries of the land of his/her tenants and why this mapping limitation in itself does not inhibit market transactions. When land is treated as an input for a chattel that is no longer fixed to land, area measurement is more important than boundary-fixing. When land becomes valued for its location and fixtures (i.e., as real estate), precise boundary delineations and disputes over the precision of cadastral surveys emerge. Boundary disputes are a particularly painful form of litigation. Feelings run high and disproportionate amounts of money are spent. Claims to small and valueless pieces of land are pressed with the zeal of Fortinbras’ army (Lord Hoffman in Wibberley v. Insley [1999] HL15).preprin

The Rise and Fall of the Sand Monopoly Colonial Hong Kong

A state monopoly over a scarce natural resource under open access can theoretically reduce the costs of supply by constraining rent dissipation and innovations. A monopoly over the collection and trading of sand was formed in Hong Kong by legislation in 1935 in the wake of disputes between sandmen and villagers and imminent shortages of sand. Arguably, a monopoly at this stage of Hong Kong's development was a better alternative to merely defining rights over sand extraction in terms of the transaction costs of enforcement. During the 1950s and 1960s, when Hong Kong's economy and construction industry began to boom, the monopoly's existence was further justified due to the politics of China being the sole source of Hong Kong's sand supply. However, this case study of the sand monopoly and its post-war operation as a bilateral monopoly shows that it did not protect coastal villagers, as violations of the sand law were not infrequent. The local sand supply was huge, and the monopoly's abolition in 1981 was followed by a long period of falling, rather than rising, real wholesale prices of the resource. Nor was there any sign of scale economies, as claimed by the government. The policy implications of this are discussed

Planning by negotiation for sustainable development: A tale of two habitats

In the December 2005 issue of Economic Affairs, a collection of authors considered alternative institutions for planning and managing urban affairs. Following up the idea of 'planning by contract', this paper reflects on the role of negotiation in securing gains from trade over contested local environmental resources. The idea of an obstructive classical planning game is contrasted with the concept of creative negotiation by reference to two case studies. © Institute of Economic Affairs 2006.link_to_subscribed_fulltex

The Coase Theorem and planning for sustainable development

This paper discusses the potential contribution and limitations of the Coase Theorem to the theorisation of sustainable development. The Coase Theorem can be manifested in numerous ways beyond the hypothetical example of direct negotiation between the polluters and the pollutees. Sustainable development not only provides a negotiative context, an infrastructure where compensation in the Coasian sense can be mode, but also a framework for transforming negative externalities into positive externalities, as illustrated by a real life example from Canada. Central to the framework is a change in the mindsets of parties to a negotiation and Schumpeterian innovations.link_to_subscribed_fulltex

Schumpeterian Innovation for Regulated Natural Monopoly as a Corporate Strategy

This paper explains how the ideas of Schumpeter on innovation can be generally applied as a corporate strategy entailing intrapreneurship for companies competing to become natural monopolies. Fuzzy set methodologies may be suitable for analyzing a balancing strategy advocated in this paper in that it entails the features of habitual domains and competence set expansion