The rent-seeking is all the efforts to build the dams that exceed the benefits of getting the additional territory. Using rent-seeking in a very broad sense a al political economy/public choice literature. Clearly there is some type of benefit each side gets from increasing their territories—that would be the rent they expect to collect by having ownership of the additional territory.
Each side if paying more to move the property line (reassign the property right to come area) than they are getting from actually owning the land. This occurs after they have already agreed on an allocation of property rights. Per Coase, all the remaining adjustments would then be payments by one side to the other for access/use or ownership. But why would they respect the allocation of rights by Coase more than the allocation they agreed among themselves?
Coase either needs Leviathan or a well shared and respected view of property rights. This last point seems a bit similar to a critique I heard James Buchannan made of David Friedman’s Machinery of Freedom thesis. That is, the theory fails if all protection agencies do not hold the same fundamental understanding of property rights. Perhaps that same problem plagues Coase in this type of setting. In other words, Coase requires a shared property rights regime that is generally accepted, as is the external enforcement of those rights by outside parties. I had never real considered that type of constraint on Coase before.
Do you have some pointers to the many-player problem you mention—hopefully not too mathy or with a good verbal summary of the argument. Or is what I’ve just “discovered” the general thrust of that problem?
I picked up my understanding of Coase from Law’s Order.
Coase either needs Leviathan or a well shared and respected view of property rights.
This seems wrong. Even in the example at hand (i.e. the dams), there’s no Leviathan or respected property rights, just a negotiated border, yet we can still apply the Coase method: families pay each other to respect the border. This does require some method of credible precommitment (though iteration can largely substitute for that), and an ability to not “pay” if one family outright invades, but it doesn’t seem to require any property rights other than the ability to hide one’s own money.
The rent-seeking is all the efforts to build the dams that exceed the benefits of getting the additional territory. Using rent-seeking in a very broad sense a al political economy/public choice literature. Clearly there is some type of benefit each side gets from increasing their territories—that would be the rent they expect to collect by having ownership of the additional territory.
Each side if paying more to move the property line (reassign the property right to come area) than they are getting from actually owning the land. This occurs after they have already agreed on an allocation of property rights. Per Coase, all the remaining adjustments would then be payments by one side to the other for access/use or ownership. But why would they respect the allocation of rights by Coase more than the allocation they agreed among themselves?
Coase either needs Leviathan or a well shared and respected view of property rights. This last point seems a bit similar to a critique I heard James Buchannan made of David Friedman’s Machinery of Freedom thesis. That is, the theory fails if all protection agencies do not hold the same fundamental understanding of property rights. Perhaps that same problem plagues Coase in this type of setting. In other words, Coase requires a shared property rights regime that is generally accepted, as is the external enforcement of those rights by outside parties. I had never real considered that type of constraint on Coase before.
Do you have some pointers to the many-player problem you mention—hopefully not too mathy or with a good verbal summary of the argument. Or is what I’ve just “discovered” the general thrust of that problem?
I picked up my understanding of Coase from Law’s Order.
This seems wrong. Even in the example at hand (i.e. the dams), there’s no Leviathan or respected property rights, just a negotiated border, yet we can still apply the Coase method: families pay each other to respect the border. This does require some method of credible precommitment (though iteration can largely substitute for that), and an ability to not “pay” if one family outright invades, but it doesn’t seem to require any property rights other than the ability to hide one’s own money.