Notes on Property in Commons (draft)

[I’m publishing this draft work-in-progress here to make it easier to get feedback. Feel free to leave a question or comment]

Elinor Ostrom makes the point that commons-pool resources and commons property are different animals. Any particular commons resource can be held under a variety of different property regimes or property law systems. But commons resources and commons property are often confused and used interchangeably.

Resources vs Rights

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The Bundle of Rights

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Bundles, Systems, and Holders of Property Rights (Schlager and Ostrom 1992)

[Note: In the center box above labeled “Property Rights System” the item “individual property” should actually be “private property” which might be either individual or collective.]

 

“…most institutional analysts are familiar with the Schlager and Ostrom work on property rights (Schlager, Edella, and Elinor Ostrom. “Property-rights regimes and natural resources: a conceptual analysis.” Land economics (1992): 249-262.). In this piece, they lay out a conceptual map for bundling of various types of property rights with a goal of showing that ownership is more than a simple binary division. Their revised table (from a 1996 book chapter) looks like this:” http://michaelschoon.com/2013/09/25/

property roles and bundles of rights - Ostromspace

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property-rights bundle - big

The Bundle of Property Rights — Click to enlarge (californiarealestatecourses.com/lawcourse/lesson2/L2S1Nar.htm)

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Estates—Rights in real property which are or may become, possessory

1. Freehold estates—exist for an indefinite period of time

a. Fee estates (a fee, an estate in fee, estate of inheritance)

(1) Fee simple absolute—the greatest degree of ownership.

(2) Fee simple defeasible—can be defeated by some condition subsequent

2. Less-than-freehold estates (a leasehold estate)—exists for a determinable period of time—a form of personal property.

a. Estate for years

b. Estate from period to period (e.g., month-to-month)

c. Estate at will

d. Estate at sufferance

[from  Real Estate Trainers, Inc..Legal Aspects of Real Estate]

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Concurrent Estates (tenancy in common, joint tenancy, tenancy by the entirety)

Leasehold

Condominium

Trust (private, charitable, beneficial, etc.)

Beneficial Interest

Community Land Trust

Public Conservation Area

Private Conservancy

Easement

Doctrine of Mortmain

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Do collective property rights make sense? Insights from central Vietnam

Abstract

We draw on empirical results from three case studies of property rights change across forest and fisheries ecosystems in central Vietnam to investigate the circumstances under which collective property rights may make sense. A generic property rights framework was used to examine the bundles of rights and associated rights holders in each case, and to assess these arrangements with regard to their contextual fit, legitimacy and enforceability. The cases illustrate the interactions between private and collective rights to lands and resources, and the trade-offs inherent with different mixes of rights.

1. Introduction

Responding to the challenges of rural poverty and environmental sustainability requires a flexible mix of individual and collective property rights. Resource-based activities shift, depending upon, among other things, household needs, local ecologies and market opportunities. For these reasons, conventional categorization or advocacy of private, collective or public rights rarely account for the complex realities found in particular places (Barry and Meinzen-Dick 2008; German and Keeler 2010). Many property rights arrangements tend to enclose specific areas or reduce some people’s access to specific goods. Overlapping but differentiated ‘bundles of rights’ (Schlager and Ostrom 1992) and hybrid property regimes can offer a more effective lens for understanding property rights complexity. In the context of a mixed public-private or collective rights situation, such bundles of rights may be related to access, withdrawal, management, exclusion and alienation of resources, or parts of a resource, through time and space (Barry and Meinzen-Dick 2008). Farmers or fishers may advocate for part of a bundle of rights (extraction, for example) with other rights residing with the collective or the state (management or alienation, as an example). Sensitivity to circumstance or context reveals that individual, collective and public property rights each have merits (Evans et al. 2010). The challenge for the resource manager, donor or policy-maker is to ‘read’ when and where different rights regimes may be appropriate to support poverty alleviation and sustainable rural livelihoods more generally.

Vietnam has moved from forms of collectivization and state ownership that began in the late 1950s to an ambitious ‘renovation’ program leading to individual land titling in the late 1980s (Do and Iyer 2008). The Doi Moi period (or ‘renovation’) aimed to transform a centralized, state-planned economic system into a more decentralized, market-oriented system whereby the private sector would become the main engine of growth1. One aspect of these reform policies was to devolve authority over production decisions to farmers and enterprises, and to establish property rights (for agricultural land and in some cases for individual households to manage forest areas) to encourage investment and provide a form of collateral for rural dwellers (Sunderlin et al. 2008). The majority of Vietnam’s 90 million people have access to small amounts of land (1–2 ha), particularly in rural, agriculture-focused areas (where 72% of the population lives) (HDR 2009). Policy reforms in the 2000s (e.g. changes to the 2003 Land Law and Fisheries Law) recognized the role for collective rights, once again, to manage forest areas and fishing grounds. However, in the context of increasing privatization of land and marketization of rural production, the contextual fit, legitimacy and enforceability of collective rights has been uncertain…

Insights from the cases highlight how the needs and aspirations of individuals and households do not easily conform to conventional property rights narratives (private vs. collective) or the implementation of policy prescriptions that emerge from these narratives. Results of the analysis contribute to common property theory by showing how local actors may choose to collectively manage and use natural resources (forest lands and aquatic resources in this case) as part of a broader strategy to obtain individual bundles of rights (which may include access, withdrawal, management, exclusion and alienation of resources, or parts of a resource) within the context of a collective rights policy framework.

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Beyond Markets and States: Polycentric Governance of Complex Economic Systems, by Elinor Ostrom (2009 Nobel Prize lecture slides)

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Individual garden plots on soviet collective farms

The sovkhozy tended to emphasize larger scale production than the kolkhozy and had the ability to specialize in certain crops. The government tended to supply them with better machinery and fertilizers. Labor productivity (and in turn incomes) tended to be greater on the sovkhozy. Workers in state farms received wages and social benefits, whereas those on the collective farms tended to receive a portion of the net income of their farm, based, in part, on the success of the harvest and their individual contribution.

Although accounting for a small share of cultivated area, private plots produced a substantial share of the country’s meat, milk, eggs, and vegetables.[citation needed]Although never more than 4% of the arable land in the USSR, private plots consistently produced roughly a quarter to a third of agricultural produce. Private plots were among many attempts made to restructure Soviet farming.[citation needed] However, the weak worker incentives and managerial autonomy, which were the crux of the problem, were not addressed.[citation needed]

The private plots were also an important source of income for rural households. In 1977, families of kolkhoz members obtained 72% of their meat, 76% of their eggs and most of their potatoes and eggs from private holdings. Surplus products, as well as surplus livestock, were sold to kolkhozy and sovkhozy and also to state consumer cooperatives. Statistics may actually under-represent the total contribution of private plots to Soviet agriculture.[4] The only time when private plots were completely banned was during collectivization, when famine took millions of lives.[5] 

http://en.wikipedia.org/wiki/Agriculture_in_the_Soviet_Union

Soviets Pushing Food Production On Small Individual Plots

news.google.com/newspapers?nid=1873&dat=19821019…

Soviet law allows country and city dwellers alike to farm as much as one half a plots,— and the yield per acre far outstrips that of state and collective farms.

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Party, State, and Citizen in the Soviet Union: A Collection of … – Page 258 – Google Books Result

The collective farm member’s personal household plot 57. use of a plot of land adjacent to their house as a vegetable garden, orchard, or to meet other needs.

Under the Collective Farm Charter (1935), individual farmers were permitted to keep small garden plots and a few animals for domestic use, and to sell surplus production in local free markets. http://encyclopedia2.thefreedictionary.com/collective+farm

Bibliography

See R. W. Davies, The Soviet Collective Farm (1980); W. Hinton, The Great Reversal (1989); A. Etzioni et al., ed., The Organizational Structure of the Kibbutz (1980).

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owners lavished more care and effort on their own crops than on collective or state fields. Comparative Economic Systems: Transition and capitalism alternatives – Page 96 – Google Books Result

Self-Sustainability of Subsidiary Household Plots: Lessons for

region actually was a combination of collective, state, and individual farming. Subsidiary household plots (lichnyye podsobnyye khozyaystva in Russian) culti ….. hectare, while the average yields in Russia are 18-20 centners per hectare. ….. Durgin, F., “Household Garden Plots,” RSEEA Newsletter, 13, 3, September 1991
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The Meaning of Property “Rights:” Law vs. Economics?“Given the importance of property “rights” in economics, it might be expected that there would be some consensus in economic theory about what property “rights” are. But no such consensus appears to exist. In fact, property “rights” are defined variously and inconsistently in the economics literature.”
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Analysis: Cuba’s derechos de superficie: Are they ‘real’ property rights?

A derecho de superficie is a derecho real over land that does not belong to its holder (the superficiario), but that the owner of the land in question concedes while retaining the title (dominio, or ownership) to the land itself. The superficiario is thus allowed to build and/or plant on the land while the laws acknowledge his own rights over the buildings or structures and plantations so emplaced as independent from the title holder or land-owner’s rights. Superficie rights are usually only temporary in nature. Once the superficie rights expire, when the term stipulated in its title (the grant or concession creating it) runs its course, or when it is otherwise extinguished, a reversion takes place and the owner of the land takes title to the buildings or improvements made on his land by the superficiario.

Over the past few years, the derecho de superficie has been enjoying a comeback in a number of countries — in Spain, in Argentina, even in China. And the Cuban Civil Code’s provisions on this topic are often cited as an example by those who urge their countries’ legislatures to make superficie rights part of their laws.

One of the reasons behind this resurge is intrinsically tied to societal models that, even if presently evolving (some faster than others), seek to keep the direct ownership of land in the hands of the state, such as Cuba.

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Pensacola Beach is actually located on a barrier island in Escambia County, connected to the mainland Pensacola and Gulf Breeze by the Bob Sykes bridge. The land belongs to the Federal Government by virtue of a 1947 deed which leases it to the businesses and residents in 99 year increments, making them long-term leaseholders through the Santa Rosa Island Authority, instead of property owners. http://www.gibbons-realty.com/pensacola-beach-homes-and-condos/

Santa Rosa Island Authority

Pensacola Beach, is owned by Escambia County, Florida, and is under the direction of the Santa Rosa Island Authority (SRIA). The SRIA was created by the Florida legislature in 1947 under Chapter 24500. The SRIA does not receive tax support from the taxpayers of the county. It is fully funded from rental fees collected from business and residences on the beach.

The Authority is made up of six members, five are named by members of the Escambia County Board of County Commissioner and whose term is the same as the commissioner who appointed them. The sixth member is elected by the registered voters on Pensacola Beach. The sixth members’ term is two years.

Because of restrictions placed in the legal document from the United States government, land may not be purchased on Pensacola Beach; instead property is rented by the Island Authority for varying periods of time.

Pensacola Beach is about 1,474 acres, which make up approximately 30% of Escambia County on Santa Rosa Island. Pensacola Beach is about eight miles long and a quarter mile at its widest. At the present time 60% of Pensacola Beach is public use or public service land with the remaining 40% rented for residential and commercial use.

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Open access vs. the commons

When Hardin (1968, p. 1244) asked his readers to “[p]icture a pasture open to all,” he was referencing an ungoverned open-access regime from which nobody could be excluded. Yet by calling the resulting collective action problem “the tragedy of the commons,” the notion of common property became conflated with the lawless (or law-free) condition of open access. The distinction between open-access and common property was made decades ago by Ciriacy-Wantrup and Bishop (1975) and has been reiterated by Ostrom (e.g. 1999, pp. 335–336; see also Schlager and Ostrom 1992) and others (e.g. McCay 1996, p. 113; Dagan and Heller 2001, pp. 556–557; Eggertsson 2003, pp. 75–76). Yet confusion on this point has yet to be fully eradicated. Recognizing that nearly all “private” property is actually owned (or at least used) by groups, such as households or firms, offers one way around this blind spot. These everyday examples of non-tragic commons lead us to ask not whether common property is feasible at all, but rather under what circumstances and at what scale.

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Lee Anne FennellUniversity of Chicago Law School, lfennell@uchicago.edu
Abstract

Elinor Ostrom’s work has immeasurably enhanced legal scholars’ understanding of property. Although the richness of these contributions cannot be distilled into a single thesis, their flavor can be captured in a maxim I call Ostrom’s Law: A resource arrangement that works in practice can work in theory. Ostrom’s scholarship challenges the conventional wisdom by examining how people interact over resources on the ground – an approach that enables her to identify recurring institutional features associated with long-term success. In this essay, I trace some of the ways that Ostrom’s focus on situated examples has advanced interdisciplinary dialogue about property as a legal institution and as a human invention for solving practical problems. I begin by highlighting the attention to detail that characterizes Ostrom’s methodology. I then examine how Ostrom’s scholarship yields insights for, and employs insights from, property theory. Next, I consider the question of scale, an important focal point of Ostrom’s work, and one that carries profound implications for law. I conclude with some observations about interdisciplinarity as it relates to research on the commons.

Keywords

anticommons; commons; interdisciplinarity; models; scale; semicommons

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We the People, Inc.

Libertarians, conservatives, and rich people are always saying government should be run more like a business. Here are some very businesslike ideas they probably won’t like.

I think society should encourage everyone to own a little bit of land and a modest domicile, free of tax. But since the public is the granting authority of ownership rights (and also the judicial and policing authority of those rights), our doctrine should be that there is an implied public easement on all land and structures that prohibits various kinds of public nuisance and environmental harm (actually this is already implied, but too narrowly).

Perhaps we should also have a federal rent on all land above a certain “homestead exemption” value, something like the Land Value Tax (LVT) proposed by Henry George. This would be an even stronger way to assert the public interest in all our land and resources. We should have a federal tax on non-renewable resource use, too, not just on carbon.

Coste social del monopolio. Monopoly's Social ...

Monopoly’s Social cost. (Photo credit: Wikipedia)

I also like an idea I got from Nate Blair that the public can rent out patent and copyright monopolies instead of granting them free gratis, especially if the rent is in the form of a royalty on profits rather than an up-front cost. Since it is We the People who grant and guarantee patent and copyright rights, why should we not reserve some rights and benefits to the people?

In some cases we may want to buy back patent rights on medicines and other things that have a compelling social value to insure they will be available at or near the cost of production. As Nate writes:

Another great innovation would be for society to attempt to value the social benefit of an innovation, particularly in the field of medicine, and then make an offer that the innovator couldn’t refuse.For example, inventor of an HIV immunization could earn 10 billion in profit, but the social cost of monopolizing the treatment that some people cannot afford may equal 50 billion. Society could offer an award of 20 billion, like XPRIZE; accepting the prize would mean transferring the rights to society (to the commons) so that everyone could be treated at the marginal cost. The innovators get 10 billion more than they would have under the “free” (monopolized) market, and society has made a 30 billion dollar economic/societal profit. —Nate Blair

Patent rights in the United States during the ...

Patent rights on radio (Photo credit: Wikipedia)

Related PRA 2.0 Posts

The Property Problem

E.F. Schumacher...Small is Beautiful...

Many of my peers (and some of my betters) on the left seem determined to blame our economic ills on our notions of property and ownership.

(These comments were prompted by Interview: On Marvin Brown’s ‘Civic’ Economics of Provision on the P2P Foundation blog)

I agree with placing the major emphasis of economics on fair distribution and provisioning human needs (as E. F. Schumacher put it, “Economics as if people mattered”) but I often find arguments against “property” per se to be problematic:

1. Most ordinary people today are used to property and are threatened even by well intentioned efforts to replace it with less familiar paradigms.

2. Property isn’t just part of an economic theory, it is deeply embedded in law throughout the world. This creates a very high barrier for alternatives.

3. Slavery was a serious misapplication of property law, but the fix is a relatively simple declaration: People shall not be property.

4. Some argue that things like natural resources should not be property. But it can also be argued that public property is a designation of property rights that helps civic society define resources as part of its common-wealth and to protect them from private enclosure or abuse.

5. The concept of property has a lot of utility. It may sometimes be broken or misapplied in certain ways, but I think it can be more easily fixed than replaced with something new. The main fix is to emphasize conditionality. Ownership is actually a “bundle” of severable rights. Some rights are held by the nominal owner, but some are held by others with various equitable or social interests. This divisible bundle of rights is well established in Western common law (I’m not familiar with oriental law) but it is not well established in the public mind. We need to educate people about their own legal “roots” before we decide to replace thousands of years of common law with something new and untested.

Arrangements worked out over centuries and millennia often embody strategies for resolving ambiguity and complexity that are themselves ambiguous and complex.

Too many well-meaning reformers fail to observe the “if it aint broke don’t fix it” rule and the “don’t throw the baby out with the bath water” rule. If we fail to properly correlate causes and effects, we often fix the wrong thing and/or produce unintended consequences (sometimes known as “shooting oneself in the foot”).

Property law is probably as complex as a motorcycle, and fixing it is more like motorcycle maintenance than philosophy.

One thing I have learned about private vs community property: even in a common-property household or community, chain saws should be privately held. It only takes an instant to dull a chain whereas expert sharpening is non-trivial. The guy who messes up the chain should be the same guy that has to sharpen it and should be the only guy who gets hurt because of it.

Poor Richard

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