THE ECONOMICS OF TENANT RIGHTS IN NINETEENTH CENTURY IRISH AGRICULTURE

The Land Act of 1870, which introduced "tenant rights" to most of Ireland, was the prototype of the modern land reform. This paper develops an alternative to the conventional view that the Land Act was instituted to redistribute wealth. It is suggested that tenant rights became economically valuable as a result of massive emigration from Ireland in the nineteenth century. Data on land rents and landlord investment are consistent with this "efficiency" hypothesis, and tend to refute the "redistribution" hypothesis.     

Should ownership last forever?

This paper investigates the utility of all intellectual property rights being time limited with no limits required for real assets and corporate shares. Ownership rights evolved from hereditary rulers seeking to maintain political power and wealth in perpetuity. This objective is no longer relevant with rulers elected for a fixed time. Neither are perpetual rights consistent with economic justice, efficiency and sustainability. A review of modern techniques of investment analysis reveals that unlimited life property rights are not required and that they can result in investors obtaining benefits in excess of the incentive required to bring forth their investment. Tax incentives provide a voluntary way to introduce time limited property rights to improve equity and efficiency by transferring the ownership of realty or firms to their operational/strategic stakeholders. In this way the wealth of nations could be both democratized and localized to build a more sustainable and just society.     

Incomplete property rights, redistribution, and welfare

In a world where the private protection of property is costly, government redistribution can lead to an increase in aggregate output. This result is not new. The novelty of this paper lies in specifying the conditions under which this efficiency-enhancing redistribution improves everyone’s welfare including the welfare of those whose labor finances the redistributive program (i.e., the rich) and how this is affected by the protection of property rights. The state may directly enhance economic rights through investments in security and the protection of property or it may indirectly do so through the redistribution of income. Under certain conditions, redistribution becomes desirable in situations where the state has exhausted its ability to enhance efficiency through the direct enforcement of property rights. In this case, redistribution can make all members of a society better off. Specifically, this occurs when the cost of predation is sufficiently low and the technology of private protection of property rights is sufficiently weak. The adverse effects of redistribution may be the consequence but not the cause of state failure. The real cause is a corrupt and inept state. My thanks are due to an anonymous referee and Zane Spindler for very helpful and critical comments. I thank SSHRC for financial support     

Property rights and the gender distribution of wealth in Ecuador, Ghana and India

Women’s ability to accumulate wealth is often attributed to whether they have property rights; i.e., a legal personality to own and manage property. In this paper we argue that basic property rights are insufficient; whether women are able to accumulate wealth also depends upon the marital and inheritance regimes in particular contexts. Drawing upon surveys which collected individual level ownership data in Ecuador, Ghana and the state of Karnataka in India, we estimate married women’s share of couple wealth and relate it to how assets are owned within marriage as well as to different inheritance regimes and practices. In Ecuador, married women own 44 %, in Ghana, 19 %, and in Karnataka, 9 % of couple wealth. Ecuador is characterized by the partial community property regime in marriage while inheritance laws provide for all children, irrespective of sex, to be treated equally, norms that are largely followed in practice. In contrast, Ghana and India are characterized by the separation of property regime which does not recognize wives’ contribution to the formation of marital property, and by inheritance practices that are strongly male biased. Reforming marital and inheritance regimes must remain a top priority if gender economic equality is to be attained.     

EVALUATING CHANGES IN THE DISTRIBUTION OF CAPITAL WEALTH

A small-scale general equilibrium model in which the distribution of capital wealth is a key parameter is employed to examine the potential economic consequences of greater capital wealth equality. Every performance indicator examined – aggregate income, consumption equality, social welfare in the sum-of-utilities sense, and aggregate saving –is improved by greater capital wealth equality. However, the bottom-line social welfare gain, relative to the present high-inequality situation – even from the maximum achievable level of complete equality in capital wealth distribution – would be numerically rather modest.     

THE EXTENDED COASE THEOREM AND LONG RUN EQUILIBRIUM: THE NONEQUIVALENCE OF LIABILITY RULES AND PROPERTY RIGHTS

Many authors have held that in a world with reasonable positive transactions costs, the assignment of liability for pollution damages affects profits, thus long run equilibrium. Therefore, the Coase Theorem fails for such cases. Others have defended the Theorem in such situations .
This paper shows that the disagreement has its roots in a confusion of liability rules and property rights. A simple general equilibrium model is used to show that the Theorem is correct for property rights assignments, but not for liability rules. Liability rules are shown to be, in effect, incomplete property rights, which leads to inefficiency .     

OWNERSHIP AND THE REGULATION OF WILDLIFE

The use of wildlife resources is governed by a combination of private contracts and public regulations. Most often, private landowners control access rights, and government agencies regulate hunting and other uses. This paper shows that these institutions depend on wildlife values and the ability of private landowners to control access to species that inhabit their land. Logit regressions and literary sources are used to test implications about private hunting rights and state regulations. The data support the view that private, legal, and political forces have led to institutions that vary in ways consistent with wealth maximization.     

THE DISTRIBUTION OF POLITICAL POWER, THE COSTS OF RENT-SEEKING, AND ECONOMIC GROWTH

Poor economic growth in many countries can be explained by the misallocation of entrepreneurial resources to activities that do not foster growth. This paper deals with the relation between the distribution of political power, the allocation of entrepreneurial resources and growth. We model growth as deriving from Schumpeterian entrepreneurs who try to increase profits through innovation. We endogenize the choice of time devoted to this activity vis-a-vis other ways of increasing income, such as obtaining government subsidies. More unequal access to the political redistribution mechanism makes rent-seeking activities less profitable, and results in higher growth.     

THE EFFECT OF DIRECT DEMOCRACY ON INCOME REDISTRIBUTION: EVIDENCE FOR SWITZERLAND

In political economics, the impact of institutions on income redistribution is mainly studied by comparing different forms of representative democracy. In this article, we analyze the influence of direct democratic institutions on redistribution first focusing on welfare and nonwelfare spending using yearly panel data for Swiss cantons. Then, we estimate a model, which explains the determinants of actually achieved redistribution measured by Gini coefficients. While our results indicate that less public funds are used to redistribute income, inequality is not reduced to a lesser extent in direct than in representative democracies for a given initial income distribution. (JEL D7, D78, I30, H75, H11)     

AN EXPLORATORY MODEL OF THE SIZE DISTRIBUTION OF INCOME

Through a specific model, this paper explores a promising general framework for unified modelling of the size distribution of income and wealth. The specific model includes physical and human capital accumulation, factoral and size distribution effects, redistributive taxation, economic growth, and other distribution-related mechanisms. The main conclusion is that the general framework can accommodate a wide range of distributional phenomena and still remain analytically tractable. Specifically, the framework allows closed form analytic solution for the first two moments (mean vector and variance-covariance matrix) of the joint distribution over individuals of income, wealth, and other variables.     

MIGHT MAKES RIGHTS: A THEORY OF THE FORMATION AND INITIAL DISTRIBUTION OF PROPERTY RIGHTS

This paper is a theoretical and empirical investigation into the formation and initial distribution of property rights. Violence is singled out as a major constraint on this formation process. Its role is explicitly modeled in a choice theoretic framework and some of the implications are tested using data collected from contracts written during the California gold rush of 1848.     

A COMPARATIVE ANALYSIS OF THE NATIVITY WEALTH GAP*

We investigate the relative wealth position of immigrant households residing in Australia, Germany, and the United States. In Germany and the United States, wealth differentials stem from differences in the educational attainment and demographic characteristics of the native and immigrant populations, rather than income differentials. In contrast, the small nativity wealth gap in Australia exists because immigrants to Australia do not translate their relative educational and demographic advantage into a wealth advantage. Overall, we find substantial disparity in the economic well‐being of immigrant and native families which is largely consistent with domestic labor markets and immigration policies. (JEL F22, D31)     

TIME PREFERENCE AND THE DISTRIBUTIONS OF WEALTH AND INCOME

This paper examines the connection between time preference heterogeneity and economic inequality in a deterministic environment. Specifically, we extend the standard neoclassical growth model to allow for (1) heterogeneity in consumers' discount rates, (2) direct preferences for wealth, and (3) human capital formation. The second feature prevents the wealth distribution from collapsing into a degenerate distribution. The third feature generates a strong positive correlation between earnings and capital income across consumers. A calibrated version of the model is able to generate patterns of wealth and income inequality that are very similar to those observed in the United States. (JEL D31, E21, O15)     

THE CHARITY OF THE EXTREMELY WEALTHY

In this article, we show that, compared to billionaires who have inherited their wealth, billionaires who have made their own wealth are more likely to sign the Giving Pledge and more likely to be in the Million Dollar Gifts list or the Philanthropy Top 50 list of big givers. If they give, self‐made billionaires also tend to donate more money. We explore several possible explanations for this correlation between the origin of billionaires' wealth and their charitable giving, and present evidence that suggests that self‐made billionaires tend to spend more money, both by giving money away and by buying expensive items. (JEL D03, H40)     

SOME EFFECTS OF OWNERSHIP ON THE WHOLESALE PRICES OF ELECTRIC POWER

Differences in the property rights which distinguish government-owned and privately-owned, government-regulated business firms imply that government-owned electric utilities sell wholesale electric power at lower prices and buy it at higher prices than similarly-situated private firms. The hypotheses were tested using cross-section data. The results are generally favorable and suggest that the approach is fruitful.     

WOLVES, CHIMPS AND DEMSETZ

Harold Demsetz has argued that when an externality can be internalized through the existence of property rights such that societal benefits exceed costs, property rights will emerge. This paper shows that property rights exist in some animal systems with respect to specific pieces of property and for reasons similar to those postulated by Demsetz. Two cases are considered: wolves, where the property right is in land; and chimpanzees, where the property right exists for meat. The external costs or benefits that produce the property rights are examined and comparisons are drawn with situations in which no externalities exist and no property rights emerge.     

A limit theorem on the dual core of a distributive social system

I consider abstract social systems where the distribution of wealth is an object of common concern. I study, in particular, the systems where liberal distributive social contracts consist of the Pareto-efficient distributions that are unanimously preferred to the initial distribution. I define a Dual Distributive Core from a process of decentralized auction on the budget shares of Lindahl associated with net transfers, operated by coalitions aiming at increasing the value of the public good for their members while maintaining their utility levels. I establish that the dual distributive core converges, as the number of distributive agents becomes large relative to the number of agent types, to a typically finite number of distributive liberal social contracts, which correspond to the Lindahl equilibria that are unanimously preferred to the initial distribution. This process of decentralized auction provides a theoretical foundation for contractual policies of redistribution. The comparison with the usual notion of core with public goods (Foley 1970) yields the following results in this context: the Foley-core is a subset, generally proper, of the set of liberal distributive social contracts; it does not contain, in general, distributive Lindahl equilibria.     

THE EFFECT OF HOUSING WEALTH LOSSES ON SPENDING IN THE GREAT RECESSION

We use panel data on a complete inventory of household spending and assets to estimate the spending response to the sharp and largely unexpected declines in house values that occurred in the Great Recession. Our study complements the existing literature on this topic by relying exclusively on longitudinal micro data on both household wealth and expenditure. Our data span the period 2002–2012, allowing us to separate trends in spending from innovations in response to unexpected wealth changes. We find the marginal propensity to consume out of an unexpected housing wealth change to be 6 cents per dollar among older American households. (JEL D12, D14, E21)     

CLIMBING TO THE TOP? FOREIGN DIRECT INVESTMENT AND PROPERTY RIGHTS

This article operates at the interface of the literature on the impact of foreign direct investment (FDI) on host countries and the literature on the determinants of institutional quality. We argue that FDI contributes to economic development by improving institutional quality in the host country. This proposition is tested within a large panel data set of 70 developing countries for the period 1981–2005. We show that FDI inflows have a positive and highly significant impact on property rights. Results are very robust and not affected by model specification, different control variables, or estimation technique. To our knowledge this is the first article to empirically test the FDI—property rights linkage. (JEL F23, O43, P48)     

Enforcement of property rights in a barter economy

If property rights to consumption goods are insecure, the incentives to trade in a barter economy are reshaped. In a pure exchange economy, we examine the case where two contestable consumption goods are vital to two agents and initial endowments follow a binary distribution. In line with the existing literature, we examine in a two-stage game how the equilibrium security of claims to property is determined. We find that, depending on the exogenous preference and appropriation-effectiveness parameters, two different regimes emerge in equilibrium: trade and appropriation, and peaceful coexistence, with the latter regime exhibiting efficiency with respect to the goods traded. However, inefficiencies arise due to the investment in defensive activities necessary to deter appropriation. Thus, we have found an endogenously determined measure for the transaction cost underlying a market which replicates the outcome of a Walrasian market.