Elgar original reference
Edited by Enrico Colombatto
Enrico Colombatto On property rights and economic analysis The role of property rights in economics can hardly be overemphasised. Indeed, since all the essential controversies about the purpose and nature of economic science can be reformulated as debates on the features of individual behaviour (consumption, production, leisure, policy making), and since the motivation and opportunities for human action are deﬁned by systems of property rights, it is fair to say that economic analysis is about the consequences of the assignment and use of property. Of course, economics still remains a question of scarcity, as individuals try to enhance their well-being in a world characterised by ignorance and limited resources. But the very concept of scarcity would make little sense unless the idea of property were taken into account, for property rights deﬁne the structure of incentives that lead agents to struggle, compete and also cooperate in order to satisfy their needs and ambitions. Indeed, property rights characterise scarcity itself, which becomes a meaningful concept only if the possibility of using – or beneﬁting from – a given good is related to how much one gains by transferring (acquiring) those rights to (from) others. This view is now commonly accepted; even by those who favour technocratic approaches based on formal models where institutions hardly play a role. Contrary to common belief, however, the link between economic performance and property rights goes well beyond the standard problems of static optimisation, whereby supposedly efﬁcient techniques are necessarily adopted and inputs fully...