Research Handbooks in Law and Economics series
Edited by Kenneth Ayotte and Henry E. Smith
Gary D. Libecap and Dean Lueck* I. INTRODUCTION Land demarcation systems are ancient human artifacts and are fundamental to property law, use, and markets. In this chapter we develop an economic framework for examining systems of land demarcation and examine the economic history of demarcation in the United States and elsewhere. Land demarcation is one of the earliest actions of organized human groups. Territories to hunting and gathering sites have been marked and defended among the most primitive peoples (Bailey 1992). The earliest agricultural societies defined rights to plots of land for farming (Ellickson 1993). In modern societies rights are designated for residential and commercial use in dense urban areas, for farmland in highly mechanized large-scale fields, for landscapes allocated primarily as wildlife refuges or wilderness parks, and for such related resources as minerals and water. Yet, despite the somewhat obvious point that a system of demarcating rights to land will be important in determining its utilization and value, the literatures in economics and in law have not addressed these issues in any depth. In this chapter we examine the economic structure and function of land demarcation systems. We direct attention to the two systems that have dominated land demarcation: metes and bounds (MB) and the rectangular system (RS). Under MB land claimants define property boundaries in order to capture valuable land and to minimize the individual costs of definition and enforcement. Individual surveys do not occur before settlement, and they are not governed by a standardized method of measurement...