Law and Economics for Civil Law Systems

Law and Economics for Civil Law Systems

Ejan Mackaay

Ejan Mackaay offers a comprehensive look at the essential points of economic reasoning, the Coase Theorem, and legal institutions such as intellectual property, extra-contractual civil liability and contracts. The book’s structure mirrors the way law is taught in civil law countries, with structured presentations, references to civil code articles paired with non-technical explanations, and limited reliance on graphs. This English-language version builds on the success of the author’s 2008 French-language textbook on law and economics from a civil law perspective.

Chapter 8: Property and real rights

Ejan Mackaay

Subjects: law - academic, comparative law, law and economics


Property has already been mentioned several times in the preceding chapters. In Chapter 3 on human interaction (games), we saw that where a group of miners becomes too large for mutual surveillance to work there is a danger of free riding, which may lead to conflict. Individual property is one institution to avoid such conflict. In other contexts, property provides a way out of the collective ruin that would result from persons fighting over a scarce but indivisible resource (as in the example of the colouring book). In the chapter on the Coase Theorem, an externality was analysed as conflicting uses of an object the property rights on which do not (yet) govern such uses. Once the rights are duly extended to cover such uses, the externality is ‘internalised’ and persons concerned can then shift objects or particular uses of them towards the person for whom they are the most valuable. In these illustrations property plays a coordinating, pacifying, even civilising role as a means of managing scarcity. Emergent scarcity was mentioned in Chapter 3 in the discussion of the film The Gods Must Be Crazy. The Coke bottle creates a new problem of scarcity: there are too many competing demands for its use.

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