Politics and Property in Natural Resources

Document Type

Article

Publication Date

1-2009

Journal Title

Social Philosophy and Policy

ISSN

0265-0525

DOI

10.1017/S0265052509090177

Abstract

Modern discussions of natural resources focus on increasing public control over extractive industries proposing measures that range from increasing the public's share of the gain via royalties and taxes to regulating extractive activities to prevent environmental problems to outright expropriation of private investments. This article argues that such efforts are counterproductive because the fundamental economic problem of natural resources is producing the knowledge necessary to locate and extract resource deposits. The public benefit comes from enabling the use of the resources and the increased economic activity their discovery produces rather than from royalties or expropriation. The key question in designing natural resource laws is thus their effects on the incentive to discover and manage resources. Private property rights in natural resources are the best way to provide such incentives. Fortunately, the combination of property rights and tort law principles (trespass and nuisance) enables property rights to solve environmental problems related to natural resource extraction as well.

First Page

53

Last Page

94

Num Pages

42

Volume Number

26

Issue Number

2

Publisher

Cambridge

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