De Facto and De Jure Property Rights: Land Settlement and Land Conflict on the Australian, Brazilian and U.S. Frontiers

Lee J. Alston, Edwyna Harris, Bernardo Mueller

NBER Working Paper No. 15264
Issued in September 2009
NBER Program(s):Development of the American Economy, Environment and Energy Economics, Law and Economics, Political Economy

We present a conceptual framework to better understand the interaction between settlement and the emergence of de facto property rights on frontiers prior to governments establishing and enforcing de jure property rights. In this framework, potential rents associated with more exclusivity drives "demand" for commons arrangements but demand is not a sufficient explanation; norms and politics matter. At some point enhanced scarcity will drive demand for more exclusivity beyond which can be sustained with commons arrangements. Claimants will therefore petition government for de jure property rights to their claims - formal titles. Land conflict will be minimal when governments supply property rights to first possessors. But, governments may not allocate de jure rights to these claimants because they face differing political constituencies. Moreover, governments may assign de jure rights but be unwilling to enforce the right. This generates potential or actual conflict over land depending on the violence potentials of de facto and de jure claimants. We examine land settlement and conflict on the frontiers of Australia, the U.S. and Brazil. We are interested in examining the emergence, sustainability, and collapse of commons arrangements in specific historical contexts. Our analysis indicates the emergence of de facto property rights arrangements will be relatively peaceful where claimants have reasons to organize collectively (Australia and the U.S.). The settlement process will be more prone to conflict when fewer collective activities are required. Consequently, claimants resort to periodic violent self-enforcement or third party enforcement (Brazil). In all three cases the movement from de facto to de jure property rights led to potential or actual conflict because of insufficient government enforcement.

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Document Object Identifier (DOI): 10.3386/w15264

Published: Alston, Lee J., Edwyna Harris, and Bernardo Mueller, “The Devel opment of Property Rights on Frontiers: Endowments, Norms and Politics,” Journal of Economic History 72 (September 2012):741‐770. Earlier version published as NBER Work ing Paper No. # 15264 (September 2009).

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