Tag Archives: property rights

Kenneth Arrow: Directions of Research in the Coasean Tradition

Marginal Revolution blogger and George Mason University Professor Tyler Cowen moderates a panel on the future of economic research, featuring Nobel laureate Kenneth Arrow.

Marginal Revolution blogger and George Mason University Professor Tyler Cowen moderates a panel on the future of economic research, featuring Nobel laureate Kenneth Arrow.

Last year, CIPE and the U.S. Chamber of Commerce partnered with the Ronald Coase Institute to host a conference that celebrated the legacy of Ronald Coase and review research inspired by his work. Ronald Coase is perhaps best known for his explanation of the importance of transaction costs, property rights, and institutions to the functioning of an economy. A primary thought leader for new institutional economics, he received the Alfred Nobel Memorial Prize in Economic Sciences in 1991.

To recognize the anniversary of the conference, “The Next Generation of Discovery: Research and Policy Change Inspired by Ronald Coase,” CIPE focused this month’s Economic Reform Feature Service article on remarks given by Nobel Laureate and Professor of Economics Emeritus at Stanford University Kenneth Arrow.

To quote Arrow in his opening remarks, Ronald Coase’s work was “provocative, so undriven by fads.” In taking his own independent course, Coase challenged assumptions and norms, and left behind a wealth of insights that continue to influence today’s economic research agenda in a range of fields.

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Russia’s Plan for Economic Recovery: Demolish Small Businesses

With shocking disregard for property rights, due process and the rule of law, overnight on February 9 the Moscow city government set out around city to raze hundreds of small businesses. The demolition took place in spite of the fact that many of these businesses had the proper paperwork to operate a business in that location, and in some cases court orders staying any proposed demolition. While the Moscow city government can rely on revenue from other sources, these kiosks and mini-malls supported hundreds of small shops that provided employment for over 2,000 Moscow residents according to the city’s own estimates.

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Property Rights are Human Rights: How Land Titles Support Self-Determination for Indigenous People

(Photo: Darryl Dyck, The Canadian Press)

(Photo: Darryl Dyck, The Canadian Press)

Grand Chief Stewart Phillip, Okanagan Aboriginal Leader and President of the Union of British Columbia Indian Chiefs, was photographed with a broad smile on his face the day of the unanimous Canadian Supreme Court ruling granting the Tsilhqot’in First Nation in Canada title to 1,700-square-kilometer area of their traditional land. To the Grand Chief, the decision enables his community to “participate in the economic future of this province as equal partners.” Chief Roger William of the Xeni Gwet’in, one of the six groups of the Tsilhqot’in, echoed Steward’s enthusiasm, saying “This case is about us regaining our independence to be able to govern our own nation and rely on the natural resources of our land.”

The Canadian Supreme Court gives the Tsilhqot’in full rights to negotiate land use with corporations interested in mining, logging or developing their traditional territory.  Although the impetus for the Tsilhqot’in bringing the court case was a logging license issued by the government, the community is amenable to negotiating with business and developing portions of the Tsilhqot’in land. “The goal is to have proponents actually come through the door of the Tsilhqot’in Nation,” Chief Russell Myers-Ross of Yunesit’in said.

The Tsilihgot’in are among the few indigenous peoples that have full control over the use and development of their traditional land. Partially because of the Tsilihgot’in Nation’s unique history of never having signed land treaties with European settlers, two decades of court cases have paved the way for this land entitlement victory.

Although indigenous people around the world are granted rights to occupy land, these rights rarely extend to ability to manage the economic development of their land, which is generally managed by the government. This means that when businesses are interested in developing these territories they are legally obligated to negotiate use of the land with the government and not the local population.

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Property Rights, the Rule of Law, and Indigenous Rights

The United Nations chose “Ensuring indigenous peoples’ health and well-being” as the theme for this year’s International Day of the World’s Indigenous Peoples on August 9. (Photo: CIPE Staff)

The United Nations chose “Ensuring indigenous peoples’ health and well-being” as the theme for this year’s International Day of the World’s Indigenous Peoples on August 9. (Photo: CIPE Staff)

What do property rights and rule of law have to do with the rights, health, and well-being of indigenous people? Quite a lot.

The worldwide indigenous population is estimated to be between 220 million and 350 million, spread across all inhabitable stretches of the earth. Land and the natural resources provided by the earth are central to many indigenous cultures and beliefs. The land provides identity, nourishment, home, and often very significant religious or spiritual significance.

Despite this central importance of land, indigenous peoples have historically been deprived of their rights to land by colonization – both political and economic. Communal understanding of ownership and the absence of the concept of land ownership left the door open to such abuses. However, as indigenous rights are becoming more widely recognized and celebrated, many countries are taking important steps to ensure respect for these rights, in order to improve the opportunities and well-being of their indigenous citizens.

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Property Markets, the Rule of Law, and Real Estate Investment

Top_of_Rock_Cropped

Real estate investors are attracted to the United States because its strong legal system protects their investment and because of the easy availability of accurate information. (Photo: Wikimedia Commons)

I recently participated in George Washington University’s 2015 Global Real Estate Conference in New York. Having been invited to share CIPE’s work developing the International Property Markets Scorecard at the International Real Estate Federation’s (FIABCI-USA) annual meeting, which dove-tailed with the conference, I took the opportunity to educate myself on the current happenings in the real estate field and see how CIPE’s work might resonate with the professionals most connected to international investment in property.

Headliners at the conference included international representatives from such prominent companies as Morgan Stanley, CBRE, Knight Frank, and Cushman & Wakefield. Mostly I learned a great deal of “inside baseball” language and can now boast a broader vocabulary, but there was another theme that kept coming up. Whether talking about mitigating risk, conducting valuation of property, or trying to determining capitalization rates, it all came down to the need for reliable information and a stable environment that allows for confident investing.

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Celebrating Ronald Coase’s Legacy with Practical Approaches to Economic Reform

Marginal Revolution blogger and George Mason University Professor Tyler Cowen moderates a panel on the future of economic research, featuring Nobel laureate Kenneth Arrow.

Marginal Revolution blogger and George Mason University Professor Tyler Cowen moderates a panel on the future of economic research, featuring Nobel laureate Kenneth Arrow.

Ronald Coase was one of the most influential economists of the 20th century. As important as his theoretical contributions was the simple but profound idea of moving away from “blackboard economics” to look at real-world problems and how institutions actually work. This is an insight that informs our work at CIPE, and which influenced many new ideas and approaches in economics over Coase’s long working life (he published his last book at the age of 101, a year before his death in 2013).

On March 27-28, the Ronald Coase Institute and CIPE honored these contributions with a conference highlighting research and policy in the Coasean tradition, featuring Nobel laureates Kenneth Arrow and Oliver Williamson, distinguished senior scholars and practitioners, and young alumni of the Ronald Coase Institute.

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Egypt’s New Suez Canal Project Unearths More Than Just Dirt

suez-bridge

Egyptian President Abdel Fattah al-Sisi’s government is counting on a new multi-billion dollar Suez Canal project to help overcome what has been described as Egypt’s worst economic crisis since the 1930s, with high unemployment — 13.4 percent — and 45 percent of the population living below the international poverty line of $2 per day. Yet, what’s more important than the new Suez Canal’s objective to stimulate the economy and create jobs is who made it financially possible to carry out such an ambitious project and what that could mean for Egypt.

In eight days, Egyptians invested 64 billion EGP (about $9 billion) in the new Suez Canal project — and 82 percent of that investment came from individuals versus just 18 percent from institutions. The influx of investments introduced 27 billion EGP (about $3.8 billion) into the banking system, which is especially notable given that only one in ten Egyptians has a bank account. The overwhelming turnout of individual, cash-heavy investors from an underbanked population points to Egypt’s strong cash economy, which in turn begs the questions: how much more money is hiding under mattresses and why have these assets remained unused?

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