Bouckaert, Boudewijn --- "Original Assignment of Private Property" [2010] ELECD 382; in Bouckaert, Boudewijn (ed), "Property Law and Economics" (Edward Elgar Publishing, 2010)

Book Title: Property Law and Economics

Editor(s): Bouckaert, Boudewijn

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847205650

Section: Chapter 5

Section Title: Original Assignment of Private Property

Author(s): Bouckaert, Boudewijn

Number of pages: 19

Extract:

5 Original assignment of private property
Boudewijn Bouckaert


1. Introduction
Property rights' systems, traditional as well as modern complex ones, have
to cope with the problem of the assignment of non-owned, abandoned,
lost or newly discovered goods. The origins of the assignment-problem are
thus obvious: (1) either already known assets are not yet appropriated by
members of the concerned community or are abandoned again by these
members; (2) new types of scarce resources, not known or not regarded
as scarce at the moment of the elaboration of the rules of the property
system, may appear. Examples of (1) are: newly discovered acquired or
conquered land such as the American West, wild animals, and water from
seas, oceans and streams. Examples of (2) are: inventions and artistic
creations, frequencies of the broadcast spectrum, subsurface minerals,
and orbital spaces. The question arises by which rules or procedures goods
without owner should be assigned and be put, provided transferability of
such assets is allowed, within market circulation.
The choice of the rule of original assignment would not matter from an
efficiency point of view when transaction costs are zero. Whomever the
good is originally assigned to, the market would relocate it without fric-
tion to the most efficient user. As transaction costs may be prohibitively
high for efficient relocation, it is possible that inefficiencies in the original
assignment remain uncorrected through the market. This general remark,
based on the Coase-theorem, applies also to the wider notion of political
transaction costs. ...