Daniel W. Bromley

Economic Interests and Institutions: The Conceptual Foundations of Public Policy

1. Economic Interests and Institutions I The Intellectual Problem II The Plan of the Book Part I Interests and Institutions 2. On Institutional Change: The Conventional Views I The Property-Rights View II Induced Institutional Change III The North Model of Institutional Change IV An Expanded View of Institutional Change 3. The Nature of Institutions I The Practice of Institutions II The Concept of Institutions III Institutions as Legal Relations IV Institutions and Markets: The Economy as a Set of Ordered Relations V The Normative Content of Institutions VI Individuals, Markets, and Coercion VII Summary 4. Preferences, Choices and Institutions I Preferences, Revealed and Otherwise II Preferences and Choices III Summary Part II Institutional Change 5. Institutional Transactions I The Economy and Institutional Change II Institutions and Efficiency, Again III On Efficiency and Optimality IV Institutional Transactions V Summary 6. Interests, Institutions, and the Framing of Choice I Missing Markets, Present-Valued Caims and Discounted Interests II Entitlements, Risk and Choices III Entitlements and Efficiency: Reallocating Economic Opportunity IV Language and Concepts: Productivity and Efficiency V Summary 7. Property Rights and Institutional Change I Concepts of Property in Economics II The Essence of Ownership III The Philosophical Case for Private Property IV The Practice of Property V Property Entitlements VI Summary Part III Institutions and Policy Analysis 8. Theory Science and Policy Science: Beyond Positivism I Beyond Positivism: Policy Science and Theory Science II Institutions and a New Research Philosophy III Summary 9. The Policy Problem.

Property relations and economic development: The other land reform

Abstract Continued concern for development has led to the suggestion that private property rights should be created to stimulate economic development. This suggestion derives from an incomplete understanding of the property relations on the public domain lands in the arid tropics, and from a confusion of cause and effect between property and economic productivity. A model of the private-public boundary in land is developed that challenges the view that wealth would increase if land at the extensive margin were privatized. The various types of property regimes in land are defined and explained.

Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions

Acknowledgments vii Preface ix PRELUDE 1 CHAPTER ON: Prospective Volition 3 CHAPTER TWO: The Task at Hand 20 PART ONE: On Economic Institutions 29 CHAPTER THREE: Understanding Institutions 31 CHAPTER FOUR: The Content of Institutions 43 CHAPTER FIVE: Institutional Change 67 PART TWO: Volitional Pragmatism 85 CHAPTER SIX: Fixing Belief 87 CHAPTER SEVEN: Explaining 103 CHAPTER EIGHT: Prescribing and Predicting 115 CHAPTER NINE: Volitional Pragmatism 129 PART THREE: Volitional Pragmatism at Work 153 CHAPTER TEN: Thinking as a Pragmatist 155 CHAPTER ELEVEN: Volitional Pragmatism and Explanation 166 CHAPTER TWELVE: Volitional Pragmatism and the Evolution of Institutions 180 CHAPTER THIRTEEN: Volitional Pragmatism and Economic Regulations 199 CHAPTER FOURTEEN: Sufficient Reason 212 Bibliography 225 Index 235

Indigenous land rights in sub-Saharan Africa: Appropriation, security and investment demand

Abstract We discuss the links between rights appropriation, tenure security, and investment demand in sub-Saharan Africa. Common assertions regarding indigenous tenure are: 1. (a) insecurity of tenure leads to suboptimal investment incentives; and 2. (b) appropriation of land rights in the public domain is rent-dissipating. We argue that land use and investment decisions among African farmers often have two motives — productivity and rights appropriation. The usual assertions thus seem contradictory. We offer a conceptual model to show that indigenous tenure may provide equal or higher investment incentives than private rights, and may promote modes of rights appropriation that are productive rather than wasteful.

The ideology of Efficiency: Searching for a Theory of Policy Analysis*

The potential Pareto improvement criterion and other measures of economic efficiency do not pass the test of consistency and coherence within economic theory, nor do such measures accord with what public decision makers seek in policy advice from economists. Such efficiency measures are, nonetheless, durable components of the ideology of economics in general, and benefit-cost analysis in‘ particular. The objectivity of the policy scientist has been confused with the objectivity of the science. While economic efficiency has no claim to objectivity, the policy scientist can be an objective analyst of policy choices.

Agricultural Runoff as a Nonpoint Externality: A Theoretical Development

The purpose of this paper is to develop and explore a theory dealing with an important facet of agricultural runoff problems. Agricultural runoff is a nonpoint externality with notable implications for both research and policy. A nonpoint externality exists whenever the externality contributions of individual economic agents cannot be practically measured by direct monitoring. Without monitoring, regulations on emissions cannot be enforced, and charges or subsidies cannot be assessed. Thus, policies which are usually suggested for pollution abatement are not available. There is great need for a theoretical base that can adequately capture these facts. Such a theory yields some important implications even before specific empirical applications. The economic problem of agricultural runoff can be separated into three distinct categories. First, the sediment, nutrients, and chemicals removed by runoff represent a loss of resources to the individual farmer. These costs are borne privately by farmers. Second, if the discount rate of the individual farmer is greater than the social discount rate, or if the farmer has a planning horizon which is shorter than societys, the farmer will mine the soil resource at a rate which is more depletive than is socially optimal. This is a temporal externality. A third category involves the conservation of mass. Physical resources lost by the individual farm must appear elsewhere in the environment. In sufficient quantities, these resources are pollutants. Since water is the primary transport media for these resources, it is water that is polluted by soil, nutrients, and agricultural chemicals. This spatial externality has been the focus of much research. Here we intend to develop a theory for these issues, to employ it to suggest a revised research methodology, and to provide some important conclusions about alternative runoff policies. Only two of the three categories of agricultural runoff problems involve externalities, and only the spatial externality is considered here.

The Commons, Common Property, and Environmental Policy

The conceptual confusion among property, common property, open access resources, and the “tragedy of the commons” is identified and rectified. Property rights are defined and clarified. From that it is possible to understand the traditional confusion between open access resources and common property resources. It is urged that common property regimes be used in place of common property resources. This will emphasize that institutional arrangements are human creations and that natural resources can be managed as private property, as common property, or as state property. It is the property regime — an authority system — that indicates the rules of use of a variety of natural resources.

Property rights, externalities, and resource degradation: Locating the tragedy

Abstract Resource degradation in the Third World is largely driven by the demands of farm households for fuelwood and land for agriculture. Since resources are often controlled through indigenous systems of property, the tragedy of the commons has been used to explain resource degradation. As a result, private property is suggested as a solution to resource degradation. A dynamic model capable of examining household incentives for resource use under private and common property is developed. Results of the model reject the conventional wisdom that gives rise to the presumed optimality of private (individual) property in natural resources, and the correlated indictment of group management regimes.

Abdicating Responsibility: The Deceits of Fisheries Policy

Abstract The imperiled status of global fish stocks offers clear evidence of the comprehensive failure of national governments to provide coherent management to protect those stocks. The universal policy response to this failure seems to consist of nothing more imaginative than the free gifting to the commercial fishing sector of permanent endowments of income and wealth under the utopian claims associated with individual transferable quotas (ITQs). It now seems that the fishing industry is to be entrusted to become exemplary stewards, to become efficient, to maximize resource rent, to stop racing for fish, and to make society better off. These exultant promises are rendered false by the incoherent models from fisheries economics that are confused about the essential concepts of:

The Prejudices of Property Rights: On Individualism, Specificity, and Security in Property Regimes

It is a truth universally acknowledged that a nation with little wealth must be in want of land privatisation.1 This received truth — a prejudice — continues to animate the policy dialogue in a number of countries where traditional property regimes have not been shown to be failures (Bromley, 1991). In other words, given the ecological-economic nexus, common property regimes can be quite appropriate, despite various efforts to prove them ‘inefficient’ or destructive of environmental resources (Bromley, 1992). In this article we shall address a different prejudice pertaining to property rights — namely, that the transition from common property to private property represents a move towards more individual, more specific, and more secure land rights (Cohen and Weizman, 1975; Demsetz, 1967; Feder, 1987; Feder and Feeny, 1991; Feder and Noronha, 1987; Feder and Onchan, 1987; Feeny et al. 1990; North and Thomas, 1973; Platteau, 1996; Ruttan and Hayami, 1984). This is a prejudice because, to the extent that these outcomes are thought to be desirable, they are only so because of the normative system out of which they arise. In the extreme, institutions that ratify individualism at the expense of social cohesion can be questioned on grounds of sustainability.