Public Choice, Property Rights, and Environmental Quality

Frank G. Müller

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DOI: 10.2190/JR6P-1WAU-UUJU-0G47

Abstract

The property rights approach to political economy is an attempt to integrate institutional economics into the marginalist methodology of neoclassical microeconomics. Since environmental quality and common property resources are applications of political economy, the property rights approach provides some new insights for the management of common property resources. Where values of competing uses of common property resources must be weighted, problems arise. Contrary to the Coasian Theorem, its value will depend on the assignment of property rights. However, where environmental objectives conflict with other economic objectives, such as full employment, property rights are no safeguard against environmental degradation, since majority rule can change existing rights at the cost of environmental quality.

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