Transferability of Collective Property Rights: Does Trade Destroy Trust?

  • Paul Seabright
Part of the International Economic Association Series book series (IEA)


Many traditional systems of common property (such as forests, pastures and irrigation systems) have differed from modern systems of common property (such as firms) not just in the typically greater informality of the rules governing their management, but also in that it is less easy for the right to share in the duties and benefits of the common property resource to be transferred from one individual to another. The ownership of traditional systems has often been defined in terms of collective entities: a forest belongs to a given tribal group, or a pasture belongs to a particular village. The identities of the individuals who thereby qualify to exercise collective rights may change: some members of the tribe or the village may die or migrate, but it is often difficult and sometimes impossible for them simply to transfer their rights to somebody else. Not only do modern systems typically differ in this respect — for example, someone owning a share in a firm may transfer this share to a third party for a financial consideration — but it is a common ingredient of many structural policy reforms to seek to increase the ease with which such transfers are made. Whether it is the World Bank recommending the privatization of common land, or the financiers of the UK and the USA calling on countries such as Germany, France and Japan to remove some of the constraints limiting free trade in the shares of firms on their stock markets, such proposals are often viewed as facilitating the more efficient matching of owners to assets.


High Effort Collective Property Effort Decision Reputation Model Implicit Contract 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Aymé, M. (1933) La Jument Verte (The Green Mare) (Paris: Gallimard).Google Scholar
  2. Bowles, S. (1989) ‘Mandeville’s Mistake: The Moral Autonomy of the Self-Regulating Market Reconsidered’, (University of Massachusetts), mimeo.Google Scholar
  3. Bowles, S. (1991) ‘What Markets Can — and Cannot — Do’, Challenge, July/August, pp.11–14.Google Scholar
  4. Harcourt, G. (1993) ‘Markets, Madness and a Middle Way’, Second Donald Home Address, Monash University.Google Scholar
  5. Hart, O. and Moore, J. (1990) ‘Property Rights and the Nature of the Firm’, Journal of Political Economy, vol. 98, pp.1119–58.CrossRefGoogle Scholar
  6. Hirschman, A. (1970) Exit, Voice and Loyalty (Cambridge, Mass.: Harvard University Press).Google Scholar
  7. Mayer, C. (1988) ‘New Issues in Corporate Finance’, European Economic Review, vol. 32, pp.1167–89.CrossRefGoogle Scholar
  8. Putterman, L. and Skillman, G. (1992) ‘The Role of Exit Costs in the Theory of Cooperative Teams’, Journal of Comparative Economics, vol. 16, pp.596–618.CrossRefGoogle Scholar
  9. Seabright, P. (1993) ‘Managing Local Commons: Theoretical Issues in Incentive Design’, Journal of Economic Perspectives, vol. 7, no. 4, pp.113–34.CrossRefGoogle Scholar
  10. Seabright, P. (1995) ‘Is Cooperation Habit-Forming?’, in Dasgupta, P. and K.-G. Maler (eds), The Environment and Emerging Development Issues (Oxford: Clarendon Press).Google Scholar
  11. Shleifer, A. and Summers, L. (1988) ‘Breaches of Trust in Hostile Takeovers’, in Auerbach, A. (ed.), Corporate Takeovers: Cause and Consequences (Chicago: University of Chicago Press).Google Scholar
  12. Tirole, J. (1993) ‘A Theory of Collective Reputation, with Applications to the Persistence of Corruption and to Firm Quality’, Institut d’Économie Industrielle, Toulouse (mimeo).Google Scholar
  13. Williamson, O. (1985) The Economic Institutions of Capitalism (New York: The Free Press).Google Scholar
  14. Granovetter, M. (1985) ‘Economic Action and Social Structure: the Problem of Embededness’, American Journal of Sociology, vol. 91, pp.481–510.CrossRefGoogle Scholar
  15. Kandori, (1992) ‘Social Norms and Community Enforcement’, Review of Economic Studies, vol. 59, pp.63–80.CrossRefGoogle Scholar
  16. Zamagni, S. (ed.) (1995) The Economics of Altruism (London: Edward Elgar)Google Scholar

Copyright information

© International Economic Association 1997

Authors and Affiliations

  • Paul Seabright
    • 1
  1. 1.University of CambridgeUK

Personalised recommendations