ECON1101 WEEK 11 - Common Resources and Property Rights...

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Unformatted text preview: Common Resources and Property Rights Public Goods and their Financing Frank, Jennings, and Bernanke: Ch 12 pp 334 to end and Ch 13 1 2 Common Resources Property rights Four different types of goods Government provision of public goods Optimal quantity of a public good Private provision of public goods Sources of inefficiency in the political process Taxes and crowding out 3 The problem of unwanted resources How many cows will villages send onto a common grazing area? 4 5 6 A resource from which it is difficult to exclude people and for which each unit consumed by one person means one fewer unit available for other users 7 The tendency for a common resource that is open access to be used until marginal benefit falls to zero 8 A situation where no one has the ability to restrict access or to regulate use of a resource, meaning that the resource is exploited on a first-come, first-served basis 9 One solution to the tragic overuse of common resources is turn them into private property Incentive to use the resource efficiently 10 Common property: A type of property rights regime where resources are controlled by identifiable community of users, and the rules governing use are made and enforced locally 11 State property: A type of property regime where government has sole jurisdiction over the resource and where regulatory controls are centralised 12 Refers to resources that form common heritage of mankind The atmosphere Oceans Space Antarctica High sea fisheries Why extinction a problem for whales but not for chickens? 13 The definition of public good is anchored in the notion that goods (and services) differ in terms of 2 basic properties: Rivalry Excludability 14 Rivalry: The extent to which consumption of a good or service by one person diminishes its availability to others...
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This note was uploaded on 07/28/2011 for the course ECON 1101 taught by Professor Julia during the Three '08 term at University of New South Wales.

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ECON1101 WEEK 11 - Common Resources and Property Rights...

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