Barrère, Christian --- "Judicial System and Property Rights" [2004] ELECD 103; in Colombatto, Enrico (ed), "The Elgar Companion to the Economics of Property Rights" (Edward Elgar Publishing, 2004)

Book Title: The Elgar Companion to the Economics of Property Rights

Editor(s): Colombatto, Enrico

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781840649949

Section: Chapter 6

Section Title: Judicial System and Property Rights

Author(s): Barrère, Christian

Number of pages: 25

Extract:

6 Judicial system and property rights
Christian Barrère


Introduction
Property rights (PRs) constitute a system that defines relative rights with
respect to the utilization of scarce resources, that is to say somebody's rights
in relation to the rights of anybody else. As law is inefficient without law
enforcement it cannot work without a judicial system. The judicial system
enforces PRs by monopolizing the power of constraint that obliges everyone
to accept the PR distribution and its consequences. But the judicial system
plays other roles in the application of property rights. In particular, it speci-
fies the conditions of use of property rights when there are different
interpretations and when opposite claims are advanced. Hence the judicial
system is a system of legitimate interpretation and distribution of the con-
crete effects of PRs in a social context. The judicial system has two main
effects on PRs: efficiency and distribution ­ hence, equity. This applies to the
three functions concerning the judicial system: (i) PR enforcement, (ii) PR
interpretation and (iii) PR specification.
First, we shall see that the judicial enforcement of PRs is an efficient way to
strengthen the incentives to cooperate and therefore to increase social welfare,
especially when competition becomes tighter and when opportunism under-
mines the substitutes for a judiciary such as ethics or customs. Therefore
judicial enforcement is a public and a club good; but as it allows the distribu-
tion of effective rights, powers and wealth to be modified, judicial enforcement
does not represent a ...