Property Rights, Renewable Resources and Economic Development

Liaila S. Tajibaeva

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

This paper analyzes the role of endogenous property rights in the development of an open resource-based economy. I incorporate renewable resources and endogenous decisions on property rights into a convex growth model with the formal and informal sectors. I find that along the transition path to steady state, property rights enforcement is not constant but improves with time as well as involves intermediate property rights specification (between open access and perfect property rights). International trade and labor market are driving these endogenous changes. Property rights improve with favorable terms of trade when the economy exports resource services and stronger property rights help maintain the resource stock by deterring illegal harvest. This pushes labor away from the informal harvest sector toward greater participation in the formal sector of the economy. In turn, more labor participation in the formal sector along with capital formation increase the country's output and consumption. Overall, with an open economy and well-functioning institutions, renewable resources have a positive impact on economic growth.

Original languageEnglish (US)
Pages (from-to)23-41
Number of pages19
JournalEnvironmental and Resource Economics
Volume51
Issue number1
DOIs
StatePublished - Jan 2012

Bibliographical note

Copyright:
Copyright 2017 Elsevier B.V., All rights reserved.

Keywords

  • Economic development
  • Economic growth
  • Endogenous property rights
  • Informal sector
  • Non-extractive services
  • Renewable natural resources
  • Terms of trade

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