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doi: 10.2139/ssrn.2872207
A central challenge in securing property rights is the subversion of justice through legalskill, bribery, or physical force by the strong the state or its powerful citizens against theweak. We present evidence that the less educated and poorer citizens in many countries feel theirproperty rights are least secure. We then present a model of a farmer and a mine which canpollute his farm in a jurisdiction where the mine can subvert law enforcement. We show that, inthis model, injunctions or other forms of property rules work better than compensation fordamage or liability rules. The equivalences of the Coase Theorem break down in realistic ways.The case for injunctions is even stronger when parties can invest in power. Our approach shedslight on several controversies in law and economics, but also applies to practical problems indeveloping countries, such as low demand for formality, law enforcement under uncertainproperty rights, and unresolved conflicts between environmental damage and development.
injunction, property rights, subversion, Macroeconomics and International Economics, liability
injunction, property rights, subversion, Macroeconomics and International Economics, liability
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