The Evolution of Resource Property Rights.

Trebilcock, Michael J.

The Evolution of Resource Property Rights

By ANTHONY SCOTT. Oxford and New York: Oxford University Press, 2008. Pp. 497, bibliographical references, index.

This book is the culmination of much of a life's scholarship by one of Canada's most distinguished political economists, Professor Anthony Scott, of the University of British Columbia. The book is panoramic in the scope of its subject matter, exemplary in the facility with which the author moves effortlessly across the disciplinary boundaries of economics, law, and political science in explaining the emergence of rights to natural resources, and a model of scholarly erudition in the rigour of the research, the subtlety of interpretations offered of key evolutionary moments, and the lucidity and elegance of exposition.

As the author states in his introductory chapter,

Looking at the sheer volume of the historical and development literatures, one would think that scholars of property rights and institutions must also have looked in depth at the emergence of individuals' rights to natural resources, including minerals, water, forests, and fish. Yet, when I embarked on this project, it was largely because nobody seems yet to have assembled a unified body of knowledge that can familiarize the non-specialist with changes in the rights held by owners and users of natural resources.... My purpose in this book is to provide such a unified body (p. 3).

In this goal, Professor Scott succeeds spectacularly.

Apart from the introductory chapter, the book is divided into three parts. The first part deals with rights over fugacious (fluid) resources and deals with the evolution of rights over flowing water and rights over fisheries and fish. The second part deals with rights over mineral resources, with an initial focus on gold-mining and then alluvial and hard-rock mining, followed by the evolution of rights over coal, oil and gas. The final part deals with rights over wood-based resources.

Professor Scott's strategy for integrating his analysis of these very disparate natural resources is to focus on six core characteristics of property rights: exclusivity, duration, flexibility, quality of title, transferability, and divisibility, and, in the case of each class of natural resource, to seek to learn how and why the characteristics of property rights have changed in one or more of these dimensions over time. He emphasizes that he is not principally concerned with whether the changes were a good or bad thing or were more or less efficient. As Professor Scott notes in his introductory chapter, he is "not primarily interested in deriving solutions to an optimal property holding problem" (p. 6). Moreover, he rejects any evolutionary thesis that the changes he describes entail an exorable move towards perfection; rather, his research shows that while the amounts of each attribute in a standard right over some resource did increase in some periods, those over other resources, or in other periods, declined. While there is a body of recent law and economic scholarship that claims that the common law evinces a tendency towards the evolution of efficient rules over time (a thesis that is strongly contested by other scholars), the author implicitly rejects this thesis (without explicitly joining issue with this literature) in arguing that "it cannot be assumed that the regimes of property rights created by their responses were more efficient than what came before" (p. 44). Further, the author describes examples of property-right characteristic trend lines that could be said to bend back on themselves, producing cycles of increasing and decreasing levels of the given characteristics.

Having identified these six characteristics of property rights in natural resources, Professor Scott then categorizes the forces that induce change and shape property rights as demand-side forces and supply-side forces. With respect to every class of natural resource, he asks why demanders requested a change in some characteristic of the property rights in question, noting that demanders' private goals mainly fall into two categories, one purely distributional (or redistributional) and the second allocational (entailing some change in the use of the resource in question). In some cases, changes in the demand for property rights reflected exogenous changes in the value of the resources in question (for example, a dramatic increase in the demand for coal and subsequently oil and gas during and following the Industrial Revolution); in other cases, shifts in demand reflected technological innovations that facilitated new forms of utilization of given resources (e.g., hard rock or underground mining), which in turn often required scales of capital investment beyond the reach of individual miners or prospectors, presaging the emergence of large-scale corporate mining interests.

On the supply-side, Professor Scott focuses on government in the form of the Crown, the Executive, or, in later periods, the legislature, the courts, long-established custom, or the spontaneous emergence of some new regimes of informal ordering such as the gold-mining associations that emerged during the California Gold Rush in 1850, where "miners showed great originality in hammering out what amounted to nothing less than a social contract" (p. 218) for defining claims and adjudicating disputes.

Utilizing this framework of analysis, with its focus on the six core characteristics of property rights and shifts in influence among configurations of demanders or suppliers of changes to existing property rights, the author then explores the emergence of property rights regimes to each of the classes of natural resources addressed in the book, often beginning with Roman law, moving then to early and later medieval English law (much of it common law case law), which he analyses with exquisite care and subtlety (and which would put many lawyers to shame), and then moves on to more recent developments where legislative initiatives have played a more prominent role. Not only is the historical sweep of the analysis breathtaking but even more so is its comparative focus. While in every case Professor Scott's initial focus is English law, he then moves on to compare the evolution of English law with the evolution of parallel bodies of law in the United States, Canada, and Australia, with selective references to other jurisdictions.

Given the superb body of scholarship that this book represents it seems churlish to note any criticisms. I note but two. In his discussion of rights to wood-based resources and the different evolution of these rights in Canada and the U.S. (retention of Crown land and sale of harvesting rights versus sale of state land as freehold interests), he fails to note that these differences lie at the heart of the long-running softwood lumber trade dispute between the two countries. On a more general note, he nowhere explicitly discusses a current preoccupation of many development scholars--the so-called "natural resource curse" whereby developing countries more richly endowed with natural resources appear often to be poorer than developing countries that lack these resources and have evolved dysfunctional policies and institutions as a result of rent-seeking and corruption by both private- and public-sector actors. Whether an abundance of natural resources ever similarly afflicted, at any points in their history, the now-developed countries that are the focus of Professor Scott's analysis and, if so, how they escaped the natural resource curse might well have yielded important sources of illumination of an important contemporary development concern.

Such quibbles aside, no serious scholar of natural resource property rights, and for that matter no serious policy-maker contemplating reforms to existing natural resource property rights regimes, should commit the folly of treating this book as providing anything less than the essential building blocks for serious analysis. It will surely become the standard reference book in this field, at least across the common law world and probably beyond.

Michael J. Trebilcock is University Professor of Law and Economics in the Faculty of Law at the University of Toronto.