Property rights are rights to control the way in which particular resources will be used and to assign the resulting costs and benefits.

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Consider the parable of the Tragedy of the Commons, as explained in 'Principles of Economics' by Greg Mankiw:

Consider life in a small medieval town. Of the many economic activities that take place in the town, one of the most important is raising sheep. As our story begins, the sheep spend much of their time grazing on the land surrounding the town, called the Town Common. No family owns the land.

As the years pass, the population of the town grows, and so does the number of sheep grazing on the Town Common. With a growing number of sheep and a fixed amount of land, the land starts...


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In another interesting idea, Hernando de Soto in his book, 'The Mystery of Capital', argues that a lack of property rights in developing countries...

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