Property rights play an important but largely under-appreciated role in channeling local knowledge into decisions about physical resources. Property devolves decision-making authority to a dispersed pool of owners, who are likely to be aware of local conditions relevant to their resources. As a result, property owners are often in a position to make better-informed decisions about the use of the resource than other parties. The homeowner who preemptively repairs an old roof, the retailer who offers a new product for sale, and the farmer who decides to switch crops are all decision-makers who are empowered through property rights to act on local knowledge that no one else may have. This article seeks to explain the local knowledge function of property rights, beginning with how arguments from local knowledge can help justify the pervasive institution of private property. When ownership is not unduly concentrated, property rights can facilitate better-informed decision-making about resources than more centralized resource management regimes, yielding better outcomes according to a range of consequentialist criteria. The article goes on to consider how the local knowledge function of property can explain some of the fundamental features of property law. In particular, this theory helps explain owners’ agenda-setting authority, the central place of possession in property law, the principle of accession, as well as doctrines that restrict the ongoing control of past owners.
Property and Local Knowledge,
Cath. U. L. Rev.
Available at: https://scholarship.law.edu/lawreview/vol70/iss4/8