IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/8513.html
   My bibliography  Save this paper

Property rights and the dynamics of renewable resources in North-South trade, Chapter 1

Author

Listed:
  • Chichilnisky, Graciela

Abstract

To explain the patterns of world trade of resources, this paper combines the biological dynamics of the renewable resource and game theoretical explanations of its extraction under different property regimes, with a general equilibrium model of North South trade (Chichilnisky, 1981, 1986). The two regions produce, consume and trade two goods using two inputs, a renewable resource E and capital. To expose the importance of property rights in explaining trade, the two regions are taken as identical except for the property rights regimes on the pool from which the resource is extracted: the South has common property and the North private property. The paper formulates the Nash equilibrium of a game which explains the harvesting of the resource under different property rights regimes: more is supplied at each price under unregulated property rights than it is with private property (Lemma 1). Theorem 1 proves that the difference in property rights by itself explains trade between otherwise identical regions: the South exports the environmentally intensive product even though it has no comparative advantage and the North the capital intensive products. The North overconsumes the resource intensive products which it imports at prices which are below social costs. This occurs even though in equilibrium the prices of all goods and all factors of production are equal across the world. Resources are overextracted and the world pattern of consumption and trade of resources is Pareto inefficient. Several policies which could redress the inefficiency, particularly recent property rights policies towards biodiversity and land ownership in the Americas, are discussed in this paper.

Suggested Citation

  • Chichilnisky, Graciela, 1994. "Property rights and the dynamics of renewable resources in North-South trade, Chapter 1," MPRA Paper 8513, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8513
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/8513/1/MPRA_paper_8513.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dasgupta, P., 1990. "The Environment as Commodity.i," Research Paper 84, World Institute for Development Economics Research.
    2. Chichilnisky,Graciela & Heal,Geoffrey M., 2005. "The Evolving International Economy," Cambridge Books, Cambridge University Press, number 9780521310017, September.
    3. Chichilnisky, Graciela & Heal, Geoffrey, 1983. "Community preferences and social choice," Journal of Mathematical Economics, Elsevier, vol. 12(1), pages 33-61, September.
    4. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    5. Graciela Chichilnisky, 1990. "On The Mathematical Foundations Of Political Economy," Contributions to Political Economy, Cambridge Political Economy Society, vol. 9(1), pages 25-41.
    6. Kenneth J. Arrow & Anthony C. Fisher, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 4, pages 76-84, Palgrave Macmillan.
    7. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    8. Chichilnisky, Graciela, 1985. "International trade in resources: a general equilibrium analysis," MPRA Paper 8356, University Library of Munich, Germany.
    9. repec:bla:jecsur:v:15:y:2001:i:3:p:413-33 is not listed on IDEAS
    10. Chichilnisky, Graciela, 1981. "Terms of trade and domestic distribution : Export-led growth with abundant labour," Journal of Development Economics, Elsevier, vol. 8(2), pages 163-192, April.
    11. Maler, Karl-Goran, 1990. "International Environmental Problems," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 6(1), pages 80-108, Spring.
    12. Chichilnisky, Graciela, 1986. "A general equilibrium theory of North-South trade," MPRA Paper 8810, University Library of Munich, Germany.
    13. Dasgupta, Partha, 1990. "The Environment as a Commodity," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 6(1), pages 51-67, Spring.
    14. Partha Dasgupta, 1990. "The Environment as a Commodity," WIDER Working Paper Series wp-1990-084, World Institute for Development Economic Research (UNU-WIDER).
    15. James A. Tobey, 1990. "The Effects of Domestic Environmental Policies on Patterns of World Trade: An Empirical Test," Kyklos, Wiley Blackwell, vol. 43(2), pages 191-209, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Costantini, Valeria & Mazzanti, Massimiliano, 2012. "On the green and innovative side of trade competitiveness? The impact of environmental policies and innovation on EU exports," Research Policy, Elsevier, vol. 41(1), pages 132-153.
    2. Anders Sørensen & Tryggvi Herbertsson, 1998. "Policy Rules for Exploitation of Renewable Resources: A Macroeconomic Perspective," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 12(1), pages 53-76, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chichilnisky, Graciela, 1994. "North-South trade, property rights and the dynamics of environmental resources," MPRA Paper 8415, University Library of Munich, Germany.
    2. Massoud Karshenas, 1994. "Environment, Technology and Employment: Towards a New Definition of Sustainable Development," Development and Change, International Institute of Social Studies, vol. 25(4), pages 723-756, October.
    3. Dasgupta, Partha, 2010. "The Place of Nature in Economic Development," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4977-5046, Elsevier.
    4. Karshenas M., 1993. "Environment, employment and sustainable development," ILO Working Papers 992920663402676, International Labour Organization.
    5. repec:ilo:ilowps:292066 is not listed on IDEAS
    6. Chichilnisky, Graciela & Abraham, Ralph & Record, Ron, 1998. "North-South trade and the dynamics of the environment, Chapter 2.2," MPRA Paper 8818, University Library of Munich, Germany.
    7. Dasgupta, Partha, 2000. "Valuation and evaluation: measuring the quality of life and evaluating policy," LSE Research Online Documents on Economics 6657, London School of Economics and Political Science, LSE Library.
    8. Vaughan, William J. & Ardila, Sergio, 1993. "Economic Analysis of the Environmental Aspects of Investment Projects," IDB Publications (Working Papers) 6300, Inter-American Development Bank.
    9. Chichilnisky, Graciela, 1996. "Trade regimes and Gatt: resource intensive vs. knowledge intensive growth, Chapter 10," MPRA Paper 8813, University Library of Munich, Germany.
    10. Davies, Rob & Rattso, Jorn, 1996. "Growth, distribution and environment: Macroeconomic issues in Zimbabwe," World Development, Elsevier, vol. 24(2), pages 395-405, February.
    11. William J. Vaughan & Sergio Ardila, 1993. "Economic Analysis of the Environmental Aspects of Investment Projects," IDB Publications (Working Papers) 25438, Inter-American Development Bank.
    12. Ohl, Cornelia, 2002. "Risk aversion - a necessary condition for limiting global environmental risks?," HWWA Discussion Papers 190, Hamburg Institute of International Economics (HWWA).
    13. Matthieu Glachant, 1994. "The setting of voluntary agreements between industry and government: Bargaining and efficiency," Business Strategy and the Environment, Wiley Blackwell, vol. 3(2), pages 43-49.
    14. Chichilnisky, Graciela, 1996. "Trade regimes and GATT: resource-intensive vs. knowledge intensive growth," MPRA Paper 8493, University Library of Munich, Germany.
    15. Ohl, Cornelia, 2002. "Risk Aversion - A Necessary Condition for Limiting Global Environmental Risks?," Discussion Paper Series 26360, Hamburg Institute of International Economics.
    16. Haradhan Kumar Mohajan, 2011. "The NNP and Sustainability in Open Economy: Highlights on Recent World Economy and on Open Economy of Bangladesh," KASBIT Business Journals (KBJ), Khadim Ali Shah Bukhari Institute of Technology (KASBIT), vol. 4, pages 32-47, December.
    17. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June.
    18. repec:ksb:journl:v:4:y:2011:i:1:p:32-47 is not listed on IDEAS
    19. Asheim, Geir B., 1996. "Capital gains and net national product in open economies," Journal of Public Economics, Elsevier, vol. 59(3), pages 419-434, March.
    20. Chenai Murata & Sukhmani Mantel & Chris de Wet & Anthony R Palmer, 2019. "Lay Knowledge of Ecosystem Services in Rural Eastern Cape Province, South Africa: Implications for Intervention Program Planning," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1-29, April.
    21. Harris, M., 2000. "Some Unpleasant Natural Resource Accounting Arithmetic: The Welfare Inconsitency of," Department of Economics - Working Papers Series 765, The University of Melbourne.
    22. Chichilnisky, Graciela, 1996. "Property rights and the dynamics of North-South trade, chapter 8," MPRA Paper 8514, University Library of Munich, Germany.

    More about this item

    Keywords

    international trade; natural resources; finite resources; north-south trade; property rights; market inefficiency; policy;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:8513. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.