A Model of Enclosures: Coordination, Conflict, and Efficiency in the Transformation of Land Property Rights (2311.01592v3)

Abstract: Economists, historians, and social scientists have long debated how open-access areas, frontier regions, and customary landholding regimes came to be enclosed or otherwise transformed into private property. This paper analyzes decentralized enclosure processes using the theory of aggregative games, examining how population density, enclosure costs, potential productivity gains, and the broader physical, institutional, and policy environment jointly determine the property regime. Changes to any of these factors can lead to smooth or abrupt changes in equilibria that can result in inefficiently high, inefficiently low, or efficient levels of enclosure and associated technological transformation. Inefficient outcomes generally fall short of second-best. While policies to strengthen customary governance or compensate displaced stakeholders can realign incentives, addressing one market failure while neglecting others can worsen outcomes. Our analysis provides a unified framework for evaluating mechanisms emphasized in Neoclassical, Neo-institutional, and Marxian interpretations of historical enclosure processes and contemporary land formalization policies.