A property right over a good (or resource) is the right to possess that good and/or to be able to do specific things associated with that good. Typically, property rights have the following features:
- They are divisible: A property right in a good can be divided among a number of individuals, organizations, or economic actors through a mutual agreement.
- They are transferrable (or divestible): A property right in a good can be transferred from one person to another if both parties consent to it.
- They are defensible: If somebody violates a property right, then the individual or organization whose property right has been violated can seek some form of recourse.
Existence of property rights
There are different views of how and where property rights (in the abstract) exist.
|Shorthand for view of property rights||Description|
|Natural law||Property rights are either a part of a natural rights framework, or can be deduced axiomatically from natural rights (such as the right of self-ownership).|
|Social acceptance|| Property rights are defined by the social consensus, i.e., what most people believe and are willing to act upon.|
For instance, in some places, leaving your belongings on a chair establishes a short-term property right to the use of that chair. In other places, this is not the case. Social convention and formal or informal norms thus determine the nature of property rights.
|Explicit legal frameworks||In this view, property rights exist only if they are incorporated in an existing legal framework, i.e., they are based on what the laws in the books declare.|
One of the key questions for any property rights framework is: how do property rights in a good originate? For goods that are produced, the property right is assumed to originate from the producer, who may then, through a contractual obligation or by selling it, transfer the property right to others. For natural resources, the question is trickier.
The homesteading principle states that the people who first come in contact with the natural resource and mix their own labor with it acquire the initial property right to it.