Common and private property to exhaustible resources: theoretical implications for economic growth

Borissov, Kirill and Surkov, Alexander (2010): Common and private property to exhaustible resources: theoretical implications for economic growth.

Abstract

We develop two models of economic growth with exhaustible natural resources and consumers heterogeneous in time preferences. The first model assumes private ownership of natural resources. In the second model, natural resources are commonly owned and the resource extraction rate is chosen by voting. We show that if discount factors are given exogenously, the long-run rate of growth under private property is higher than or equal to that under common property. If the discount factors are formed endogenously, under some circumstances common property can result in a higher rate of growth than private property.

• Item Type: MPRA Paper
• Language: English
• Keywords: natural resources, economic growth, voting, private property, common property
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q32 - Exhaustible Resources and Economic Development; D - Microeconomics > D9 - Intertemporal Choice > D91 - Intertemporal Household Choice ; Life Cycle Models and Saving; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity

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