by Carrie B. Kerekes
Cato Institute
July 06, 2011
Cato Journal
Public policy often regards pollution and other measures of poor environmental quality as public “bads” that are a result of market failures; thus government intervention through regulatory and environmental standards is argued as the necessary action. Instead, environmental quality should be regarded from a property rights perspective, in which institutions create incentives that lead to reduced levels of pollution. This article shows that where property rights can be well defined, as with land and water, increases in the security of property rights lead to improvements in environmental quality. For example, when property rights become more secure, deforestation decreases and access to safe water and sanitation facilities improves. However, when property rights cannot be well defined, such as property rights over the air, the environmental quality will erode.

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