We examine the efficiency, distributional, and environmental consequences of assigning spatial property rights to part of a spatially-connected natural resource, a situation which we refer to as partial enclosure of the commons. The model reflects on a large class of institutions and natural resources for which complete enclosure by a sole owner may be desirable, but is often institutionally impractical. When a sole owner is granted ownership of only a fraction of the spatial domain of the resource and the remainder of the resource is competed for by an open access fringe, interesting spatial externalities arise. We obtain sharp analytical results regarding partial enclosure of the commons including: (1) While second best, it always improves welfare relative to no property rights, (2) all resource users are made better off, (3) positive rents arise in the open access area, and the resource will maintain higher abundance. Under spatial heterogeneity, we also characterize spatial regions that are ideal candidates for partial enclosure – typically, society should seek to enclose those patches with high ecological productivity and high self-retention, but whether high economic parameters promote or relegate a patch may depend on one’s objective. These results help inform a burgeoning trend around the world to partially enclose the commons.
Partial enclosure of the commons
14 January 2014