PROPERTY RIGHTS

Property Rights Approach

The property rights approach is a framework used to analyze and evaluate economic and
social issues by considering the allocation, protection, and enforcement of property rights.
Property rights are essential for the functioning of economies and societies, as they define
who has the legal authority to use, control, and transfer various resources and assets. Here
are some ideas related to the property rights approach:
 Natural Resource Management
 Innovation and Intellectual Property
 Urbanization and Housing Rights
 Environmental Conservation and Externalities
 Cultural Heritage Preservation
 Indigenous Rights and Traditional Knowledge
 Property Rights and Conflict Resolution
 Bundle of Rights
The concept of a bundle of rights helps to illustrate that ownership of property is not a single, all-encompassing
right, but rather a collection of distinct rights that can be separated, shared, or transferred.
Bundle of rights includes, but is not limited to, the following:

Right to Possession: The right to physically occupy and use the property.
Right to Use: The right to use the property in any lawful manner without violating zoning or other regulations.
Right to Enjoyment: The right to derive benefits from the property, such as collecting rent or receiving income from
its use.
Right to Exclude: The right to prevent others from entering or using the property without permission.
Right to Transfer: The right to sell, lease, gift, or otherwise transfer ownership of the property to another party.
Right to Mortgage or Encumber: The right to use the property as collateral for loans or other financial transactions.
Right to Control: The right to make decisions about how the property is used, developed, or maintained.
Right to Dispose: The right to decide whether to sell, destroy, or abandon the property.
These rights can be separated, shared, or restricted through legal agreements and transactions. For instance, a
landlord may grant a tenant the right to possess and use a property for a specific period, while retaining other
rights. Similarly, a property owner might grant an easement to a neighboring property owner, allowing them to use
a portion of the property for a specific purpose, such as accessing a road
 Partitioning of Property Rights
Partitioning of property rights refers to the division of the bundle of rights associated with a property among
multiple parties. This often comes into play in scenarios where multiple individuals or entities share
ownership of the same property. Partitioning can occur through various mechanisms:
Joint Tenancy: Co-owners have equal and undivided shares in the property. If one owner dies, their share
passes to the remaining owners.
Tenancy in Common: Co-owners have distinct, separate shares, and they can sell or transfer their share
without the consent of other co-owners.
Community Property: In some jurisdictions, spouses automatically share ownership of property acquired
during marriage, usually in equal shares.
Condominiums: Multiple individuals own individual units within a larger property complex, while common
areas are shared.
Timeshares: Different people own the right to use a property for a specific period each year.
Easements: A specific right (like the right to cross a property) is granted to someone who doesn't own the
property.
Partitioning property rights can become complex and may lead to disputes if not managed properly. Legal
agreements and regulations are usually in place to govern these situations and ensure that the rights of each
party are respected.
 Coase Theorem
The Coase Theorem, named after economist Ronald Coase, addresses the question of how
externalities (the side effects of economic activities on third parties) can be efficiently managed in a
market economy without government intervention. The core idea is that if property rights are well-
defined and transaction costs are low, then private parties can negotiate and come to efficient
solutions to externalities without the need for government intervention.

Coase Theorem emphasizes the role of private negotiations and property rights in resolving
externalities, while the Interest Group Theory highlights the influence of organized interest groups
on the establishment and protection of property rights through political and regulatory processes.
Both concepts offer insights into how property rights impact economic outcomes and the
functioning of markets.
 Bangladesh perspectives: Case
In Bangladesh, a significant property rights issue revolves around "khas land," which refers to
government-owned land. Over the years, there have been instances of land distribution and
disputes related to khas land. One particular case that gained attention is the Bhawal Estate case.
The Bhawal Estate was a large estate located near Dhaka, covering vast areas of land. In the early
20th century, the owner of the estate, Kumar Raja Bikrom Singh, disappeared under mysterious
circumstances. After his disappearance, legal battles ensued over the estate's ownership.
Issue: The Bhawal Estate case raised questions about the legitimacy of the claimants to the estate's
ownership. Over time, multiple individuals and families came forward asserting their rights to the
estate's land, leading to complex land disputes.
Resolution: The Bhawal Estate case went through a series of legal battles and trials, lasting for
several decades. Ultimately, in 1946, a judgment was passed by the Privy Council (the highest
appellate court at that time) in favor of the claimant, Kumar Shova Proshad, who was recognized as
the legitimate heir to the estate.
 Bhawal Estate Case
The Bhawal Estate case highlighted several important aspects of property rights in Bangladesh

Land Disputes: The case showcased the complexities and challenges that can arise in land disputes,
particularly when there are multiple claimants to the same property.
Legal Process: The case underscored the lengthy legal process involved in resolving property rights
disputes, as it took decades to reach a final judgment.
Inheritance: The case also touched on inheritance laws, as the legitimacy of the claimants'
connection to the original owner played a significant role in determining property rights.
Government Land: The case indirectly highlighted the government's role in overseeing the
distribution and ownership of khas land, which can sometimes lead to conflicts between private
individuals and the state.
The Bhawal Estate case serves as an example of how property rights issues can be intertwined with
historical, legal, and inheritance-related factors. It also emphasizes the importance of a robust legal
framework and judicial process for resolving such disputes and clarifying property ownership.
 Property Rights: Laws and Regulations
Property rights in Bangladesh are governed by various laws and regulations-
 Land Ownership
 Inheritance Laws
 Intellectual Property Rights
 Land Disputes and Evictions
 Property Development and Zoning
 Tenant Rights
 Adverse Possession
 Eminent Domain
 Theories
Utilitarianism: Jeremy Bentham and John Stuart Mill.
Labor Theory: Adam Smith, David Ricardo, and Karl Marx. Each of these
economists contributed to this theory in different ways.
Personality Theory: There are numerous personality theories proposed by
various psychologists. Some notable figures in this field include Sigmund
Freud, Carl Jung, Abraham Maslow, and Erik Erikson.
Social Planning Theory: Social planning theory doesn't have a single author,
but rather represents a field of study within urban planning and sociology. Key
contributors to this field include Jane Jacobs, Lewis Mumford, and Herbert
Simon.
 Demsetz’s theory

Demsetz's theory of property rights highlights the dynamic relationship between property rights, transaction costs, and
resource allocation. He emphasizes that property rights emerge and evolve to facilitate efficient resource use and
minimize the costs associated with exchanging and managing those resources. This theory has had a significant
influence on discussions surrounding property rights, resource management, and economic development.
The Property Right Game
 The Property Right Game
In this game, peasant A makes a decision on whether to trust peasant B
to perform an action with no harm in order to determine how to allocate
his land. If peasant A distrusts B, the exchange does not take place, thus,
the values are 0 for both peasants. When A trusts B and B honors the
trust, A will obtain a benefit a (e.g., rental) and B obtains a benefit b from
the land. When A trusts B and B exploits this trust (e.g., overuse of soil), A
will obtain the benefit −m and B obtains the benefit b + c.
 Vested Property
Vested Property Act, a terrific law which legalizes the government confiscating property from
people, deprives actual owners from their property creates controversy and criticism. It is one of
the consequences of the long-lasting communalism and disparity in Indian subcontinent.
Continuous partition of the subcontinent was the consequence of the 'Divide and Rule' policy by
British colonialism hence it's distortions caused sufferings to the individuals long time in economy
and politics. No doubt, it is the controversial creation of the socio-political instability though there
must have liabilities to the involved leaders of this subcontinent. Before the independence of
Bangladesh, it was known as the 'Enemy Property Act' and now it is known as 'Vested Property
Act, 2013'. It was the key to unlock the problems related to appropriate the lands of the Hindu
population who went to India from 1965 to 1969, an unfair and oppressive one. It corresponds
those property belongs to Hindu community possessed by other persons later. To signify the
effects and impacts on Hindu population in Bangladesh, we have to know about impacts and
effects by which this law was created first. We have to know clearly about the Hindu population
who are aggrieved today whether they were benefited or not before existing this law.
 Challenges and Policy Implications
Productivity: Inefficient land use due to unclear property rights can lead to lower agricultural productivity. This affects the overall supply of
food and raw materials, potentially leading to inflationary pressures on the economy.
Rural Poverty: Inefficient land use and limited access to well-defined property rights can contribute to rural poverty. This, in turn, affects
income distribution and can have broader social and economic implications.
Investment: The lack of secure property rights can discourage farmers from making long-term investments in land improvement and
modern farming techniques. This limits the adoption of technologies that could enhance agricultural productivity and contribute to
economic growth.
Migration: Land scarcity and unclear property rights can contribute to rural-urban migration, as individuals seek better economic
opportunities in urban areas. This migration can impact urban infrastructure, labor markets, and overall urban development.
Financial Access: Well-defined property rights are crucial for using land as collateral for obtaining credit. If property rights are uncertain or
contested, farmers might face difficulties accessing credit, which can hinder their ability to invest in their farms and improve productivity.
Policy Implications:
To address these challenges, the government might consider implementing policies that:
Land Reforms: Implement land reform initiatives that clarify property rights, reduce land fragmentation, and encourage more efficient land
use.
Legal Framework: Strengthen the legal framework for property rights enforcement to ensure that individuals and businesses have the
confidence to invest in land-related activities.
Technology Transfer: Promote technology transfer and extension services to help farmers adopt modern agricultural practices, even on
fragmented land holdings.
Financial Inclusion: Enhance financial inclusion by enabling farmers to use their secure property rights as collateral for loans, supporting
investment in their agricultural activities.