Property Rights

According to Bromley (1991: 94) “A right is the capacity to call upon the collective to stand behind one’s claimed to a benefit stream (that is to one’s property)”. It is essential for every citizen in the society to fulfill his or her responsibilities (Abdin 2008: 1), but a property right cannot be taken as unbiased agreement to manage something. By assuming rights, an individual can expect from the state to defend his interests in a particular outcome (Sjaastad and Bromley 2000: 3), and in order to avoid undesirable outcomes, the state grants some protection mechanisms of particular relevance for the assurance of these rights (Deininger and Feder 2001: 4).

Property means a belonging over which a person can claim the right of ownership (Hann 1998: 4). The author explains people’s behavior in different cultural environments with respect to the ownership of land. According to Hann (1998), property relationships explain the social relationships that exist between different people and societies (ibid: 5). Generally, the existence of property is possible when it is effectively rendered through a complete procedure of appropriation (Godelier 1986: 81). All societies’ have different property relationships in order to deal with the problems of individuals, and most of these problems are related to the sense of possession. Property rights try to solve these problems through a particular specification of rights.

Property rights can define the relation between individuals established on the basis of insufficient goods and their use. Individuals must take notice of the norms of behavior or the cost of violation when they interact with each other. Property rights are not defined as a tie between the individual and an object but can be explicated as the relationship between individuals for the use of objects, which is also called ownership, e.g., property rights for land use means the access of an individual to land with respect to other society members (Pejovich 1997: 57). The right of ownership has three main components, 1) exclusivity,⁴ 2) transferability, ⁵ 3) constitutional guarantees of ownership⁶ (ibid: 58).

4 Exclusivity of ownership: the owner has the right to decide the use of a resource, assess to resource costs and benefits of a resource. A restricted right involves some limitations imposed by law, e.g., price control or keeping the boundaries of one’s house two feet inside the property line (Pejovich 1997: 58).

5 Transferability of ownership: the owner has the right to transfer his property to others on common terms and conditions. Through this right, the owner can receive the value (whole or as per condition of the agreement) against his asset (ibid: 59).

6 Protecting the private property by rule passing by majority (ibid: 60)

Property rights are societal tools and are helpful for individuals, maintaining hopes in their dealings with other members of society. With the approval of other members of society, the owner of property rights can take actions of his own volition. He expects that the community will stop others interfering with those actions to which he has a right (Demsetz 1967: 347). In this way, property rights protect one’s action regarding one's property. The individual feels secure, if property rights are properly practiced in the society.

Property rights have been considered the most important and effective means to create, keep, and protect scarce resources (Roberts and Milgrom 1992). They are the rights of the individuals to use property, to generate income from these scarce resources (mainly land), to transfer this land between others, and to change its form and substance (De Alessi 1990: 47, Furubotn and Richter 2000). According to a report from FAO (2002: 26) these rights are called the use rights, control rights, and transfer rights. Use rights are mainly those rights through which a person can occupy, use, develop, or sometimes exploit the resources.

Because of the control rights, an individual has a power to decide on the usage or alienation of his asset for income generation. Transfer rights are supportive when the right holder wants to sell, mortgage, or lease the land. In the case of private property rights, all these rights are fully defined, earmarked, and implemented.

Property rights are social institutions defined by the sanctions applied to the individuals with respect to a particular resource. These resources may or may not be moveable.

Ownership rights mean the control of the land holder over the land in the case of his physical access to the site and his authority for all sorts of decisions of land uses. In the case of private property, different rights are involved, e.g., the right to exclude non-owners from access, the right to appropriate the stream of rents from the use of and investments in the resource, and the right to sell or otherwise transfer the resource to others. Property right institutions range from formal and informal institutions regarding the use of property. These institutions have a strong influence on decision making, economic behavior, and performance (Libecap 1989: 1) and affect the economy in two different ways: 1) by assigning ownership to the resource with regard to who will bear the cost and who benefits and 2) by allotting the decision-making authority (ibid:10). Under conditions of full private property, an asset owner is entitled to use, rent, or sell the property. In the case of a sale, a collection of property rights is then transferred from one person to another. As a consequence, the value of any private property depends,

ceteris paribus, on the bundle of property rights that can be conveyed in the transaction (Furubotn and Richter 2000).

Property rights regularized the relationships between individual with respect to things, goods, and values. An individual can exert some power over an asset to consume, to obtain income from a property, and to alienate it through these rights (Verdery 2003: 18, Barzel 1989: 2). These rights indicate different relationships such as a relation to use: exclusive ownership means sole ownership or, in other words, the power or authority related to the resource, and obligation means one’s act of binding oneself by a social, legal, or moral tie.

Verdery (2003: 172) places emphasis on values and has discussed the values related to ownership and dignity.

Operational level property rights are dealt with by following types of rights: 1) the right of access means a person has a right to enter a physically defined area and to enjoy its benefits, 2) the right to withdrawal can be explained as the right for the holder to acquire the units from the asset and to utilize the units by his own choice, 3) the right of management is related to managing the asset in the form of quality and quantity, with the right-holder being responsible for maintaining things in order and up to date, 4) the right of exclusion determines the accessibility to the asset, with only the person who has an access-right being able to access the asset, 5) the right of alienation gives to the holder the right to sell or lease or both (Ostrom and Schlager 1996: 131-32). In the most general terms, property rights are described as social codes that define who has the rights to enjoy the benefits from the use of a certain asset. The

“right” of someone means someone else has a duty to observe that right.

In the effective rights’ system, there is always an authority to defend one’s right in a particular outcome. If a person thinks that he has rights in such a specific situation, he can ask the authority about his claim. “The effective protection of his gain from this authority system is nothing other than a correlated duty for all others interested in his claim. A right is a triadic relationship that encompasses him, the object (the income or benefit stream) of interest, plus all others who have a duty to respect his right. Rights are not relationships between him and an object (or an income stream), but are rather relationships between him and others with respect to that object (or its associated income stream). Rights can exist only when there is a social mechanism that gives duties and binds individuals to those duties” (Bromley 1991: 94).

In the case of Pakistan, property rights are institutionalized as a part of the constitution.

According to the constitution of Pakistan, Article 23, a person can own or sell his property in

any part of the country. In a further explanation of this article concerning the transfer of property act 1882, the owner can distribute his property among others or can transfer his property to someone. He is fully authorized to take a decision about his property with regard to its use. In the presence of this formal institution, the system also has some informal cultural and traditional force, which sometimes is crucial in the management of the resource.