Legal theorists and other commentators have long established a distinction between property and possession. According to this usage adopted here, possession refers to control of a resource, but property involves legally sanctioned rights. Strikingly, prominent foundational accounts of the ‘economics of property rights’ concentrate on possession, downplaying the issue of legitimate legal rights (Alchian, 1965, 1977; Barzel, 1994, 1997, 2002; von Mises, 1981). Some authors in this genre make a distinction between ‘economic rights’ and ‘legal rights’ where the former are more to do with possession or the capacity to control. They argue that ‘economic rights’ are primary and more relevant for understanding behaviour. But it is argued here that legal factors – involving recognition of authority and perceived justice or morality – have also to be brought into the picture to understand human motivation in modern societies, even in the economic sphere. As other authors including Hernando De Soto (2000) have pointed out, the neglect of the legal infrastructure that buttresses property has deleterious implications, including a failure to understand the role of property in supporting collateralized loans for innovation and economic development.

Geoffrey Hodgson has a number of criticisms regarding the ‘economic approach to property rights’ that has been mostly championed by members of the UCLA and Washington departments of economics during the 1960s–1990s. In this short note I address these comments and point out that most are simply a matter of nomenclature. When there are disagreements they stem from Hodgson’s failure to account for positive transaction costs and this literature’s emphasis on operational explanations of organization.

This comment divides ‘property rights’ into ‘legal rights’ and ‘economic rights’ in order to distinguish between two very different concepts that are often confounded in the literature. Because of transaction costs, neither kind of rights is ever complete. These are useful in economic analysis as maximizing individuals constantly expand and shrink them. Unlike Hodgson’s, both notions of rights adopted here are positive, useful in analyzing behavior, and not normative as Hodgson (2015) claims them to be. As used by me, they do not devalue property rights as Hodgson claims.

Hodgson's (2015) critique of extra-legal ‘property rights’ – in this case, so-called ‘economic property rights’ – is right on target. This Comment contributes two further points to his critique. First, the notion of ‘economic property rights’ is based on what Gilbert Ryle (1949) referred to as a ‘category mistake’, conflating physical possession, which is a brute fact about the world, with the right or entitlement to possession, which is a social or institutional fact that cannot exist in the absence of some social contract, convention, covenant, or agreement. The very notion of a non-institutional ‘right’ is oxymoronic. Second, the fact that property is an institutional fact does not mean it must exist with the structure of a ‘state’ (as Bentham suggested). Rather, institutions like ‘property rights’ only require some community, however large or small, operating with what Searle (1995; 2005) calls collective intentionality and collective acceptance, according to shared ‘rules of recognition’ (Hart, 1997).

This is a response to the useful comments by Allen, Barzel and Cole on Hodgson (2015a) on property rights. One section deals with some misrepresentations by Allen and Barzel. For instance, contrary to one interpretation, Hodgson (2015a) did not accuse the ‘economics of property rights’ of ignoring legal institutions or of making them generally irrelevant. This response further clarifies the standard meaning of rights, showing that it is at variance with usages in the ‘economics of property rights’. The issue of moral motivation, and its relevance for legal compliance, are also elaborated. Some arguments in Hodgson (2015a) have been described by critics as mere semantics, but in response it is argued – contrary to philosophical nominalism – that changes in the meanings of words can be analytically significant, and we should treat traditional meanings more seriously, especially when dealing with other disciplines such as law. (The cryptic reference to Humpty Dumpty comes in here). Before concluding, there is also a brief discussion of different ways of interpreting transaction costs.

Standard health economics concentrates on the provision of care by medical professionals. Yet ‘care’ receives scant analysis; it is portrayed as a spillover effect or externality in the form of interdependent utility functions. In this context care can only be conceived as either acts of altruism or as social capital. Both conceptions are subject to considerable problems stemming from mainstream health economics’ reliance on a reductionist social model built around instrumental rationality and consequentialism. Subsequently, this implies a disregard for moral rules and duties and the compassionate aspects of behaviour. Care as an externality is a second-order concern relative to self-interested utility maximization, and is therefore crowded out by the parameters of the standard model. We outline an alternative relational approach to conceptualising care based on the social embeddedness of the individual that emphasises the ethical properties of care. The deontological dimension of care suggests that standard health economics is likely to undervalue the importance of care and caring in medicine.

Hackerspaces are community-operated physical places where individuals get together to build things. While the organization itself is private, the ‘space’ that is created for individuals to work has elements of a common pool resource (CPR). The previous literature finds technology to be important in effective CPR management. Through an ethnographic study of a hackerspace, we show how technology is crucial for management of the ‘space’. In addition, we highlight how technology is used in hackerspaces to satisfy three of Ostrom's design principles for stable CPR management.

The informal institutional structure embraces the social norms and moral values of a particular society and together with the formal institutional frame, they compose the social environment. Social norms and values, congealed into customary rules of behaviour, provide a stable and enduring context to economic life that acts positively or negatively on economic activity. Despite their methodological and theoretical differences, Mill and Marshall have both suggested that individual economic decisions are fully embedded in their social environment. Thus, in order to explain the economic phenomena, from simple transaction processes to long term development, they adopted a broader perspective by including the social frame inside which economic choices are made, divulging the role of custom, yet in a quite distinctive way.

Daron Acemoglu, James Robinson and others are explaining divergent economic histories with qualitative measures of institutional quality – including Acemoglu and Robinson's popular inclusive/extractive dichotomy. While quantitative studies have sort to confirm these links using econometric proxies, few empirical accounts have shown how these proxies, or indeed the institutions they seek to represent actually influenced economic growth. This study helps fill that gap by testing whether evidence in Zambia's post-colonial history supports a proposed econometric link between its institutional quality and its slow economic growth. Support for this link is found in foreign investors’ interpretation of declining institutional constraint on Zambia's President as the potential for increased policy volatility, and as such an economic inducement to delay critical investment to Zambia's capital constrained economy. These findings add weight to the institutional argument in general, as well as present one concrete example in history of a mechanism through which institutional quality affected economic growth.

This paper contributes to the literature by conducting the first empirical investigation into the determinants of prosocial behaviour in the Palestinian Territories, with a focus on the role of trust and institutions. Drawing on a unique dataset collected through the administration of a questionnaire to a representative sample of the population of the West Bank and the Gaza Strip, we have found that institutional trust is the strongest predictor of prosociality. This result suggests that, in collectivist societies with low levels of generalized trust, the lack of citizens’ confidence in the fairness and efficiency of public institutions may compromise social order. The strengthening of institutional trust may also reinforce prosocial behaviour in individualist societies, where a decline in generalized trust has been documented by empirical studies.

This paper addresses the link between the strong inflow of FDI into Russia in the 2000s and its weak institutions, using plant-level data across subnational regions. The findings imply that investors have responded positively to improved quality of institutions in certain regions, which offered a combination of wealth, skills and good infrastructure. High development levels in host regions helped to bypass some institutional shortcomings. Investors from source countries exhibiting comparable institutional environment appeared to be more immune to political conflict. Round-trip investors reacted to institutional determinants in almost the same manner as genuine investors, except for tolerance to labor market imperfections.